BMF KPI Report 2017

BMF

KPI Report For the 12 months ending April 2017

Key Performance Indicators Benchmarks for the UK Builders Merchants Sector BMF Business Reporting

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BMF KPI REPORT For 12 months ending April 2017 2013

Overview Steady growth in a relatively benign climate The BMF’s Key Performance Indicators report for 2016/17 indicates how the trading performance of builders merchants fared over the twelve months ending April 2017 compared with the two previous years. The building materials market during the period of this report has had strong growth. The BMF Sales Indicators reported that for the 12 months ended April 2017 compared with the previous 12 month period, total sales by merchants had increased by 7.6%. A strong positive sales growth figure of a 10.6% increase is also seen in the sales increase/decrease graph in this report.

The report shows that: • The Independent BM sector continues to see healthy growth increasing to 10.6% as reflected in the report. This Sales Growth is a result of a combination of factors including price increases on material price inflation and volume growth • Trading margins have remained steady in the past year in the face of inflationary challenges • Percentage of sales from stock remained constant; as did the proportion of direct sales • A half percent increase in net profitability reflects the healthy sales growth all participants are currently experiencing • Bad debt trend continues to reflect the benign trading climate • Some above inflation increases in salaries show cost of employment is higher reflecting low unemployment rates and market employment pressures which is also combined with higher mobility within the industry • Small decrease in overall Transport costs reflecting the fall in the price of oil • Sales per employee and Gross Profit per employee growth has been driven by the sales growth that businesses are achieving. Increases in both are partly as a result of higher volumes and price increases • Debtor days are fairly consistent with previous years.

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These numbers are based on the most recent publication at financial year ends and at this stage there appears to have been no significant impact of Brexit.

There are still many uncertainties ahead but these have not been realised in participant’s figures currently.

John Newcomb, Chief Exec of the BMF, said: “Builders’ merchants and their SME builders’ customers have continued 2016’s strong growth into 2017 with sales growth of 10.6% as highlighted in this report, and we remain optimistic for the coming months.

A year on from the Brexit result and we are still cautious about the impact of economic and political uncertainty that may impact the sector, but our builder merchant’s sales data shows that our members are delivering a robust performance in which is still a relatively uncertain environment.

We are confident this growth will continue and expect our members to continue to perform strongly despite the potentially unsettling future ahead as a result of a snap general election and the beginning of Brexit negotiations. The BMF will work with the Government to ensure the best outcomes for our members as the Brexit deal continues to be negotiated.”

Methodology The BMF 2017 Key Performance Indicators Survey was carried out among BMF independent merchant member companies in mid-2017. Member’s returns covered the periods to their year ends that fell between September 2016 and April 2017. It should thus be noted that the results are not for the full 2017 calendar year. The following ratios are a selection from the full survey findings.

They give a bench mark of how the independent merchanting sector performed.

The BMF Key Performance Indicator Report uses a core sample of participants that enables a true like for like comparison with previous year’s ratios. The core sample for 2017 has been maintained from last year. Revisions of some figures from member companies has caused the results for previous years to have changed from those stated in previous reports.

BMF KPI REPORT For 12 months ending April 2017

Percentage difference between total sales for current year and sales for the previous year

10.6%

Percent Increase/Decrease

Sales Increase/Decrease 16

Unadjusted sales were up

15.6%

18

at 10.6%, an increase of

13.2%

2.2 percentage points.

14

10.6%

12

8.3%

10 8

% points 2016/17 v 2015/16

4 2 0

2013/14

2014/15

2015/16

Percent Increase/Decrease

30.9%

Gross margins reduced by 0.1 points compared to the previous

33 32 31

31.0%

31.0%

30.6%

30.9%

30 29

Percent Increase/Decrease

- 0

1

28

2014/15

2015/16

2016/17

Sales from Stock

81.6%

year.

% points 2016/17 v 2015/16 2013/14

Ex stock sales as a percentage of total sales

2

2016/17

Trading Margins Gross Margins as a percentage of total sales

+ 2

The proportion of ex-stock sales to total sales remained the same as in 2015/16.

85 84

83.3% 82.2%

83

81.6%

81.6%

82

% points 2016/17 v 2015/16

81

- 0

0

80

2013/14

2014/15

2015/16

2016/17

3

BMF KPI REPORT For 12 months ending April 2017 2013

Sales Direct

18.4%

total sales remained the same as Percent Increase/Decrease

Direct sales as a percentage of total sales

The proportion of direct sales to 18.4%

19

17.8%

16.7% 17

% points 2016/17 v 2015/16

16

2014/15

2015/16

Net Profitability

0

Net profit after interest improved 5.5

4.6%

Percent

5.0

by 0.5 percentage points.

4.8%

4.5 4.0

% points 2016/17 v 2015/16

3.4% 3.5 3.0

2013/14

2014/15

2015/16

+ 0

5

2016/17

Bad Debts

Bad debts as a proportion of credit sales reduced by 0.03

Bad debts as a percentage of credit sales

0.5

percentage points compared with

0.49%

2015/16.

Percent

0.48

0.45%

0.46

0.43%

0.44 0.42

0.40%

0.4

2013/14

4

0

2016/17

5.3%

Net profit after interest as a percentage of total sales

0.40%

in 2015/16.

18

2013/14

5.3%

18.4%

2014/15

2015/16

2016/17

% points 2016/17 v 2015/16

- 0 03

BMF KPI REPORT For 12 months ending April 2017

Salaries as % of Gross Profit Salaries and related costs as a percentage of gross margin

a percentage of gross margin

50 49

Percent

46.9%

Salaries and related costs as increased by 0.4 percentage points over 2015/16.

49.5%

48

47.0%

46.5%

46.9%

47

% points 2016/17 v 2015/16

46 45

2013/14

2014/15

2015/16

Sales by each employee increased by 4.9% over 2015/16.

220

£200,190

210

1000’s

£209,025

£199,210

£209,025

200 190

£183,650 % 2016/17 v 2015/16

180 170

2013/14

2014/15

2015/16

+ 4

9

2016/17

Profitability of each employee

Gross Profit per Employee

increased by 4.6% over 2015/16. £64,555

Gross profitability of each employee

65

£62,148

£61,707

£56,153

1000’s

60

£64,555

4

2016/17

Sales per Employee Total sales by each employee

+ 0

% 2016/17 v 2015/16

55

+ 4

6

50

2013/14

2014/15

2015/16

2016/17

5

BMF KPI REPORT For 12 months ending April 2017 2013

Average Cost per Employee Salary and wages costs of each employee

£30,265

31

1000’s

30

£30,265

The average payroll cost per

£28,674

29

£27,792

% 2016/17 v 2015/16

28

2013/14

2014/15

2015/16

Percent

9.4%

10.0

all merchants decreased by 0.2

9.8% 9.6%

percentage points compared with 9.6%

9.6

2015/16.

9.4%

9.4

% points 2016/17 v 2015/16

9.0

2013/14

2014/15

2015/16

2016/17

8.5%

increased by 1 percentage points compared with 2015/16.

8.2%

8.0

7.5% % points 2016/17 v 2015/16

7.5

7.0

2013/14

6

2

8.0% Percent

8.5%

- 0

Mixed merchants’ transport costs

Transport Costs – Mixed 8.5

5

Road delivery costs overall for

9.2

Road transport costs for mixed merchants as a percentage of delivered sales

+ 5

2016/17

Transport Costs Overall 9.8

over 2015/16.

£29,225

27

Road Transport costs for all merchants as a percentage of delivered sales

employee increased by 5.5%

2014/15

2015/16

2016/17

+ 1

0

BMF KPI REPORT For 12 months ending April 2017

Transport Costs – Heavyside 17.0

16.6%

costs fell marginally over 2015/16

17.3%

18.0

Percent

Road transport costs for Heavyside merchants as a percentage of delivered sales

Heavyside merchants’ transport

16.6%

16.0

by 0.7 percentage points.

16.6%

15.1% % points 2016/17 v 2015/16

15.0 14.0

2013/14

2014/15

2015/16

- 0

7

2016/17

Debtors outstanding days

Debtor Days

were increased by 2 days over

Trade debtor days outstanding

53

2015/16.

52

52

50

Days

51

50 days

50

50

48

49

days 2016/17 v 2015/16

48 47

2013/14

2014/15

2015/16

+ 2

0

2016/17

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BMF KPI REPORT For 12 months ending April 2017 2013

The Builders Merchants Federation Ltd (BMF) is the only trade association representing and protecting the interests of builders’ merchants and suppliers to the merchanting industry in the UK. Total membership as of July 2017 stands at 600 merchant and supplier companies who together have combined sales of over £27bn and employ over 120,000 people in the building materials industry. BMF’s 316 merchant members operate over 4,900 branches across the UK.

Head Office 1180 Elliott Court, Coventry Business Park Herald Avenue, Coventry CV5 6UB Tel: 02476 854980 Fax: 02476 010390 Email: info@bmf.org.uk www.bmf.org.uk

© The Builders Merchants Federation, 2017. MF969

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