Channel luvvie Martin Hellawell set to check out of Softcat. Sort of
IPO? Ticked. 1,079% growth in 11 years? Ticked. Lost the tightness? Nah
In a note to the London Stock Exchange, Softcat confirmed Hellawell had "decided to step down" and will take over as non-exec chairman.
"It is a great pleasure for me to have led Softcat for the past 11 years," said Hellawell in a customary leaving statement.
"It has been an intense period," he added. "It is now the right time to step down and for the board to appoint a new leader to the business, one with fresh energy and approaches to capitalise on the fantastic opportunities ahead."
The non-exec chairman acts independently from a company, receiving proposals from the CEO and presenting them to the board. The appointment generally flies in the face of corporate governance rules that suggest the chief exec should not become chairman. Hellawell, though, has the backing of the majority shareholder and Softcat founder Peter Kelly.
Hellawell has run the Marlow-based reseller since December 2005 when it turned over £57m in sales and made £819k in net profit. He leaves the company as a public entity – it floated in November 2015 – that hit £672.3m in revenues in fiscal 2016 ended 31 July, making a bottom line of £33.15m.
His secret, Hellawell told us previously, was simply hiring more and more salespeople – including a conveyor belt of newbies joining via the graduate training scheme – and offering good customer service.
Softcat also took advantage of some missteps in the market by Dixons and BT's reseller businesses to tap into demand for tech from mid-sized organisations that fell below the radar of the big tech vendors.
Hellawell was always unashamed that Softcat is an IT reseller, and the resale business continued to report strong double-digit growth at the halfway stage of fiscal 2017 (December).
The firm revealed today in a Q3 trading update that sales were in line with management expectations, with customer demand holding up and costs contained. Hellawell said there was "no evidence" of a "change to market dynamics" from the start of the Brexit process or snap general election.
The move to tech services – cloud and managed – presents a hurdle to the business and one that the new Martin Hellawell will need to leap as margins in tech reselling continue to erode and more customers consume compute differently.
Channel veteran Stuart Fenton, the former EMEA chief at Softcat rival Insight who now runs Microsoft Dynamics integrator Quantiq, described Hellawell as an "industry giant".
"[He took] a rather average firm and built a spectacular business through a focused model. He embraced being a mere reseller when the market, the media, and the vendors felt reselling was a dirty word."
Hellawell started in tech sales at Computacenter in 1989, moving on to SCC as Europe ops director and then grabbing the wheel at Softcat.
Mike Norris, Computacenter CEO, said the change at the top of Softcat was "fascinating" because shareholders may see Hellawell's new appointment as a "safety net" – that someone with experience remains in the background – but equally it means the business is not having a clean break.
"The replacement of Hellawell as CEO is a more significant event than the IPO itself," he told us. ®