Airsys tunes in to future challenges

Airsys: No 165

 

Airsys celebrates its 25th anniversary this year and has reached what commercial director Leigh Hope (pictured) describes as a pivotal point in its history. Tim Wickham finds out how the company is ready for the future.

Airsys distributes two-way radio manufacturers’ products to a network of resellers in the UK and Ireland. It is Motorola’s largest distributor in the UK, and sells the products of most leading manufacturers, including JVC Kenwood and 3M. The company’s turnover for the year to June 30, 2017 was £25 million, up from £22.2m in the same period the previous year.

The Southampton-based company was set up in 1992 by former Motorola executive Tom Quigley, who saw an opportunity to start his own business in a sector he knew well. He remains company chairman but no longer plays a day-to-day role in the business.

The technology behind two-way radios is relatively simple and well established. Technical developments add greater functionality to the handsets, such as ‘man down’ alerts for lone workers, and GPS to tell you exactly where users are. Walkie-talkies are relied on everywhere from sports and entertainment events to sites where security or health and safety need to be monitored. They are certainly popular in the UK – it’s the world’s fourth largest market for two-way radio, although Hope describes it as something of a niche sector.

Adding value in customer relationships

An accountant by training, Hope preferred to experience life ‘on the other side’ in business and moved from an accountancy firm to a manufacturing company. He joined Airsys in 2015. “I like being responsible for finding solutions to problems and being commercially responsible for my decisions,” he said.

Hope emphasised the importance to Airsys of being a ‘value added distributor’. To achieve that extra level of customer support, the company invests in areas like the development and training for its 33-strong workforce. It has a mix of large and small reseller customers, many of whom it has worked with for years.

“We’re not just ‘box movers’,” he said. “We offer a portfolio of products, services and associated accessories, as well as technical support. We operate in a sector where everyone tends to know everyone else – it’s a relationship business.”

Retaining revenue for growth

Rather than extracting cash from the business, funds are retained to finance future growth. This means Airsys can take advantage quickly as new opportunities emerge. Having cash available also means the company can afford to hold large stock levels, enabling it to give customers more choice and offer useful value-added services like next-day delivery.

“Retaining cash in the business also means we can offer longer credit terms. That helps customers with large or long-term projects who might struggle to agree credit terms with equipment manufacturers, such as on hire or fleet contracts,” said Hope.

 

Facing up to competition

Airsys is currently looking for larger premises as it grows, probably in the Southampton area. Unlike the non-stop, game-changing technology advances seen with mobile phones and computers, two-way radios usually have a lifespan of six to eight years. The sector faces new challenges though, largely driven by competition from China.

“We will see a lot of change in the next five years in terms of consolidation and increased competition,” predicted Hope. “If we make the right moves now, then in 10 years’ time we will look back and realise that this was a pivotal point in our development. If we just continue as we are now, we could go into decline very quickly.”

Although Airsys has grown organically over its first 25 years, the company is prepared for whatever the future holds. “We are flexible and nimble, so we can stay ahead of the curve as competition intensifies. We’re ready for anything and focused on our goal to offer the best value for customers,” he said.