Lanway refocuses for profit growth

VAR reaps the rewards for business shift towards services

VAR Lanway is projecting to double profitability this year after completing an 18-month overhaul of the business.

Going into last year the Burnley-based firm was primarily focused on selling systems and AV kit into the education space. Since then the business has made a push towards selling higher-end infrastructure technology and services into the SMB arena.

Lanway has also split itself into three new business units, with Ian Morris leading the professional services division. Neil Farnworth heads the managed services unit, and Phil Skelton is in charge of an infrastructure solutions team. Andrew Henderson, commercial director for Lanway, has helmed the transformation of the firm.

"Until 18 months ago we did the vanity thing of increasing the top line and the growth was built on selling tin; we were concerned about the shape of the business," he said. "We have changed sales team structures, commission plans and we had to divisionalise the business and change the products we were selling. We have completed the majority of changes and are starting to see green shoots."

In January 2010 the firm's pipeline stood at £1.2m, said Henderson. A year and a half later this figure had risen to almost £6m.

As part of the business overhaul Lanway has also set up two new trading arms: MendIT and RecycleIT. The former offers free break-fix services on hardware and systems under warranty, while the latter specialises in WEEE disposal, recycling and data destruction.

Lanway has also reaped the rewards with its vendor partners, becoming one of only 10 top-level Dell Premier partners. The VAR has also attained Authorised Professional Services Partner status with NetApp and bagged two Microsoft Gold competencies.

Lanway's FY11 sales were £13.1m, and Henderson told ChannelWeb the VAR is projecting to post single-digit sales growth in FY12, but is forecasting for hefty increases in gross profit and margins, and expects net profit to double year on year.