Selco was among the stand out performers for Grafton in its half year financials, with Selco Builders Warehouse seeing double-digit revenue growth, thanks in part to the new branches opened this year.
Selco is one of a number of Merchanting brands for Grafton, which also includes Buildbase, Plumbase and Macblair. Grafton’s overseas Merchanting brands include Gunters en Meuser (Netherlands).
Merchanting constitutes 91% of Group Revenue and in H1 2017 saw a 4% rise in revenue to £919.5m (2016 H1: £884m). Adjusted operating profit rose 1.2% to £51.5m (2016 H1: £50.5m). Revenue growth came from supplier price increases and modest volume growth. The H1 results also revealed:
- Price inflation was estimated at 2.5%
- Like-for-like merchanting volumes increased by an estimated 2.0%
- New branches and implants increased revenue by 2.75%
- A reduction in revenue by 3.1% due to the closure of 47 branches in Plumbase and the Contracts businesses in the last quarter of the 2016.
UK: Selco grows in branches and online
- Selco has added nine new branches in the year to date and will have two more by year end. Grafton said this expansion “reflects our confidence in the medium term outlook for the UK economy”.
- The new branches were opened in H1 in Beckton, Crayford, Guildford, Camberley and Cardiff where the business already has a successful branch. Since period end, four branches were opened in Thurrock, Warrington, Poole and Basildon. Selco now trades from 56 branches and remains on course to open at least eleven new branches in the current year.
- Revenue increased from the Click and Collect and Selco Direct on-line services that provide an ongoing opportunity to grow online revenue as customers shopping behaviour continues to evolve and increasingly combines both in-branch and on-line channels.
- Fourth largest and fastest growing general builders merchanting model.
- Selco’s unique self-select retail style model is tailored to service trade and business customers operating in the more resilient residential RMI market, Grafton said.
UK: Buildbase, Plumbase and MacBlair
Buildbase saw improved results in a general merchanting market that saw “significant price increases by suppliers” related to the weakness of sterling exchange rate. Plumbase revenue was lower last year as branches were closed following a strategic review. L-f-l revenue rose 4.9%. NI merchanting business MacBlair saw improved revenue and profit following investment in recent years.
Revenue was up for Grafton’s Ireland Merchanting division, “outperforming a recovering market”. In 2017 H1, revenue rose 21.9% to £193m (2016 H1: £158.3m). Grafton noted a positive economic backdrop and opened three new branches in areas of Dublin that are expected to see increased construction activity over the coming years. Grafton now has 49 branches in the network, including 20 in Dublin.
14-branch Gunters en Meuser was acquired in January this year bringing Grafton’s Dutch business up to 54 branches. It is the market leader in the tools, fixings and ironmongery market, Grafton said. Daily l-f-l revenue rose 4.3% and the Dutch economy continued to perform well, with a recovery in the housing market.
Revenue fell in Q1 but recovered in Q2, Grafton said, with 1.5% l-f-l growth against the backdrop of modest growth in the Belgian economy and housing market.