Services surge gives Q Associates bottom-line boost

Infrastructure and services VAR reports positive FY15 results

A large uptick in its services business helped VAR Q Associates enjoy a big bottom-line boost in its 2015 fiscal year.

Accounts filed this week with Companies House reveal that for the 12 months to the end of March 2015, the company banked an operating profit of £539,000, compared with a loss of £723,000 in the prior year. This reversal of fortunes comes in spite of a modest turnover decline, from £29.1m to £27.6m.

The return to profitability can largely be chalked up to a growing services business. The directors' report for the year flagged up an increase in sales drawn from support services and consultancy, which helped gross margins improve by almost six points to 26 per cent. Services-focused business now accounts for almost half (48.9 per cent) of Q Associates' top line. This figure has more than doubled in the past six years, having risen from 21.4 per cent since 2009.

Sales director Andy Rigby told CRN that the reseller had made a number of investments in technical, services, and sales personnel during the year. New hires reflected the company's commitment to building a services proposition around its traditional business providing enterprise-grade infrastructure hardware, he stressed.

"We have taken on salespeople from organisations and backgrounds where they have been focused on a services-based infrastructure business," he explained.

Director Andrew Griffiths added that the firm would continue to focus on bolstering its services credentials to better serve public and private sector clients that are sizeable, but perhaps not quite big enough to be of interest to the giants of the outsourcing world.

"We are in a privileged position in the market. A lot of organisations we were competing with have gone through an acquisition or have just disappeared," he said. "When you look at the £25m to £50m specialist IT providers, there are not that many left. But there are many [end users] that do not always want to hear from the big SIs, or what the vendors are doing with their latest proposition."

Q Associates, which celebrates its 30th birthday this year, is headquartered in Newbury, with offices in London, Edinburgh, and Newcastle – where it also runs a network operations centre. It employs about 70 people across the UK and counts Oracle, IBM, Cisco, and Microsoft among its core manufacturer partners. Its business is fairly evenly split between the private and public sectors, with higher education a stronghold for the firm.