The Cellnet Group Limited (ASX: CLT) share price is surging higher today following the release of a strong trading update.
At one point, shares in the lifestyle technology distributor were up at 13 cents, representing a massive gain of 202%. However, investors quickly sold off their holdings for a profit, sending the Cellnet share price back to 7.8 cents, up 81%.
As a matter of perspective, the All Ordinaires Index (ASX: XAO) is down 0.36% to 6,595.4 points.
What does Cellnet do?
Cellnet sources products and distributes popular brands of lifestyle tech products to retail and businesses in Australia and New Zealand. The company specialises in mobile phones, tablets and notebooks, and hybrid accessories.
Cellnet is also involved in services to the mobile telecommunications and retail industries.
What were the drivers of Cellnet’s results?
In the month of October, Cellnet reported robust trading conditions. Revenue increased to $12.6 million, up 18% year-on-year. This was underpinned by the surge in sales of iPhone accessories, following Apple’s announcement of four new flagship iPhone 12 models.
Net profit before tax came to $1.05 million, which was up $1.02 million over the corresponding period. Year-to-date net profit before tax is standing at $1.6 million thus far, which equates to over a 400% gain from this time last year.
Gaming was flagged as a continued performer, with PlayStation 5 and Xbox bringing new consoles to market. Cellnet revealed it is seeing positive earnings in October as a result.
In addition, recent brand acquisitions and cost management control have been significant contributors to the company’s financial performance.
What did management say?
Commenting on the achievement, Cellnet chief executive, Mr Dave Clark, said:
Our October result is a real testament to the dedication and hard work that the team has put in to make this iPhone launch our most successful yet. Our revenue and profit for October surpassed all expectations, delivering one of the best monthly results Cellnet has ever produced.
Cellnet is well placed as we move into the high velocity Christmas trading period.
About the Cellnet share price
The Cellnet share price was mostly stagnant from May onwards, unable to break the 5-cent barrier. However, today’s trading update has witnessed the company’s shares reach highs not seen since April.
The Cellnet share price hit a 52-week high of 9.6 cents per share on 22 January 2020.