BDC Magazine - Grafton Merchanting GB - 2014

THE MAGAZINE FOR THE CONSTRUCTION INDUSTRY

BUILDING DESIGN &

CONSTRUCTION ISSUE 205

ERITH

GROUP

COMMITTED TO LONG-TERM PARTNERSHIPS WE TALK TO STUART ACCLETON, HEALTH, SAFETY AND NUCLEAR PROJECTS DIRECTOR AT ERITH GROUP

GRAFTON MERCHANTING GB

NATIONAL TRUST

8 BUILD

PLUS: BARRATT HOMES PAGE 46 SSE PAGE 108

SUPPLIERS AND DISTRIBUTORS: GRAFTON MERCHANTING GB

SUPPLY CHAIN SOLUTIONS

GRAFTON MERCHANTING GB IS A MAJOR PLAYER IN THE BUILDERS AND PLUMBERS MERCHANTS INDUSTRY BECAUSE IT BRINGS TOGETHER THE MAJORITY OF GRAFTON GROUP’S MERCHANT SUBSIDIARIES IN GREAT BRITAIN.

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ince being formed in 2008 to integrate Grafton Group’s British merchanting businesses within a single structure, Grafton Merchanting GB has gone from strength to strength. The company is a major player in the builders and plumbers merchants industry because it brings together the majority of Grafton Group’s merchant subsidiaries in Great Britain. In total, the organisation trades from nearly 500 locations, employs approximately 4,500 staff and has a turnover in excess of £1bn.

Grafton Merchanting has established itself as a reliable go-to leader within the market thanks to its recognisable brands which have become specialists in their own fields. These well-known names include Buildbase, Civils & Lintels, Corgi Direct, Hendricks Lovell, Hirebase, Jacksons Building Centres, L&G Forest Products, PDM, Plumbase, Nationwide Drylining & Insulation, Secon, Electricbase and Sparesbase.

By bringing the Grafton merchanting network together, increased collaboration and togetherness has brought about better customer service,

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improved value for money and a more efficient, reliable and effective solution for customer needs.

Indeed, this new structure will foster enhanced customer service and product sourcing gains, while there will be “one voice” when working with suppliers and manufacturers to make the experience of dealing with Grafton Merchanting GB as straightforward as possible.

There have also been advantages internally. For example, for staff there will be greater career opportunities to move between businesses and gain new skills and enhance personal satisfaction levels.

Meanwhile, specialities will be retained and respected. Grafton Merchanting GB includes businesses that specialise in particular market sectors.

This product knowledge, industry specialisation and strong individual brands are central to the success of the group. This specialisation is recognised as a great strength; and it will be nurtured and fostered within not subsumed or diminished by the new structure.

Customers, suppliers and staff can be reassured while they are dealing with a large, established and well-recognised organisation within the industry, the continued focus of Grafton Merchanting will be to

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SUPPLIERS AND DISTRIBUTORS: GRAFTON MERCHANTING GB

achieve superior levels of customer service, quality and competitive product and to act as a support to its customers businesses.

This is enhanced through the new organisation’s substantial backing of Grafton Group plc.

The Group plc is a Dublin-based organisation operating in the UK and Ireland whose principal activities are builders and plumbers merchanting, DIY retailing and mortar. In the UK Grafton is the fourth largest merchanting business trading from 426 locations. EuroMix is the market leader in the UK dry mortar market. In the Republic of Ireland, market leading brands include Chadwicks, Heiton Buckley, Sam Hire, Woodies DIY and Atlantic Homecare.

In Britain, Grafton operates the third largest builders merchanting business, is among the top four plumbers merchanting businesses and owns the largest dry mortar business. Buildbase was named Best national builders merchant in the UK for the fifth time in nine years. In Ireland, the Group operates the largest merchanting business in the country and the largest DIY retailers. In Belgium, further acquisitions increased the number of Belgian branches to 11.

Indeed, this year, the Group completed the acquisition of Binje Ackermans SA, a six-branch merchanting business based in Brussels, following

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approval of the transaction by the Belgium Competition Authority.

Elsewhere, in June the Group acquired Beaumont Forest Products, a specialist timber merchant which trades from three branches in the Greater London Area. And, in August Grafton completed the acquisition of Direct Builders Merchants Ltd, a general merchanting business trading from three branches located in Sittingbourne, Whitstable and Ashford in Kent. In addition, the Group acquired Gedimat-Ginion S.A., in September, a single branch general merchanting business located in Brussels.

Trading conditions for the overall Group remained favourable in the four months to the end of October supported by increased demand in the residential repair, maintenance and improvement (RMI) markets in the UK and Ireland. The pace of growth moderated somewhat as anticipated in the four months following strong growth in the first half. Revenue for the ten months to 31 October 2014 was ÂŁ1.76bn, an increase of 10.1% on revenue of ÂŁ1.60bn in the same period last year.

Volume growth in the UK merchanting business, which accounted for three quarters of Group

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SUPPLIERS AND DISTRIBUTORS: GRAFTON MERCHANTING GB

revenue, has continued to be driven by the ongoing recovery in residential RMI activity and in the new housing market. Favourable trading in the established business combined with acquisitions and strategic development initiatives have led to total revenue growth of 10% in the ten months to October 2014.

The marked improvement in first half trading in the merchanting business in Ireland continued through the four months led primarily by a recovery from a very low base in demand in the residential RMI segment of the market and a tentative recovery in house building.

Demand in the Belgium merchanting market continued to be impacted by a decline in consumer sentiment as the economy weakened after a positive start to the year. The revenue decline in the like-for-like business in the four months to October was principally due to lower volumes in the readymix division.

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Demand in the DIY business in Ireland continued to be subdued by pressure on household budgets. The like-for-like revenue comparison for the four months to October was also impacted by very strong demand for seasonal products in the prior year and by discontinuing a number of product ranges as the business refocused on its core strengths of DIY, Home and Garden.

The mortar manufacturing business in Britain continued to benefit from the recovery in the new housing market. Strong demand for new homes was stimulated by a significant improvement in consumer confidence, increased mortgage lending and the Government’s Help to Buy scheme.

The Group financial position continued to be strong with good cash generation from operations, a low level of net debt and significant undrawn bank facilities to fund operating and development activity.

Gavin Slark, Chief Executive Officer of Grafton Group plc said, “As anticipated, the growth in the

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THE MORTAR MANUFACTURING BUSINESS IN BRITAIN CONTINUED TO BENEFIT FROM THE RECOVERY IN THE NEW HOUSING MARKET.

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SUPPLIERS AND DISTRIBUTORS: GRAFTON MERCHANTING GB UK market continues to moderate from the first half and the Irish Merchanting business is showing a marked improvement from a very low base. The overall outlook continues to be positive and the Group remains on course to report full year operating profit in line with its expectations.”

ENVIRONMENTAL CONSIDERATION The Group recognises the increasing importance of supplying renewable and sustainable products. Product ranges designed to provide sustainable building solutions have been introduced. These ranges include Solar Thermal and Solar PV, air source heat pumps, ground source heat pumps, biomass heating, rainwater harvesting and heat recovery ventilation systems. The Woodie’s DIY business offers a range of environmentally friendly products including energy-saving lamps, solar garden lights and composters for recycling garden and household waste. The merchanting branches stock condensing boilers, which reduce demand for fossil fuels, energysaving insulation materials and controlled ventilation systems.

Grafton Merchanting GB is a Green Deal Provider. Sponsored by the Department of Energy and Climate Change (DECC), The Green Deal is an initiative to encourage home and business owners to improve the energy efficiency of their properties. It provides a platform to enable customers to engage in this initiative which provides finance to property owners for the installation of energy efficiency measures.

The UK merchanting brands are ISO 14001 certified. Branches have an environmental champion who is responsible for managing environmental policies and procedures.

The UK merchanting business published ‘Go Green with Grafton’, a brochure for trade customers which looks at aspects of sustainable development from legislation to product performance.

THE GROUP RECOGNISES THE INCREASING IMPORTANCE OF SUPPLYING RENEWABLE AND SUSTAINABLE PRODUCTS.

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