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UK VAR welcomes impact of Brexit

UK VAR welcomes impact of Brexit

July 13, 2016

CCS Media has seen a “rise in number of orders and average order size”, and “welcome the impact” Brexit might have “on the industry”.ccs-logo

ChannelWeb spoke to CCS Media’s Managing Director Terry Betts, who noted that the increase in orders and size of orders that the VAR (value-added reseller) has seen so far in 2016 has increased its revenue to £72 million ($95 million/€86 million), with the company on course to reach £150 million ($198 million/€179 million) for the whole year. In turn, CCS Media saw sales in the first half of the year grow by 26 percent to £72 million.

The Chesterfield-based company is partnered with HP Inc and Microsoft, with Betts adding that “the number of orders increased in line with the increase in headcount here. But the increase in average order value is probably because my consumable sales, like toner cartridges, have decreased. They are quite cheap, and my hardware sales and services have risen, which are higher value”.

He noted that consumables sales are falling “because customers are increasingly moving” to MPS, paying monthly and using services “as and when they need them, rather than buying separate consumables”, and while he pointed out “we will maximise consumables as much as possible”, he believes that the market “is going more and more to a managed contract. We are ready for the market to move to subscription. That is where I believe everything in the market will eventually go”.

Betts also “welcomed the impact Brexit could have on the industry” because on the day of the EU referendum, CCS “saw the highest revenue […] ever”, and July is set to see a 20 percent increase in revenue on last year.  The price increases Brexit has “brought on” are, he believes, positive as “generally, price increases are good for the industry as far as I’m concerned. It means we don’t have to sell as much to make the same amount.

“Deflation means we need to keep selling more and more. But if prices went up by 10 percent and the market stayed the same, we would grow by 10 percent. People forget that is how it goes. I really welcome price increases”. Finally, he noted that the “biggest challenge” for the VAR in 2016 has been “shrinking margins”, which have been “gradually slipping” due to “price competition”, as “the market is becoming quite competitive, which is putting a strain on our margins slightly.

“As competitors reduce their prices the only thing I can do is increase my services. But if everybody decreases their prices, I do have to follow the market”.

Categories : Around the Industry

Tags : Business EU UK

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