Welcome to Moorgate Management’s latest edition of Merchant Matters. In this edition we will be exploring the latest news and topical stories from around the building materials industry to help you with the information you need to grow your business and plan for the future.
Monthly Market Review
There are positive signs for the construction market, with the Construction PMI for May 2024 rising to its highest level since May 2022. The reading showed that there are indications of improved stock availability in the supply chain. Click here to read more.
We have also seen a really interesting update from Noble Francis at the Construction Products Association, using brick deliveries as a way to examine housebuilding starts. Deliveries rose in April for the fourth consecutive month, albeit from a low base in December, highlighting a rising sentiment in the wider housing market. Current like-for-like comparisons are lower and future demand will be reliant on interest rates in H2 of 2024. Click here to read more.
The Merchant View
The Builders Merchant Building Index (BMBI) report for Q1 of 2024 shows trading was down -7.2%, with lower cost inflation of +1.6% exposing that volume sales were –8.7% down during the period. Category wise, renewables and timber and joinery were the largest under-performers in the quarter. Click here to learn more.
According to the Plumbing & Heating Merchant Index (PHMI), trading during Q1 of 2024 was -3.6% down, with a slightly higher cost inflation of +3.0%, exposing that volume sales were down -6.4%. Click here to learn more.
The latest figures from Timber Development UK for Q1 of 2024 showed timber imports were lower than in Q1 of 2023, reflecting overall market conditions, but import prices are stabilising closer to pre-Covid levels. Click here to learn more.
Merchants: Acquisitions and Organic Growth
LBS Builders Merchants has made a positive acquisition of the Denman branch in Pengam/Hengoed, complementing their existing branch network and providing customers with an additional trade counter opportunity. Click here to learn more.
Wolseley Group has also made an interesting acquisition of Renewable Equipment Solutions, enhancing the renewables solutions it can offer and supporting its recently launched ‘Renewables by Wolseley’ product range. Click here to learn more.
Organic growth in the industry continues with the opening of a new Smiths Brothers Stores (SBS) branch in Nottingham. Click here to learn more.
Suppliers: Acquisitions and Organic Growth
Vertical integration continues at Heidelberg Materials with its acquisition of muck away contractor M&A Group, following on from its recent acquisition of Mick George. Click here to learn more.
A new strategic partnership between DAY AGGREGATES LIMITED and ENCYCLIS is creating a new sustainable manufactured aggregates plant supported by GRS. Click here to learn more.
Merchant Buying Groups
Here’s an interesting piece by Revegy discussing both buying groups and supplier partners, highlighting the opportunities and strategies that exist to help both partner successfully with merchant members. Click here to learn more.
Industry Trade Associations
The industry has seen a positive step forward for plans to stimulate demand in the market, with the Builders Merchants Federation Ltd and Federation of Master Builders launching the “Get Britain Building” Campaign. It has clear messages on how the newbuild sector can kickstart new homes delivery, for RMI to scale up retrofit of existing homes, and for CO2nstructZero to invest in decarbonised energy and training. Click here to learn more.
Merchant Insights
Based on our experience with new branches, we wanted to share with you some of the key questions merchants should consider and make sure they get right, so they can maximise the existing opportunities that a new branch will bring. Click here to learn more.
With the drive towards a net zero world and the Construction Leadership Council’s ‘Construct Zero’ plan to help our industry meet these objectives, there is an ever increasing demand from merchants’ customers for information, advice and availability of products to deliver sustainability. Click here to learn more.
Merchant Case Studies
We were contacted by a heavyside merchant owner that was experiencing a decline in sales and profitability as well as changes in branch employees all of which followed a business acquisition. Click here to find out how we were able to help
We were contacted by a distributor who was facing challenges with Class 2 driver retention and recruitment, as well as utilisation of their vehicles and running costs. We were asked to help find solutions that would improve retention, efficiency and reduce cost to serve. Click here to find out more.
If you’d like to learn more about how we can help you grow, adapt or develop your business, get in touch with Moorgate Management Limited today for your free, informal and confidential consultation, or call 07767 291 379.
Thank you for reading.