UK merchant sector Top 20 – 2018 calendar year

UK merchant sector Top 20 – 2018 calendar year

As published in our February 2019 edition, PBM takes a look at the details behind the performance of the UK merchant sector’s largest businesses during 2018 (based on turnover figures*), highlighting some of the major headlines and underlying themes.

*** Click here to complete your entry for the next ‘Top 20’ countdown, in PBM’s Feb 2020 edition ***

In the final analysis, 2018 may well be viewed as something of a milestone year for the merchant sector. In an uncertain climate, the sector once again broadly defied expectations with continued stories of investment and expansion against a backdrop of robust sales arguably against the odds.

The year’s BMBI data highlighted this trend throughout the year, however the comments we collated in compiling this year’s ‘Top 20’ listing were tempered by a cautious eye on events still to come. The knock-on effects of Brexit are clearly a concern, with fears of rising prices for (imported) materials and the consequence of any negative impact on the broader economy leading many to cite a focus on mitigating credit exposure.

More positively, branch improvement programmes continue at many of our leading players with a great number also referencing investment in profit participation schemes and wide-ranging training for their staff. A continued focus on maximising online revenue streams was also a central theme.

The headline news has undoubtedly been Huws Gray’s purchase of Ridgeons. The businesses were matched in PBM’s countdown last year (sharing sixth place and a reported turnover of £180m each), and this ‘transformational acquisition’ was supported by Huws Gray’s private equity partner, Inflexion Private Equity.

Private finance investment in merchant firms is in itself a growing trend, with perhaps the second most notable transaction being Parker Building Supplies’ acquisition by Cairngorm Capital Partners in early 2018. Cairngorm continues its interest in the sector, and we expect to see more activity along these lines as the year progresses.

Head of our list once again is Travis Perkins plc, and the Northampton-based business was responsible for perhaps the other major merchant news story of 2018. We’ll come to that shortly, but we most clearly state that we have once again elected to exclude data pertaining to the Group’s Consumer Division (encompassing Wickes, Tile Giant and ToolStation) to enable our league table to compare ‘likefor-like’ as much as possible. We will review this ahead of next year’s list, depending on events…

In its Capital Markets Update presented in December 2018, TP outlined its intention to continue “winning share in a flat market” and also emphasising its plans for “enhancing our local proposition by further empowering our people”. Similarly, it plans to “simplify the Group” to streamline its cost base and focus on its trade customers.

Accordingly, “options are being considered” for its Wickes business stream, but plans are also being made to “divest the Plumbing and Heating Division following successful transformation”. We shall keep a watchful eye on what happens next.

Moving down the list, Grafton’s figures are boosted by the continued expansion of Selco and the acquisition of the Leyland Specialist Decorators’ Centres chain in February 2018. MKM added a further seven branches last year and indicates plans for 15-20 more in 2019, keeping it ahead of the Ridgeons-charged Huws Gray.

EH Smith added a new branch in central Birmingham, whilst Bradfords’ counts its acquisition of Crockers and Landmark Building Supplies. It also purchased Penznace-based Solo Building Supplies in August. The Haldane Shiells Group has fully segmented out its bathroom showroom offering under the Bathline brand, whilst our Top 10 is completed by the inclusion of Builder Depot.

We are extremely grateful for the support the sector shows us in helping us to compile this industry barometer.


Source: Figures are compiled via forecasted information supplied by each company, latest published account data and PBM estimates. Every effort is made to ensure the data presented is accurate but PBM cannot be held liable for any errors or omissions.

Published in PBM February 2019 and detailing he full calendar year of 2018

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