MKM Building Supplies (MKM) has published its full year results for the year ended 30 September 2024.
MKM saw revenue grow during the year to £986 million (2023: £927 million), on the back of expanding the number of branches, via greenfield sites and acquisition. However company profits in 2024 were down to £77 million from £88 million in 2023. The reports attributes this to market conditions during the period and the greater proportion of immature branches, which require time to bed down and become established.
In spite of this, the company was able to maintain its gross margin during 2024, despite pricing pressure, as competitors reacted to slower market conditions. In its view, this is explained by the quality of its customer service, its levels of product availability, as well as its competitive buying, and local expertise and branch autonomy.
Product price deflation was a feature throughout the year although moderating in the last quarter.
The company opened 11 new branches during the year, bringing the total number to 132. This comes on the back of 18 additions during 2023, 12 additions during 2022, and 18 additions in 2021. Of these new premises, two came from the acquisition of Oceanair, a specialist distributor of heating, ventilation & air conditioning products, including air source heat pumps, and a third, that of a local bathroom provider, was purchased to enter a market area.
The hire business saw three additional instore openings, bringing the number of branches with this offer to 17, while the acquisition of Tradeshake allows MKM to now offer legal contracting services to its customers.
Headcount increased, in-line with branch expansion, allowing the company to retain key talent and
maintain service levels. The business estimates that "is well positioned to benefit from any improvement in the building materials market, having maintained sufficient capacity to support growth, while maintaining high levels of service".
The report welcomes "initial positive signs of improvements in the market" and states that the business is encouraged by the constructive narrative from the government and indications that consumer spending on discretionary items more generally is beginning to improve.
It concludes by describing itself as "cautiously optimistic about the year ahead, underpinned by the strength of its offer, customer service and green shoots in the market".
Kate Tinsley, CEO of M.K.M Building Supplies, commented: “MKM had a strong 2024, significantly outperforming the sector and growing revenues, despite a tough market. We added 11 new branches and kept our focus on great customer service and product availability.
"The market seems to be stabilising with lower interest rates and better consumer spending, leading to more property transactions and mortgage approvals. We're in a good position to benefit from these positive trends and are excited about the year ahead”.
