LEAGUE TABLES GROSS MARGIN
Comparing gross margins between companies is risky, because there’s no standard definition of ‘cost of sales’. AW Champion and AW Lumb, for instance, obviously don’t use the same method of calculating their costs of sales, so there’s no point in try to compare their gross margins. But it’s reasonable to assume that most companies are consistent in their reporting from year to year, so it’s valid to look at longer-term trends in gross margin – and this discloses a slightly worrying trend. The average gross margin achieved by the Trailblazers-listed companies this year is a respectable 27.8%. But that’s marginally lower than last year’s 27.9% - which was in turn rather less marginally lower than 2019’s 28.6%. And in 2018 and 2017 it was higher still, at 28.7%. So the average has been declining gently but steadily for the past five years.
Looking further back, the trend changes: an average of 28.2% in 2015, rising to 28.4% in 2016 and 28.7% in 2017. These aren’t exactly massive changes, of course. But given that pretty much every other key ratio in the merchant business starts with the difference between buying price and selling price, the fact that the average Trailblazers gross margin is now at a seven-year low has to be a cause for concern.
GROSS MARGIN GROWTH
An almost perfect balance here: 26 of the 52 Trail Blazers improved their gross margin in the latest financial period, and 25 of them saw their gross margin decline. And an almost perfect balance in the value of the rise/fall, too: among those who recorded a rise the average gain was 3.9 percentage points, and among those who recorded a fall the average decline was 4.2 percentage points.
So really the only conclusion to be drawn here is that if the Trailblazers can be taken as a representative group of the industry as a whole, then gross margins in merchanting have remained steady in the latest financial period.
GROSS MARGIN: CAUSE FOR CONCERN 1. AW Champion 2. MP Moran 3. Sydenhams
4. Nicholls & Clark 5. Lawsons 6. Frank Key 7. LBS
8. Alsford Timber 9. Covers
10.Huws Gray 11. Beatsons
12. Boys & Boden 13. Bradford & Sons
14.Walter Tipper
15. John A Stephens 16.RGB
17. JT Atkinson 18. Kent Blaxill
42.3% 40.5% 40.1% 38.2% 37.9% 37.0% 35.5% 35.3% 35.2% 34.3% 33.1% 32.6% 32.2% 32.1% 31.8% 31.8% 31.6% 31.0%
19. Howarth Timber Supplies 30.8% 20. Grant & Stone 21. Travis Perkins
22. National Timber Group 23. UK Plumbing Supplies
30.4% 30.2% 29.0% 28.9%
24.Parker Building Supplies 28.8% 25.JT Dove
26. Builder Depot 27. Haldane Shiells
28.CRS
29. John Nicholls
30. James Hargreaves 31. Robert Price & Sons
32.MKM
33. Turnbull 34. Joseph Parr
35.Myers Building Supplies 36. Lords
37. Grafton Merchanting GB 38. EH Smith 39. Crossling 40. Markovitz
41.MGM Timber 42. Carver
43.Wolseley UK
44.Beggs & Partners 45. Williams 46. Kellaway
BMJ LEAGUE TABLES SPONSORED BY
47. James Burrell 48. Beesley & Fildes 49.C&W Berry 50. Elliott Bros 51. Browns
52. AW Lumb 53. Jewson
6
28.6% 28.4% 28.3% 28.1% 27.5% 27.5% 27.4% 27.1% 26.8% 26.7% 26.1% 25.8% 25.3% 24.6% 24.6% 24.5% 24.0% 24.0% 23.1% 23.1% 22.0% 21.1% 19.7% 18.0% 17.6% 16.5% 15.1% 11.2% 8.9%
TRAILBLAZERS
GROSS MARGIN GROWTH: HOLDING STEADY 1. C&W Berry 2. Browns
3. Walter Tipper 4. Carver
5. Lawsons 6. Kellaway
7. Wolseley UK 8. MP Moran 9. Frank Key 10. Markovitz 11. LBS
12. Alsford Timber 13. Haldane Shiells
14.Covers
15. Travis Perkins
16. Nicholls & Clarke 17. Joseph Parr
18. James Hargreaves 19. EH Smith 20.RGB
14.8% 10.9% 6.8% 6.8% 5.0% 4.9% 4.8% 4.6% 4.1% 4.1% 3.9% 3.7% 3.7% 3.5% 3.0% 2.9% 2.7% 2.6% 2.0% 2.0%
21. Howarth Timber Supplies 2.0% 22. Kent Blaxill 23. Sydenhams 24.J T Dove
25.Parker Building Supplies
26.CRS
27. Beatsons
28. Grant & Stone 29. Bradford & Sons 30. James Burrell 31. JT Atkinson 32. AW Champion
33. National Timber Group
34.Myers Building Supplies 35. Turnbull
36. Builder Depot
37.MKM
38. AW Lumb 39. Crossling 40. Elliott Bros
41. Robert Price & Sons 42. John A Stephens
43. Grafton Merchanting GB
44.Huws Gray
45. Boys & Boden 46. John Nicholls 47. Lords
48. UK Plumbing Supplies
49.MGM Timber 50. Williams 51. Jewson
52.Beggs & Partners 53. Beesley & Fildes
1.6% 1.5% 0.8% 0.8% 0.7% 0.4% -0%
1.0%
-0.1% -0.4% -0.7% -1.0% -1.1% -1.2% -1.4% -1.7% -1.8% -1.8% -2.3% -2.6% -2.7% -2.9% -3.1% -3.0% -4.7% -5.9% -6.6% -6.7% -7.3%
-10.7% -12.6% -16.4%
A supplement to builders merchants journal April 2021
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