Continued strong demand sees sales soar for MKM Building Supplies

By Hull Daily Mail | Posted: 18 Apr 2017

Strong demand in the UK builders' merchant market has seen another strong year for MKM Building Supplies.

The Hull-based builders merchant has today unveiled a 13.2 per cent revenue growth and 51.3 per cent leap in profit before tax for the past financial year.

The company, which is headquartered in Stoneferry Road, also notched up a £19.9m operating profit for the financial year ending September 30 – up from £15.6m in 2015.

David Kilburn, executive chairman of MKM, said: "We are pleased to announce another strong full-year financial performance, delivering 13 per cent revenue growth over the period to over £284m, as well as growth in EBITDA and profit before tax.

"Our strong performance was driven by factors including a resilient RMI market against the backdrop of Brexit, together with product range extensions, including the roll-out of kitchen and bathroom showrooms across many of our branches, sensible margin control and good working capital management."

MKM is the UK's largest independent builders' merchant, providing building, plumbing, timber and heating supplies to builders, specialist tradespeople and the general public.

UNIQUE BUSINESS MODEL: MKM now has 47 branches throughout the UK, with branch directors owning an equity share in their branch.

New branches openings in Galashiels, Sharston, and Crewe means MKM now has 47 branches throughout the UK.

The group operates a unique business model in which branch directors own an equity stake in their branch.

Mr Kilburn said this model continued to drive high levels of customer service and this, allied with product range extension, has underpinned sales growth exceeding the market.

He said: "We continue to benefit from our unique business model, which sees branch director's take an equity stake in their branch and a share of profits.

"This allows us to attract, retain and incentivise the best talent, both financially and through autonomy, which plays out in levels of customer service.

"The UK builders' merchant market is anticipated to grow by 12 per cent to £13bn by 2020. Whilst rising inflation may reduce expectations for growth, we are still seeing strong demand driven by a backlog of RMI and a healthy new build market, supported by Government incentive schemes, continued good availability of mortgage finance and the low interest rate environment.

"We have started to see some cost pressures in the supply chain, but this is largely mitigated by sourcing a relatively large proportion of our products from our high-quality UK supplier base.

"We have a good track record of managing our margins, a strong balance sheet, and we will continue to invest in expanding our UK branch network, as well as in organic growth opportunities across the existing branch network to meet ongoing demand and deliver continued growth."

MORE: Exciting expansion plans for MKM Building Supplies as 3i and LDC stakes sold to Bain Capital

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