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PowerLAN chase ASX dreams

PowerLAN chase ASX dreams

PowerLAN is set to become one of the first IT resellers to have successfully evolved into a services-dominated business and list on the Australian Stock Exchange.

The company's CEO confirmed last week the company is waiting for final approval of its IPO [Initial Public Offering] as part of its aggressive push to become an international IT channel services company.

News of PowerLAN's IPO considerations follow the recent appointment of former NSW Premier Neville Wran to the company board.

Wran meets with PowerLAN on a weekly basis to provide advice on legal requirements, compliancy issues and help set strategic objectives.

However, Theo Baker, PowerLAN's CEO, remains cautious about the IPO plans.

"Until we get a sign-off on the prospectus [from the ASX] and get an underwriting agreement it could all fall apart," he said.

The move underscores what Baker believes is a bright future for resellers in services-based businesses. Resellers need to transition their business away from product, he said.

The services component of PowerLAN's business now accounts for more than 60 per cent of revenues, after moving out of the product-only business over two years ago.

"I certainly don't categorise ourselves as a reseller," Baker said.

Baker believes the company's segmentation into separate e-commerce, procurement, training, IT career, support and outtasking services is one of the reasons why it retains strong growth prospects.

"We anticipate we will be just a touch under $100 million in revenues by the end of the financial year 2000," he said.

Part of the company's growth plans also includes the creation of its online shop at www.powerlan.com.auThe company is currently directing existing customers to use the site before marketing it to potential customers.

Meanwhile, Baker offered some advice to growing number of vendors moving to direct selling.

"I think the vendors have underestimated the demand customers put on resellers," he explained.

Baker believes too many vendors still want to walk into a customer's office, sign the deal and walk away.

"I think they will be in for a rude shock when it comes to managing those relationships," he said.


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