Benchmark
AXMINSTER: MORE OWN-BRANDS The Numbers
Sales £m Gross profi t £m Operating profi t £m Staff
Pre-tax profi t £m 0.5 0.3 255 263 6.6 7.0
Salaries £m
The Ratios Stockturn
Gross margin % Net margin %
13/14 14/15 2.2
2.1
Operating margin % 5.8 1.5
40.8 15.5 1.4 1.3
277 7.3
15/16
13/14 14/15 15/16 16/17 17/18 %change 34.3 35.5 13.3 13.6 2.0 0.5
47.5 43.7 -8.1 14.8 15.6 5.5 -1.0 0.5 n/a -1.1 0.5 n/a 287 292 1.7 8.0 8.0 0.0
16/17 17/18 %change 2.5 2.4 2.4 -0.5
38.6 38.5 38.0 31.1 35.7 14.9 1.3 3.5 -2.0 1.2 1.0 3.2 -2.3 1.1
Staff costs/turnover 19.1 19.7 13.0 16.8 18.3 8.9 Return on capital % 10.1 DIY Week index
6.5 24.6 -23.9 9.2 -138.3 -23
Axminster revised its product off ering in 2017/18, with more emphasis on own-brands and reduced exposure to mass-market power tool brands. The result was an 8% drop in sales, but a 5.5% improvement in gross profi t, and a return to profi t at operating and net levels. Even so, the gross margin is still below the 38%-plus achieved consistently before 2016/17, and Axminster remains a middle-of-the-road performer judged by most of our long-term indicators. Stockturn is notably lower than average for the category, but that can be read two ways: negatively, in that it suggests too much stock gathering dust on the shelves, or positively, in that it indicates a determination to meet customer demand with instant availability. Take your pick.
AL MURAD: SALES GROWTH SLOWS DOWN The Numbers
Sales £m Gross profi t £m Operating profi t £m Staff
13/14 14/15 15/16 16/17 17/18 %change 28.3 32.4 11.3 15.6 2.5 6.1
Pre-tax profi t £m 2.5 6.1 235 247 3.9 4.4
Salaries £m
The Ratios Stockturn
13/14 14/15 6.8 6.7
Gross margin % 40.0 48.1 Operating margin % 8.9 18.9 8.7 18.8 13.9 13.7 31.4 56.8
Net margin %
Staff costs/turnover Return on capital % DIY Week index
36.6 16.6 5.9 5.9
268 4.9
15/16 6.9
45.5 16.0 16.2 13.4 41.1
38.3 38.9 18.8 20.2
2 7
6.4 7.0 9 6.6 6.9 5 270 297 10 5.7 6.2 10
16/17 17/18 %change 5.5 4.7 (15) 49.2 51.8 16.8 17.9 17.2 17.7 14.8 16.0
5 7 3 8
35.7 30.1 (16) 144
Sales growth at the independent tile chain Al Murad slowed down quite considerably in the latest fi nancial year, but margins continued to improve nonetheless. The company’s main fi nancial strength is its operating margin, a spectacular 17.9% in the latest accounts, and an average of 15.7% over the past fi ve years. That’s despite the fact that its gross margin is lower than that of Tile Giant, its nearest rival, and much lower than that of the tiling market leader Topps. On the credit side, Al Murad’s stockturn is much higher than either of the others. Measured over the fi ve-year average, Al Murad has the second highest DIY Week Index score of all the retailers listed – but it will need to regain some sales growth to maintain that position.
18 DIY WEEK THE DIY MARKET SUPPLEMENT
n/a n/a
2019 THE DIY MARKET SUPPLEMENT B&M RETAIL: SPECTACULAR ROC
The Numbers Sales £m
Gross profi t £m
13/14 14/15 15/16 16/17 17/18 %change 1,509.1 1,526.2 1,902.6 2,252.3 2,629.1 16.7 512.7 525.5 652.8 777.8 888.9 14.3
Operating profi t £m 123.5 151.1 168.0 197.9 235.9 19.2 Pre-tax profi t £m 123.4 151.1 168.1 198.0 236.0 19.2 Staff
Salaries £m
The Ratios Stockturn
Operating margin % Net margin %
Staff costs/turnover Return on capital % DIY Week index
13/14 14/15 5.8 3.9
Gross margin % 34.0 34.4 8.2 9.9 8.2 9.9 11.9 11.6 43.8 45.2
15/16 4.0
34.3 8.8 8.8
11.4 38.0
14,997 18,316 21,684 24,536 26,496 8.0 179.1 177.3 217.8 261.6 296.4 13.3
16/17 17/18 %change 3.6 3.5
-1.8
34.5 33.8 -2.1 8.8 9.0 2.1 8.8 9.0 2.1 11.6 11.3 -2.9 39.4 38.9 -1.2 529
B&M is a discount chain where DIY clearly accounts for only a small part of the sales – but even a small part of £2.6bn is still a signifi cant amount. It’s the third biggest business in this survey, and at its current rate of growth it is on course to overtake B&Q within the next two years. It trades on a lower-than-average gross margin but a higher-than-average operating margin, with one of the lowest staff cost ratios in the survey, and a spectacular return on capital. We haven’t been able to calculate an average DIY Week Index fi gure for the fi ve years, because the 2013/14 accounts covered a 65-week period, but its average score over the past three years was 657 – which would put it in third place in the Index table.
ARGOS: THREE YEARS OF LOSSES The Numbers
Sales £m Gross profi t £m
13/14 14/15 15/16 16/17 17/18 %change 3,872.5 3,919.2 3,995.9 4,285.8 4,162.6 -2.9 968.9 1,005.2 996.2 1,027.0 967.5 -5.8
Operating profi t £m 60.8 82.0 -155.0 -1.6 -128.9 n/a Pre-tax profi t £m Staff
Salaries £m
The Ratios Stockturn
13/14 14/15 4.4 4.1
Gross margin % 25.0 25.6 Net margin %
15/16 4.0
24.9
44.0 97.1 -178.4 -25.7 -145.3 n/a 27,086 27,399 28,313 28,139 26,611 -5.4 390.3 386.7 408.7 468.0 426.2 -8.9
16/17 17/18 %change 4.3 4.1
-4.7
Operating margin % 1.6 2.1 -3.9 -0.0 1.1 2.5 -4.5 -0.6
24.0 23.2 -3.0 -3.1 -3.5
n/a n/a
Staff costs/turnover 10.1 9.9 10.2 10.9 10.2 Return on capital % 3.2 6.8 -19.0 -3.5 -25.4 -37
DIY Week index
Like many other retailers, Argos saw sales drop in 2017/18 after several years of healthy growth, but despite the decline it remains the biggest retail business covered by this survey. Big isn’t necessarily beautiful, though: the already-low gross margin declined for a third successive year, stockturn slowed down slightly, and the operating loss increased from a modest £1.6m to a thumping £130m. The reduction of around 1,500 in the staff headcount shows that the company is taking steps to correct the situation, but it already has the lowest staff costs of any retailer covered by this survey, so it’s not clear how much more it can do in this direction. And, of course, Amazon is breathing down its neck.
www.diyweek.net
-6.3 n/a
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