COMMENT


Money makes the world go round, the world go round


Fiona Russell-Horne Editor - BMJ


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Not everything that can be counted counts, and not everything that counts can be counted.


“ Albert Einstein ” INFO PANEL


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ABC audited average circulation


July 2016-June 2017: 7,419


osh. There are so many things of note to comment upon this month that I’m not quite sure where to start.


There’s the Budget (yawn) or the vexed VAT/Brexit question (cry) or the fact that a little Welsh builders merchant I first met at the BMF Monte Carlo Conference in 2001 is now the fifth largest in the country, having leap-frogged over Bradfords and MKM with his purchase of Ridgeons. Let’s start with the most positive of those options: way back in the mists of time, Huws Gray md Terry Owen had just announced turnover figures that were double what they had been five years previously and told me that he planned to do the same in a further five and in the five years after that and in the five years after that, too. Reader: he did it. Huws Gray didn’t just double their turnover with the purchase of Ridgeons from the Ridgeons family, they added a further 40 branches to the already quite sizeable 62-branch business.


A clear case of putting your money where your mouth is. Or, to be more accurate, putting someone else’s money where your mouth is, since the purchase of Ridgeons was funded by a cash injection from private equity concern Inflexion. Hardly surprising really. Much of Huws Gray’s earlier purchasing was funded in-house thanks to prudent management, clever buying, an aversion to spending for the sake of spending and an obsessive concern for sticking to the bread and butter business of knowing your customers, understanding their needs and providing for them at sensible, not silly, prices.


However, no amount of good housekeeping could really be expected to fund an acquisition


that takes a company from turning over £182m to turning over £358m in one fell swoop. So Huws Gray got Inflexion, its minority partner, to root around in its pockets for the cash to help it do so. Knowing how long these things take, it’s pretty clear that a move like this was very much on the cards when Inflexion’s stake in Huws Gray was announced in April.


Thus far, Huws Gray’s acquisitions have been piecemeal, the odd one or two-branch business here and there, occasionally slightly bigger, but all more or less part of a gradual expansion out from their north Wales springboard.


Buying Ridgeons is seismic, both in terms of what it will do for Huws Gray and what it will mean for the rest of the industry. The first thing that happened, of course, was the buying-group resignation letter. Huws Gray have long been the most high-profile exception to the better-in-than- out buying group rule and their loss will be felt keenly by both Fortis and PHG, although the sting for the former has probably been lessened by RGB’s transfer of its plumbing and heating purchasing from the latter.


It will be fascinating, if slightly trepidatious, to see how this new merchanting industry landscape develops. A couple of things I think we can take as read: that the landscape will continue to change and that Owen and John Lewelwyn Jones may find it harder than they did to continue with their double-turnover-every-five-years pledge. That said, if anyone can, Huws Gray are probably where I’d put my money.


And now I’ve not left myself much room for the other two topics so let’s just say Budget: curate’s egg, Brexit: basket-case.


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www.buildersmerchantsjournal.net November 2018


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