Smart Office

Menu

Glenn Freeman

Network Appliance Results Disappointing

by

Revenues slumped 14 percent for Network Appliance in the first fiscal quarter 2008 relative to the April quarter, despite increasing 11 percent to $621.3 million from the same time last year.

Earnings per share for the US-based network storage provider were US$0.09, compared with US$0.14 in the same quarter 12 months ago.

The company’s operating expenses for sales and marketing, research and development, and administrative functions were all up for the quarter to end of July relative to April.

One of the most notable cost jumps was apparent in sales and marketing, which climbed from US$195 million to over US$244 million.

R&D was up to US$106 million from US$88 million in April, and administrative was up $9 million to $41.4 million.

Income from operations for the quarter was down to $24.5 million from $56.5 million in April.

“We are clearly disappointed with our revenue growth this quarter, yet confident about our underlying business strength and continued health,” said Dan Warmenhoven, Chief Executive Officer.

“Our bookings growth and cash flow are both very encouraging, and we are optimistic about getting back on track for higher growth in revenue and profits going forward.”

Not Just Flashy Gadgets

by

A punchy ‘how to sell’ business model and intimate understanding of your customer base are now just as important to retailers of CE goods as the products themselves, according to an IBM Institute for Business Value study.

Not business as usual: Changing channels in consumer electronics, found that with strong revenue, tightening margins and increasingly overlapping markets, CE manufacturers now more than ever need to know who their consumer is.

According to authors of the report, Christian Seider, Senior Managing Consultant, IBM Institute for Business Value and Sean Lafferty, IBM’s Global Leader for Growth and Innovation: “We believe that CE manufacturers need to quickly learn more about their end  consumers, and rethink their channel strategy mix to best reach their target CE customers, all without alienating existing retail channel relationships”.

They found CE manufacturers need to take specific actions to deal with the changing sales landscape today.
Among the tactics identified were leveraging new sales channels and managing channel conflicts, tightening collaboration with retail partners  and dealing with competition from retailers.

Other important approaches in the new market the report discusses are achieving a globally integrated business, aligning brand and channel strategy and understanding customer wants and needs to deliver effective solutions.

It said while there is no “one-size-fits-all” approach when determining the right actions, to avoid costly and difficult to correct mistakes, a detailed channel strategy for products is vital – one that identifies each channel partner, along with ways to manage them.

Being able to answer the following questins for each consumer product  and solution is critical:

What is the geographical market size for each of your solutions?
What are your detailed sales expectations by customer segment and product?
How much control does each channel partner exert over each sales channel?
How much power does the manufacturer have in each channel?
What impact does competition have on each sales channel?

Once these questions can be answered, the channel strategy can then be developed around them.

A full copy of the report can be obtained from http://www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/a1026329

New Vehicle Choice For Tradies

by

Another vehicle manufacturer is now selling to the Australian market, with Indian company Manindra launching its Scorpio Pik-Up aimed mainly at commercial users like tradesmen, farmers and also for recreational drivers.
Available in single or dual cab for Australian buyers, the Pik-Up is now in a number of dealerships owned by Manindra’s global parter TMI Pacific, an arm of Sydney’s Tynan Motor Group.

The Pik-Up has a 2.5l intercooled turbo diesel engine which meets local emission standards and produces 79kW of power and 247Nm of torque
.
Chairman of TMI Pacific and the Tynan Motor Group of companies, Michael Tynan said: “As per our initial plans, we have secured 10 dealers for the Mahindra Pik-Up in NSW, and anticipate a complete national roll out with a network of 50 dealers by the middle of next year.

TMI Pacific, which operates from its new head office in Sutherland, will be dedicated to servicing the Australian market with after-market services, spare parts distribution and technical training of specialists.

According to Tynan, thorough market testing in tough and rugged conditions has ensured the vehicle will deliver on the expectations of the Australian driver.  He expects it will strongly appeal to rural consumers and tradesmen, and also believes its pricing, large tray and cabin will endear it to sportspeople and families.

“On that basis we have no doubt that we’ll be able to fulfil our initial projection of 600 units sold in the first year,” Tynan said.

The Mahindra Pik-Up is the first Indian vehicle in its segment to be unveiled in a global market.

 

Design & Features
The Mahindra Pik-Up is available with either two or four wheel drive, both in single and dual cab versions, and is the result of extensive research and development to provide a vehicle for Australian conditions.

Standard features include limited slip differentials on both two and four wheel drive models, air-conditioning, four-wheel drive electrically engaged and automatic hub locks. Also standard are power steering, power windows, remote central locking and standard sound system with full CD / MP3 player and radio, USB port and an SD card port that allows one to listen to music from a pen-drive or CD cards.

For security purposes, the Mahindra Pik-Up is fitted with an alarm and immobiliser, and offers keyless entry as standard equipment.

Performance
All four Mahindra Pik-Up models have the inter-cooled common rail turbo-charged diesel engine, designed in collaboration with Austrian power train and engine design specialist AVL.

The diesel engine offers low running costs, with fuel consumption around 9.9l per 100kms for all models.

It has ventilated disc brakes in the front, drums in the rear. It has independent front torsion bar suspension and an anti-roll bar. Rear suspension is progressive rate leaf springs and hydraulic shock absorbers.

All models make have a five-speed manual gearbox. Off-road driving is considerably enhanced by the 210 mm ground clearance and electronics that allow you to swap to the 4 x 4 mode with a turn of a switch whilst moving.

RRP
Single Cab 4 x 2 $ 23,990
Double Cab 4 x 2 $ 25,990
Single Cab 4 x 4 $ 26,990
Double Cab 4 x 4 $ 29,990

See: www.tmipacific.com.au  

Cellnet Share Sales Spike

by

Sales of Cellnet shares have accelerated significantly in recent days, closely following its reported $1.6 million loss and the departure of Sony, Apple and Kyocera as vendor partners.

Despite having sold only 200,000 units last week, on
Monday this week alone investors in the large Queensland-based IT distribution
business sold off 413,000 units of Cellnet stock.

From a price of $1.20 in February this year, its
shares have fallen to 80 cents recently and have hovered around the 80 and 90
cent mark since June 2007.

Speaking to Australian Reseller News in June, Cellnet
Chief Executive Mark Bloomer attributed the price falls to two main factors.

He estimated Telstra’s appointment of Brightstar as
its sole handset distributor had cost Cellnet around $40 million in revenues,
and that the Mercury Interactive demerger had wiped around 35 cents off
Cellnet’s share price.

“It’s
been hampered over the last two years by significant stock write-downs and
ridiculous amounts of management change,” he told ARN, while emphasising his
belief that there was no need to panic.

“We need to
get back to basics so the business can climb back within a controlled
environment. Everybody has to step up and perform but I’m confident they’ll do
that.”

Qantas To Divide And Conquer

by

Qantas has signalled it will shake up its business structure in the coming year to unlock greater value from its lucrative frequent flyer, freight, fleet and holiday divisions. It announced this while reporting record net profits of $720 million for the year to 30 June 2007.
Qantas Chief Executive Geoff Dixon said that unless market conditions deteriorated, he expected to add another 30 percent to this figure by end of 30 June 2008.

One approach it would consider in achieving this continued profitability is to embark upon a program of restructuring and spinning off of individual business units.

“We believe we can unlock further value form our individual businesses and work is underway across the company.
“We are looking at potential new ownership structures and strategic acquisitions. We expect to make announcements during the current financial year on the future direction of these businesses,” he said.

This includes changes across its Qantas loyalty program, a plan to separate its freight and logisitics operations and a different model for its fleet of aircraft.

Qantas said its review of the Frequent Flyer program was aimed at broadening program partners, offering ‘any seat’ redemption and adding a Jetstar loyalty program.

Dixon said other key areas it would be focusing on in the next 12 months were the addition of new international- and domestic-route aircraft to Jetstar’s fleet, which will also extend its flights into Asia through its stake in Jetstar Asia and Pacific Airlines.

Qantas will also be investing in further routes in the increasingly popular destinations of China and India. Locally, it will be adding two new aircraft to its QantasLink regional service in January 2008.

According to Dixon, the airline’s record 2006/07 growth was driven largely by the airline’s two brand strategy. Its spin-off budget domestic carrier Jetstar enabled it to generate $112 million in profit over the last year, from routes which either lost money or realised only small profits prior to Jetstar’s inception in 2004.

Fifteen percent of Qantas’ marginal domestic and trans-Tasman flights have now been transferred to the Jetstar airline.

“The two-brand strategy has also enabled us to successfully defend our position in the Australian domestic market, where we currently hold a market share of 67.1 percent,” Dixon said.

He pointed to strong economic conditions globally and locally as also having a positive impact on demand from business and leisure markets.

Threats to the business included skyrocketing fuel costs, with prices jumping over $500 million in the last year to drive Qantas’ fuel costs to $3.3 billion.

Competitive challenges it identified came from Tiger Airways, Air Asia X and Virgin Blue, along with the proliferation of airlines from the Middle East.

Qantas To Spin Off Frequent Flyer

by

In a bid to further boost shareholder returns, Qantas will list its frequent flyer arm on the Australian Securities Exchange in a joint venture with Air Canada. How this will impact the service delivered to its 5 million plus customers is not yet clear.

Qantas Airways is planning to spin off its $3 billion frequent flyer business in a listing on the Australian Securities Exchange.
The Australian reported the carrier intends to list its lucrative frequent flyer arm in a joint venture arrangement with Air Canada’s frequent flyer business Aeroplan.

Air Canada embarked on a similar restructuring process in 2002 when it listed Aeroplan on the Toronto Stock Exchange, doubling its initial C$2 billion market capitalisation since then.

Qantas is hoping for a similarly successful result from its emulation of Air Canada’s strategy. UBS has estimated this portion of Qantas currently generates around $175 million in pre-tax profit, and suggests the frequent flyer business listing cdould boost this to as much as $3.5 billion. The change will also extend across the Qantas-owned budget airline Jetstar.

Changes are also expected to be made to its fleet, with a number of opportunities identified in using depreciation, leasing and refinancing of old aircraft to better leverage its estimated $15 billion of aircraft assets. It currently has 217 aircraft in service, with 154 on the Qantas balance sheet.

Qantas was unable to provide further details on the changes or the impact it would have on its frequent flyer customers. Further details of should be announced on Thursday when it  hands down its annual pre-tax profit figures, anticipated to hit a record $1 billion.

SMB To Benefit From Industrial Peace

by

The productivity gains of commercial building projects relative to residential projects have sky-rocketed since the Coalition Government formed the Australian Building and Construction Commission (ABCC) in 2005 to crack down on militant unionism, according to a report commissioned by the body.The productivity gains of commercial building projects relative to residential projects have sky-rocketed since the Coalition Government formed the Australian Building and Construction Commission (ABCC) in 2005 to crack down on militant unionism, according to a report commissioned by the body.

From its modelling of figures from the Economic Analysis of Building and Construction Industry Productivity report, the ABCC also claims the new ‘union-lite’ environment within the building and construction industry has delivered a $15 billion boost to the national economy.

According to the Econtech study, which collated data from quantity surveyor analysis, the Australian Bureau of Statistics, the Productivity Commission and case studies of selected projects, from 1994 to 2003 costs were on average 10.7 per cent higher in commercial building than in domestic residential building, with this cost gap falling to 1.7 per cent in 2007.

The study found national gross domestic product is 1.5 per cent higher than it otherwise would be and the consumer pricing index is 1.2 per cent lower, leading to a gain in real consumption of 0.8 per cent, lower living costs lead and higher living standards.

It also found gains in labour productivity across the same periods, 1994 to 2003 relative to 2007, were around 9.4 per cent, and construction labour productivity figures for 2006 outperformed historical performance predictions by 9.5 per cent.

The ABCC was formed under the Building and Construction Industry Improvement Act 2005, which was passed in direct response to the Cole Royal Commission into the building industry.

According to companies surveyed in the case studies, the main impacts of the ABCC and associated workplace relations reforms are significant

reductions in days lost due to industrial action, less abuse of occupational health and safety issues for industrial purposes, proper management of

inclement weather procedures, improvement of rostering arrangements increasing the number of working days per annum and cost savings stemming

from the prohibition on pattern bargaining.

News Marketing Boss Goes To M.Net

by

The former News Limited marketing director, Scott Johnson, will head up M.Net’s local push into the mobile advertising and content service provider space

Scott Johnson, former News Ltd marketing director, has joined mobile services company M.Net to drive the company’s launch of new mobile marketing products into the fast growing mobile ad sector.

With the advanced mobile marketing services space set to reach $250-300 million in Australia alone by 2010, M.Net is set to ramp up its delivery of telco systems integration, content and market research.

M.Net provides services to the Yahoo!7 group, including Seven Network and Pacific Publications, Austereo, and Telstra. This includes SMS competitions and advertising promotions for programmes such as Seven’s Dancing with the Stars and It Takes Two, as well as providing infrastructure, content and market research for Telstra’s Caller Tones ringback service.

As News marketing director, Johnson was closely involved with news.com.au, FoxSports, Carsguide, and Careerone, also launching the News Digital Media and Truelocal brands. 

Prior to this, he held a variety of senior marketing management roles with Singtel Optus, launching key products in the TV, broadband content and corporate divisions.

Record Profits For Aussie Retailers

by

Australian retail heavyweights Harvey Norman and David Jones have announced record revenue figures of $5.34 billion and $36.5 million respectively to 30 June and 28 July 2007.Sales of flat screen televisions and notebook computers have been a major contributor this year, with research firm GFK reporting notebook sales now account for 40 per cent of all PC sales.

It also said that in the first six months of 2007, flat screen TV sales grew 58 per cent and expect this to top 100 per cent by Christmas.

Directors of Harvey Norman Holdings announced sales from its franchised stores, commercial divisions and other outlets in Australia, New Zealand, Slovenia and Ireland were up 16.5 per cent on the corresponding period last year, with like-for-like sales also up 8.6 per cent.

Over the quarter April to June 2007, profits increased 15.4 per cent on the corresponding period last year, with like-for-like sales up 9.5 per cent compared with the same time last year.

David Jones increased its profit after tax (PAT) guidance for the second half of the year (ending 28 July) to $36.5 million, up between 37 per cent and 42 per cent on the same time last year.

Over the last quarter, its like-for-like sales increased 10 per cent on the previous quarter, and it anticipated sales for the fourth quarter (ending 28 July) would climb 8 per cent on a like-for-like basis and 11 per cent on a total sales basis.

Harvey Norman, controlled by billionaire Gerry Harvey, is adding outlets to its 238-store network to tap rising demand for electronics equipment and computers, while also taking advantage of last year’s collapse of rival NSW-based electronics retailer Retravision.

Sales rose to A$1.36 billion in the three months ended June 30 from A$1.17 billion a year earlier, the retailer said in a statement today. Sales from stores open at least a year rose 9.5 percent.

“We believe Harvey Norman has continued to increase its market share over the period, particularly from smaller and independent operators,” said James Casey, an analyst at ABN Amro Holdings.
 
“If we are to have a shortage in flat panel displays we could see a slight slow down. Having said this, we are very bullish on retail at the moment and believe that the growth will last until Xmas.”

Harvey Norman opened 23 new Australian stores during the year and closed four. It also added four more outlets to its New Zealand operations, two in Ireland and one in Slovenia.

David Jones, Australia’s second-largest department store chain, today said in a statement that net income at the Sydney-based retailer may rise 42 percent in the six months ending July 28, up as much as 13.5 per cent on a previous forecast.

Unemployment levels close to 33-year lows and strong consumer confidence is fuelling demand for David Jones’ designer fashion brands and Harvey Norman’s flat-panel televisions, while the rising domestic currency boosts profit margins.
 The Australian dollar has gained 17 percent the last 12 months to reach an 18- year high, lowering prices paid for imported goods.

“Trading conditions have been buoyant,” said Grant Saligari, an analyst at Commonwealth Securities Ltd. in Sydney. “The currency is moving in the right direction, costs are pretty well under control, inflation is moderating and with no wage pressures it really is a good time for them.”

David Jones’ share price rose 11 cents to A$5.63 at 1:19 p.m. in Sydney, extending this year’s gain to 35 percent. Harvey Norman shares fell 8 cents to A$5.41, paring this year’s advance to 42 percent.
 
It expects its second-half profit would be between A$36.5 million ($32 million) and A$37.8 million. Annual earnings will rise as much as 34 percent to A$108.9 million.

Designer Brands

Chief executive officer Mark McInnes is luring affluent customers to his 35-store chain with more designer brands as larger rival Myer Pty increases its range of cheaper labels.

David Jones, which opened its first new store in six years in May, said fourth-quarter sales rose 11 percent with revenue from outlets open at least a year gaining 8 percent.
 
“We have a strong management team and a proven business model,” McInnes said in the statement. “As such, we are well positioned to continue to deliver profit after tax and dividend growth for shareholders throughout the economic cycle.”

He said it is focusing on the most profitable stores, adding the former Myer site at Burwood in Sydney’s western suburbs and quitting two locations elsewhere in the city after failing to agree with landlords on new leases.
 
Myer, which was bought by TPG Inc. from Coles Group Ltd. last year for A$1.4 billion, is stocking cheaper clothing brands exclusive to its 62 outlets to boost earnings.
 
David Jones is the best performing retailer in the benchmark S&P/ASX 200 index since McInnes took the job in February 2003 with a three-fold gain.