The latest viewpoint from the magazine
January 17 2012
Going for gold
With 2012 upon us PBM’s Paul Davies introduces this year’s PBM anuual Top 20 merchant countdown and reflects on a tough year for the sector.
First of all, please allow us to take this opportunity to wish you all a very happy and prosperous New Year!
Most, I’m sure, will not be disappointed to close the door on 2011. As the year progressed, any early glimmers of hope for recovery diminished all the more. Yet what a fascinating twelve months it was — internationally, we witnessed the ‘Arab Spring’ whilst other major news included the deaths of Osama Bin Laden, Colonel Ghadaffi, and Kim Jong Il. Back at home, any sense of Britishness could be defined by the extremes of April’s Royal Wedding and August’s riots, perhaps with the Leveson enquiry somewhere in between.
The global economy still struggles, compounded by the sustained Eurozone crisis, and the trickle down effect means the UK building industry continues to have a torrid time — with merchants once more in the firing line. And when it comes to our corner of construction, the major headlines have to include Wolseley’s sale of Build Center to Jewson — indicating another swing at the ‘top’ of the industry, following Travis Perkins’ acquisition of BSS in 2010 — whilst recent weeks heralded the news of a significant restructuring of the BMF, including a move away from its current central London home.
Continuing this theme of reflection at the start of the year, we at PBM have compiled our annual round-up of the UK’s largest merchant companies (Top 20 Chart). Based on forecasted turnover figures for 2011 direct from the merchants themselves, we believe our Top 20 Chart to be the most accurate and up to date listing of its kind*. We are of course aware that the highest turnover is not necessarily the be all and end all, however we feel our round-up presents a useful benchmarking exercise and provides a fascinating picture of the composition of the industry.
Whilst the spread of the UK’s largest merchant business is undeniably vast — from TP et al with their turnover in the £billions to the still-not-insignificant near £36m reported by Grant & Stone in 20th place — when viewed on a more ‘local’ level the opportunities, challenges and issues affecting all merchant businesses are all essentially the same and should resonate across the board. And certainly beyond affecting only the companies we list here.
In compiling our countdown, there are recurring themes throughout — HPS and Grant & Stone, for example, cite the opportunities be presented by internet trading with the latter revealing it is turning over up to £350,000 per month from online sales alone. As you would expect, renewable technologies is another key area — RGB opened three Eco Centres during 2011 whilst Elliotts is soon to launch a Sustainable / Renewables Centre in Southampton.
Most anticipate 2012 to be another challenging year, yet know the focus must remain on fully meeting the needs of the customer. Service — brought about through further efficiency measures and maximising synergies, or by investing in branch refurbishments and IT systems — remains paramount.
And, quite appropriately in the build-up to the country’s hosting of the Olympic Games this year, a further key facet in delivering that is related to training. Huws Gray, for instance, has committed to a comprehensive training and development scheme for all staff, beginning with its directors and managers. The significance is best summed up by MD Terry Owen who so wisely comments: “Training starts with Management and I have as much to learn as anybody.”
We can be sure that 2012 will once more be challenging and there are certainly no quick fixes, but the merchant industry has once again proved its willingness to innovate, adapt and diversify. However, many business opportunities are there to be capitalised upon, and as with London 2012, putting in the preparation will be the key to success.
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