Double digit growth for £280m building supplier
MKM Building Supplies, the Hull-based construction supplier, has seen double digit growth in revenues and pre-tax profits.
Revenues rose £284.3m for the year to September 2016, up from £251.2m the year before – a 13.2% rise.
Pre-tax profits increased 51% for the year, to £15.8m.
It said this was down to favourable market conditions in the construction sector as well as its business model, in which brand directors own an equity stake in their branch.
New branches opened in Galashiels, Sharston, and Crewe, with MKM now operating 47 branches located across the UK.
Post the financial year end, MKM signed a binding agreement with 3i Group, LDC and Bain Capital Private Equity for the sale of 3i and LDC’s stakes in MKM to Bain Capital.
Management have retained a significant shareholding in the business.
David Kilburn, executive chairman of MKM, (pictured above) said: “We are pleased to announce another strong full-year financial performance, delivering 13% revenue growth over the period to over £284m, as well as growth in EBITDA and profit before tax.
“Our strong performance was driven by factors including a resilient RMI market against the backdrop of Brexit, together with product range extensions, including the roll-out of kitchen and bathroom showrooms across many of our branches, sensible margin control and good working capital management.
“We continue to benefit from our unique business model, which sees Branch Director’s take an equity stake in their branch and a share of profits. This allows us to attract, retain and incentivise the best talent, both financially and through autonomy, which plays out in levels of customer service.”
He did warn that inflation may reduce expectations for growth in the builders’ merchant market and that some cost pressures had been felt in MKM’s supply chain, but this was mitigated by its UK supplier base.
