Builders' Merchants News

Leading Lights 2/5

Published:  23 June, 2011

National merchant leaders

1 Travis Perkins
Turnover 2010: £3153m (2009: £2931m)
Chief executive: Geoff Cooper
Tel: 01604 752424
Stock: heavyside and lightside
Branches: 1125
Affiliations: BMF, CBA, Cemco, CPA, H&B, NBG, NMBS, WBM, Unimer.

Travis Perkins is Britain’s largest merchant. Its acquisition of BSS in 2010 was the highlight of the year for the company and the sector. TP acquired a strong company with quality people and that the prospects for the business are excellent and exciting, it said in its latest financial report.

Geoff Cooper, chief executive, said: “The group made excellent progress in 2010, a year in which our organic development strategy, against a background of depressed levels of construction activity, produced a strong financial performance.

“The Group achieved further market share gains and impressive increases in profits. Its strategic position and prospects in the UK have been considerably strengthened through the recent completion of the BSS,” he said.

“Our three main targets for 2011 are to drive organic growth, drive cash generation and to integrate BSS to get the best out of the acquisition. We have made a strong start to 2011 and consequently we look forward to another year of good progress.”

2 Wolseley UK
Leamington Spa, Warwickshire
2010: £2466m (2009: £2699m)
Group chief executive: Ian Meakins
Branches: 1486 (10 business units)
T: 01926 705000
Stock: 55% lightside, 30% heavyside, 15% commercial and industrial
Affiliations: CBI, CPA, Housing Forum.

In 2010, Wolseley group revenue was down 9% to £13 203m. Revenue in the UK declined by a similar amount due to the impact of disposals and branch closures with like-for-like revenue broadly flat. The business generated 5% like-for-like revenue growth in the second half as markets started to recover and the company expects the overall recovery to remain weak as activity levels are held back by fragile consumer confidence, and low availability of credit.

Public sector activity, which represents around a quarter of Wolseley UK revenue, will come under pressure
following government spending cuts. In its annual report Wolseley said: “We have seen a continuation of the gradual recovery in the more resilient RMI sector, which represents about 65% of our revenue. Commercial and industrial markets have remained relatively weak throughout the year.”

Trading profit in the year of £91m was £36m ahead of the prior year, of which £23m arose from the exit of the business in Ireland. “A significant decline in gross margins as a result of competitive pressure was substantially offset by reductions in the cost base arising from restructuring actions taken in the prior year,” the company said.

Plumb and Parts Center performed well and ahead of the prior year.

In addition, Build Center, which was loss-making in 2009, strongly improved its trading performance and returned to profit in the year, benefiting from a lower cost base. The UK businesses maintained market share in the year. The trading margin for the UK was higher at 3.7% against 2% in 2009.

3 Grafton Group
Dublin, Ireland
Turnover 2010: £2000m (2009: £1980m)
Chief executive: Michael Chadwick
Chief operating officer: Leo Martin
Tel: +353 (1) 2160 600
Stock: heavyside and lightside
Branches: 582 (UK and Ireland)
Affiliations: BMF, CPA, Euro-Mat, NMBS, Unimer, WIM.

Grafton operates in the UK and Ireland with business in Ireland under particular strain.

Grafton Group expects profit to improve this year, with UK housing recovery boosting demand. Grafton’s UK sales were up 8% in the first two months of the year. It reported an 88% rise in pre-tax profits to € 25.6m for the 12 months to the end of December. Revenue increased by 1% € 2bn and that its net debt fell from € 322m to € 255m last year.

Michael Chadwick, executive chairman said: “The Group’s strong financial position and lower cost base leave it well placed to benefit from improvements in its markets. The UK economy appears to be in a modest growth phase and activity in our sector has recovered from historically low levels. The outlook for Ireland remains unpredictable. Group turnover for the first two months of 2011 is encouraging with a continuation of like-for-like sales growth in the UK and signs of stabilisation in Irish turnover. We expect further improvement in profit as markets recover.”

Grafton is to acquire 10 of TP’s plumbing and heating branches in England and Wales – nine trade as
PTS and the other as City Plumbing Supplies.

Next month, Gavin Slark takes over from Michael Chadwick as group chief executive designate. Mr Slark was previously group chief executive of BSS Group, now part of Travis Perkins.

4 Saint-Gobain
Paris, France: (UK head office Coventry)
Group turnover 2010: € 40119m (2009: € 37786m)
SG Building Distribution UK & Ireland 2010 turnover: £2000m
Group Chief executive (and chairman) Pierre-André de Chalendar
Chief executive SG Building Distribution UK & Ireland – Peter Hindle
Tel: 02476 56 0700
Stock: heavyside and lightside
Branches: 900 (UK Building Distribution)
Affiliations: BMF, CBA, Cemco, CPA, H&B, NBG, NMBS, Unimer, WBM.

Saint-Gobain designs, manufactures and distributes building materials. In the UK and Ireland, the Building Distribution division has 900 sites, including general and specialist merchants, such as Jewson, Graham, CTD and Gibbs and Dandy.

The Saint-Gobain Group returned to growth in 2010, reporting a 1.9% increase in like-for-like sales against the backdrop of a global economy still recovering from the crisis. Building Distribution saw a slight 1.5% decline in year-on-year trading because of tough conditions in the first half.

“The business sector got back on the growth track in the second half of 2010 (up 1.0%), despite severe weather conditions at the end of the year. This trend was fuelled by a gradual recovery in Germany, the UK and Scandinavia as from March (each of these countries delivering robust growth in the second half of the year)", the company said in its annual report.

2010 saw the group emerge from the crisis and gradually return to growth. Overall in 2011, the group expects more upbeat trading conditions in its main markets. However, trends will continue to vary widely from one region to the next.

In Western Europe, trading on industrial markets should remain brisk, while construction markets should continue to recover, particularly newbuild and renovation segments. This overall improvement should nevertheless conceal continuing stark contrasts from one country to the next: the group’s key markets (France, Germany, UK, Scandinavia) should continue to recover, while Southern Europe will remain challenging, the company said.


Regional leaders

Merchants under £50m turnover

Merchants under £25m turnover


BMF Builders’ Merchants Federation
BMTPF Building Materials & Technology
Promotion Council
BWF British Woodworking Federation
CBA Combined Buying Association
Cemco Cemco Merchant Network
CPA Construction Products Association
GGF Glass & Glazing Federation
H&B H&B  Buying Group
IoBM Institute of Builders’ Merchants
NMBS National Merchant Buying Society
TTF Timber Trade Federation
UNIMER United Merchants











Financial data: Information is supplied by the companies listed, independently verified where possible, and accurate at 22 March 2010.

This report was first published in the April 2011 issue of Builders' Merchants News.