TRAILBLAZERS
RETURN ON CAPITAL: ROCK SOLID
1. JT Atkinson 2. CRS
93.7% 66.2%
3. National Timber Group Scotland54.6% 4. Beatsons
5. MGM Timber 6. MKM
7. Turnbull 8. Robert Pochin
9. Myers Building Supplies
10.AW Lumb
11.MP Moran
12.Sydenhams
13.Kellaway
14.Wolseley UK 15.Lords
16.John Nicholls 17.EH Smith 18.J T Dove
19.Huws Gray
20.Markovitz
21.LBS
22.Brewer
23.Parker Building Supplies
24.Walter Tipper 25.Haldane Shiells
26.Beggs & Partners
27.Grant & Stone
28.AW Champion
29.Beesley & Fildes
30.Alsford Timber
31.Carver
32.James Hargreaves
33.Joseph Parr
34.Bradford & Sons
35.Lawsons
36.Builder Depot 37.Williams
38.C&W Berry 39.Elliott Bros
40.Frank Key
41.Robert Price & Sons
42.Covers
43.Crossling
44.Browns
45.Kent Blaxill
46.Howarth Timber Supplies
47.John A Stephens 48.James Burrell
49.Travis Perkins
50.Grafton Merchanting GB 51.RGB
52.Arnold Laver
53.UK Plumbing Supplies
54.Saint-Gobain
45.5% 42.1% 40.5% 38.9% 38.2% 38.2% 36.8% 30.4% 28.5% 23.2% 23.6% 23.1% 22.8% 22.3% 22.3% 22.2% 21.6% 21.2% 20.8% 19.5% 19.5% 19.1% 18.0% 17.6% 16.7% 16.6% 15.8% 15.8% 15.1% 15.0% 13.5% 13.5% 12.3% 12.0% 11.9% 10.7% 9.3% 9.0% 8.5% 8.3% 7.4% 4.7% 2.7% 2.5% 1.9%
-0.1% -0.5% -6.4% -7.3% -8.1%
-476.8%
BMJ INDEX: SPECTACULAR SCORES
1. National Timber Group Scotland 2,415 2. Lords
3. Beggs & Partners 4. CRS
5. EH Smith 6. AW Lumb 7. Markovitz 8. LBS
9. JT Atkinson
10.Beatsons
11.Lawsons
12.Wolseley UK
13.Robert Pochin
14.Beesley & Fildes
15.Carver
16.MP Moran
17.MKM
18.J T Dove 19.Williams
20.Haldane Shiells
21.UK Plumbing Supplies
22.Sydenhams
23.AW Champion
24.Kellaway
25.Howarth Timber Supplies 26.Turnbull
27.Parker Building Supplies 28.James Hargreaves
29.Grafton Merchanting GB 30.RGB
31.Myers Building Supplies
32.Arnold Laver
33.Travis Perkins 34.James Burrell
35.John Nicholls
36.John A Stephens
37.Kent Blaxill
38.Alsford Timber
39.Browns
40.Walter Tipper
41.Joseph Parr
42.Builder Depot 43.Elliott Bros
44.Huws Gray
45.Frank Key
46.Crossling
47.Robert Price & Sons
48.Covers
49.Brewer
50.C&W Berry
51.Saint-Gobain
52.MGM Timber
53.Grant & Stone
54.Bradford & Sons
2,330 1,463 1,365 1,076 872 567 510 478 454 441 375 347 343 277 265 187 78 54 43 36 32 28 14 -8
-16 -21 -23 -34 -46 -47 -57 -74 -77 -91
-151 -163 -183 -183 -216 -222 -235 -238 -241 -316 -400 -471 -672 -790
-1,742 -7,914 n/a n/a n/a
April 2022 A supplement to builders merchants journal 13
LEAGUE TABLES
RETURN ON CAPITAL
Another table worth sharing with your shareholders, financiers and banks: it shows that merchants make money. If we exclude the outliers (top and bottom five), the average ROC achieved by the 44 companies in the middle ground was 17%. Narrow it down by excluding the top and bottom 10 instead of five, and you still get an average across the remaining 34 companies of 16.3%. And that’s the middle ground, remember, not the industry stars. Invite your shareholders to consider what other industries would be likely to deliver that level of return on their investment – year after year. Because this isn’t a fluke: over the past five years, that ‘middle ground’ return on capital has averaged 15.9%.
BMJ INDEX
The BMJ index is intended to serve as a broad indicator of a company’s overall market competitiveness. It is calculated by taking three of what we see as the most important trading ratios – sales growth, operating margin and stockturn – and multiplying them. A drop in sales or an operating loss thus automatically generates a negative index score, and of course many merchants have recorded a drop in sales in their latest accounts. Therefore only 23 of the 54 companies listed here are showing positive index scores – but some of them are quite spectacular.
Whether it’s directly connected to the effect of the pandemic is debateable, but there has been a lot of merger and acquisition activity, and that’s reflected in this table. National Timber Group Scotland, Lords and Beggs & Partners all achieved their very high index scores through substantial acquisitions, leading to big sales increases. CRS (now owned by Grant & Stone) saw sales up 20%, as did EH Smith. AW Lumb recorded an extraordinary stockturn of nearly 18 times. Markowitz opened more branches, moving into Scotland for the first time, and boosted sales by 24%. And further down the table are merchants who achieved respectable double-digit and triple-digit index scores – simply by being consistently good at what they do.
Source: BMJ analysis of filed company results
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