Three months after Siltek shut its doors, Workgroup MD Doug Woolley says the rescued distribution company is out of the starting-blocks much faster than anticipated and is expecting an annual turnover of over R350 million.
Workgroup was rescued from within the Siltek group by a consortium of investors, including Siltek CEO, Dave Lello.
Together with Lello, the consortium includes hardware supplier Pinnacle Micro and engineering company IMF Group, and holds 70% of the new Workgroup. Management holds 20% and the company has held the remaining 10% for performance businesses.
Woolley says the period between Siltek closing its doors and Workgroup beginning trading was harrowing.
"If it wasn`t for the commitment of our staff, who, from day to day didn`t know if they would have a job, we could never have managed to get off the ground again," says Woolley.
The revived company has opted for an aggressive "shot-gun" marketing campaign, which Woolley says involves numerous personal visits to customers to reassure them of Workgroup`s viability.
"We have buried the old Workgroup and we are building a new company which will require a new marketing campaign, done from scratch. We will roll-out the campaign at the end of the month," says Woolley.
According to him, it wasn`t difficult to win over the Doubting Thomases in the industry, many of whom he says were understandably shell-shocked after Siltek`s sudden demise.
Woolley stresses Workgroup is moving cautiously, making sure the company has enough capital and is not concentrating on growing revenue at the expense of all else.
"We need to shore up a bit. We are looking at some agents with a few other products to come in next year, but we need to settle the company down. We will end the first year with a profit and we need to keep in mind that you can`t grow a company at the expense of your cash reserves."
Workgroup has already re-signed 85% to 90% of its customer base and has 10 vendors in operation.
Woolley says the business is soundly underwritten and now has in excess of R130 million insurance credit cover available to the channel.
Commenting on the state of the local distribution industry as a whole, Woolley says things are definitely starting to pick up.
"We are seeing single deals the size we used to see around Y2K days, but it is taking longer to close them. The sales cycles have become longer," he says.
Woolley says business is no longer being duped into buying technology it doesn`t need and is making more informed decisions.
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