Sentryst collapse blamed on margin pressure

Ten-year old specialist security distributor enters voluntary liquidation after losing the battle against declining margins

Distribution has taken another hit with the demise of established niche security distributor Sentryst.

The Wokingham-based company, which partnered with vendors such as St Bernard Software, Clavister, Attachmate and Cibecs, took the decision to enter liquidation last week after seeking advice from advisory company Channelmoney.

Speaking to CRN, Alan Reid, managing director of Sentryst, said: “The main reasons we have gone into liquidation were down to several challenges – in particular margin pressure being reduced on maintenance contracts and the fact that broadliners are getting more involved in the security market, which pushes margins down further.”

Reid added that as a smaller distributor it was too expensive to offer credit insurance facilities to its 140-strong VAR network.

“Unlike the Bell Micros or Computer 2000s, we could not afford the insurance, which meant we took more risks on smaller resellers, creating a larger ripple if anything happened.”

Nitin Joshi, founder of Channelmoney said the aim is to dispose of parts of the firm, such as the goodwill.

“We have had a couple of enquiries already and there are still some debts to be collected that should hopefully give a dividend back to the creditors. It is a great pity, Sentryst had a good reputation and traded reputably. Directors of distressed businesses should learn from this – take early, decisive steps to lessen the debt burden on suppliers.”

Ian Kilpatrick, chairman of rival distributor Wick Hill Group, said Sentryst’s demise was not an omen of bad things to come for the general security market.

“Sentryst was a very respected company and was strong in connectivity, but I think the changes in that market may have impacted it. This is a reflection on that particular market, but not on the security market as a whole,” he said.