Harrier converts to services model

Network and storage reseller Harrier is in flux after acquiring two rivals, Zeuros and Renet, and has invested heavily in converting the company to a services model.

Network and storage reseller Harrier is in flux after acquiring two rivals, Zeuros and Renet, and has invested heavily in converting the company to a services model.

It is this transformation into an ebusiness player that has caused a drop in profitability, according to finance director Mark Rowlinson.

Harrier Group's financial results, issued last week, showed that the company had effectively doubled its turnover but ceased to be profitable in the six months before 30 June. Turnover of £2.5m had grown to £4.9m, but the company's £20,488 profit on the previous period had been turned into a loss of £174,000.

"When you convert yourself from a low-margin product sales model to a high-margin services company, that's quite disruptive," explained Rowlinson.

Staff retention is vital, he added, since the company's business model is now more labour intensive. He said the company is offering share options in an effort to solve the problems.