Another Head Rolls As Cellnet Purge Continues
The Age
Wednesday April 16, 2003
Mobile phone accessories distributor Cellnet has been rocked by its second management shake-up in five months after its chief operating officer, Santo Pappalardo, was sacked following a disagreement with the board and senior management.
News of the departure of Mr Pappalardo, who was also a director, sank Cellnet shares by nearly 15 per cent, with the company already under pressure from dwindling sales in its mobile division and the resignation of its managing director and chairman in November.
Cellnet shares closed down 11 at 60 yesterday. During the telecoms boom in 2000-01 the stock traded as high as $3.64.
Recently appointed Cellnet managing director Stephen Harrison said last night that Mr Pappalardo was sacked because of a difference of opinion over the future of the company.
``There was just a decision by the board and management that he (Mr Pappalardo) wasn't a good fit; it wasn't working out," he said.
Mr Harrison declined to go into details about the rift but said there was a ``butting of heads" between himself and Mr Pappalardo.
A termination payment had been agreed and Mr Pappalardo would not be taking any court action over the dismissal, Mr Harrison said.
He also denied earlier media reports that Mr Pappalardo's sister Maria had resigned in sympathy and that other staff would follow him out the door.
Mr Pappalardo was unavailable for comment last night.
He is the latest victim of the Cellnet purge, with the businessman only joining the board as an executive director and chief operating officer five months ago.
He was elevated to the board after Cellnet managing director Mel Brookman along with chairman Brian Davis announced their own resignations.
Mr Pappalardo ran Cellnet's IT Wholesale division and joined the company after he sold the business to Cellnet in 2000.
IT Wholesale lifted its sales by 27 per cent to $58.7 million in the first half of 2002-03, making it one of the best-performing parts of the company.
The division, however, could not counterbalance the poor results of Cellnet's mobile phone and technology operations.
Late last year Cellnet told investors at its annual meeting that the downturn in the mobile phone industry had slashed sales by 20 per cent in the four months to October 31.
Cellnet later posted a disappointing net profit of $2.2 million for the six months to December 31, down from $5.1 million previously. Revenue fell more than 18 per cent to $154.4 million.
© 2003 The Age
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