The Cellnet (ASX:CLT) share price has rocketed up 21% today. Here’s why.

The Cellnet (ASX: CLT) share price has rocketed up 20.97% today after the company released a positive trading update for November.

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The Cellnet Group Limited (ASX: CLT) share price is soaring today after the company released a positive trading update for November. During morning trade, the Cellnet share price reached an intra-day high of 8.5 cents. However, its shares have pulled back to 7.5 cents at the time of writing, up 20.9%.

Quick take on Cellnet

Formed in 1992, Cellnet sources and distributes lifestyle tech products to retail, business and online channels across Australia and New Zealand. The company specialises in mobile phones, AV and IT equipment, audio, gaming accessories and software.

Cellnet is also involved in services to the mobile telecommunications and retail industries.

What’s driving the Cellnet share price higher?

The Cellnet share price is marching higher today after the company advised it was continuing to see strong momentum in the month of November.

Cellnet said that revenue for last month saw a 27% year-on-year increase to $14.78 million. This was underpinned by robust retail sales that included the iPhone 12 launch and console gaming accessories.

Following an uplift in revenue, net profit before tax rose to $1.19 million, reflecting a 174% year-on-year surge. During the July to October period, the company reported net profit before tax of $1.6 million.

For the 11 months so far, favourable trading conditions have led Cellnet to a net profit before tax of $2.79 million. This compares to the $2.04 million achieved on the same period last year.

Management commentary

Cellnet chief executive Dave Clark welcomed the strong recent performance, saying:

We continue to be positive about the current financial year, with the business performing very well across all categories and strong demand being experienced in the lead-up to Christmas.

About the Cellnet share price

While the company appears to be making tailwinds, the Cellnet share price has dropped heavily over the past year. Reaching 17.5 cents last December, the current share price represents a decline of almost 60%.

While COVID-19 significantly impacted the retail industry in 2020, Cellnet is beginning to see an uptick on sales post-pandemic.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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