Adapting to market changes.
BSS revenue remains resilient
Published: 25 September, 2009
LEICESTER: Trading conditions continue to be challenging for the BSS Group, but revenue has remained resilient against the background of a highly competitive market environment.
Total revenue for the 25-week period ended 19 September 2009 was £608.7m, 3.9% down on last year on an equivalent trading day basis, a like-for-like decrease of 6.9%.
Relative to last year, the Group's domestic division's revenue continued to outperform the market and the seasonal lift in the industrial division's repair and maintenance business during July/August occurred as expected, albeit marginally later than last year.
The specialist division – which serves the maintenance, repair and overhaul market and includes power tools, hand tools, personal protective equipment, janitorial product and general industrial supplies – has had a tough half, with contraction in manufacturing and construction activity adversely affecting trade. Gross margin percentage for the half-year will be lower than last year, reflecting stronger contract sales, increased promotional activity and the benefits of inflation last year on steel and copper.
The Group has adapted well to market challenges by scaling down resource and re-deploying where appropriate, while still investing in growth initiatives. Costs for the period are in excess of 8% down on the prior year on a like-for-like basis. Headcount has been reduced by a further 170 people (3.5%) in the period and exceptional redundancy costs will be just over £1.0m for the half.
The Group stated that it "remains well positioned to meet the challenges of a changing marketplace". The board anticipated that the financial year 2009-2010 will be "a year of weaker demand", but that it will "continue to grow market share and achieve further improvements in productivity and efficiency that will help protect current year earnings".
The Group's announcement of its interim results for the six months ending 30 September 2009 will be on Tuesday 24 November 2009.