Reseller Minx is bullish after solid financial results

VAR Minx has claimed it is defying complaints about tough market conditions from some Cisco resellers, after the firm declared its turnover would top £28m next year.

The recently appointed Cisco Gold Partner (CRN, 10 July) has completed its fourth year of trading and seen its 2006 turnover rise by 171 per cent from £4.1m last year to £11.1m.

Minx’s retained profits also rocketed 987 per cent from £46,000 in 2005, to more than £500,000 this year.

John Pepper, managing director of Minx, told CRN: “Anybody in the IT sector who talks about the market declining or too much competition needs to get their heads examined.

“The channel is full of firms that need to go out and get new customers, not sit around griping while they wait for Cisco to put something on a plate for them.”

Pepper added that there is massive scope for growth in the Cisco channel, with room potentially for another 20 Gold Cisco partners.

“We could see we were heading for an outstanding year, but the results are beyond our expectations,” he said. “Our Gold status and the fact that we have specialised in Cisco has helped.”

Pepper said Minx has now split its sales teams into an Enterprise division, for larger firms, and a Commercial division for firms with up to 2,500 users.

“We are also launching Minx Direct for the SME sector, which enables smaller businesses to go online and buy a complete unified communications solution,” he added. “This will be launched in six weeks to two months.”

Minx has also opened a new office in the City of London to run alongside its Hertfordshire headquarters.

“We are also looking to open offices in Manchester and Edinburgh. We might also open something in France,” Pepper said. “We want 10 offices in total by this time next year.”

He said despite a high degree of consolidation in the market Minx will continue to grow organically in the UK and may acquire a small French firm.

“Our headcount has risen from 39 in June to 50,” Pepper added. “I hope this will rise to 60 by Christmas.”

Bernie Dodwell, European security manager at Cisco distributor Westcon, said: “The Cisco channel is performing well. However, the problem with a lot of Cisco VARs is they are not taking advantage of Cisco’s rebate programmes.”

He added that Westcon has a focused rebate team to find out where the firm is making its margin, and Cisco VARs need to work with their distributors to claim full rebates.

“If you claim full rebates from Cisco you can get 10, 20 and even 30 per cent margins,” Dodwell added. “It sounds as though Minx is playing the system and making money.”

Keith Humphreys, managing consultant at research firm EuroLAN, said: “Cisco has set up a lot of programmes to allow partners to differentiate themselves. Minx has obviously found a niche that works.”

Humphreys said it is easier and safer for VARs to grow organically, because acquiring new customer bases is no guarantee of retaining the business.

“Expanding across the UK is a good idea, but I would think twice about setting up in France,” he added. “Too many firms have tried to set up in mainland Europe and failed.”

>> Further reading:

Cisco denies that value of Gold has diminished

Minx set to strike Gold as Cisco VAR