10/7/2009 12:49:00 PM
Redstone Group blames O2 revenue share for profit drop
Redstone Group has blamed O2’s revenue share scheme for a decline in profit in its mobile division.
The dealer released results that showed Redstone Mobile had suffered a revenue dip of 10.5% over the past year, falling from £34.9m to £31.2m, for the year ended 31 March 2009.
Meanwhile, the Redstone Group reported ‘steady’ revenue of £197.8m compared with £200.7m during the same period last year.
In the financial statement, the company blamed the telecoms division’s negative revenue performance on O2’s revenue share scheme, as well as on the economic downturn.
It said: ‘Turnover was specifically impacted by a new revenue share proposition introduced by O2, meaning that up front payments from the network would no longer contribute to Redstone’s revenue.’
The telecoms arm of Redstone was sold to Daisy Group in August for £17m, as Daisy looked to consolidate the reseller market with a raft of acquisitions. The deal included Redstone’s mobile and fixed-line businesses.
As a result of the sale, the company has been able to pay off some of its debt with Barclays Bank and negotiate further lending, including a
£10m loan and an £8m revolving credit facility.
The board of directors has changed since the disposal of the telecoms arm of the company. Alan Coppin, who was acting as interim chairman, will step down, and will be replaced by Stephen Yapp.
Redstone will rebrand the distribution arm of its business back to its former name, Anglia Telecom Centres, in light of its purchase by Daisy Group. Anglia Telecom Centres’ rebrand took effect from 28 September.