Gavin Slark: impressive results.
BSS holds on to profit
Published: 27 May, 2009
LEICESTER: "We expect the continuing recession will impact on our core markets in 2009-10, as funding becomes tighter in both the public and private sectors,” said BSS Group chairman Peter Warry,
announcing the company’s preliminary results to 31 March 2009. BSS, he said, can envision economic recovery in 2010.
Chief executive Gavin Slark said the company was set to outperform its competition in current year.
BSS Group Plc posted steady results for the full year, despite a challenging market as it cut costs, gained market share and held on to its margins.
"We still believe that in the current year, we will outperform the market and outperform most of our competitor groups, but it is just a question really of what the impact on the market is going to be,” said Mr Slark.
For the year ended March 31, pre-tax profit was £57.8m, compared with £58.3m last year, while revenue rose 4% to £1.34bn.
Mr Slark said BSS Group’s gross margin improved to 22.9% of revenue vs 22.5% a year ago, on better commercial terms, direct sourcing and selective price improvement.
It saved £12m through cost-cut measures, which included the reduction of 300 jobs, or 6% of its workforce, during the year.
The company said its focus on repair and maintenance market continued to underpin trading resilience.
According to a Citigroup market analyst, this is a "pretty impressive result, given the underlying difficult trading conditions".
"On the back of this solid performance and the robust balance sheet, the stock looks too cheap compared with its peers," commented another analyst.
However, the group remains focused on the UK and remains exposed to the slowing housing and other construction markets, he said. But, its relatively large exposure to the replacement parts market insulates the business to a certain degree, he added.