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BSS Group reports Robust Sales Performance
12th February 2010
The BSS Group plc which includes PTS Plumbing Trade Supplies - one of the UK's largest resellers of oil heating equipment - has reported a slight increase in sales for the 19 week period ending 10 February 2010.
As the Group had previously anticipated, market conditions remained challenging throughout the period, but revenue held up well with total revenue for the period in line with BSS expectations at £473.4m and 0.9% above last year on an equivalent working day basis. Like for like revenue, excluding the impact of new branches and acquisitions, was 2.1% below last year - against a 6.8% like for like reduction in the six months to 30 September 2009.
Colder weather conditions during December benefited the Group's Domestic Division, as repair and maintenance activity increased with boiler usage. Snow disruption in January caused BSS some loss of business, primarily domestic contract work, but the adverse impact was offset by a better performance in December.
As expected, BSS's gross margin percentage declined, reflecting competitive market conditions and stronger contract sales. Costs at the Group continue to be tightly managed. Like for like costs in the period were 5.2% below last year - against a 7.8% decrease, in the six month period to 30 September 2009.
Looking to the future, BSS anticipates that government capital expenditure, which will represent around 10% of Group revenue in the current financial year, will reduce significantly in the coming years as public sector cuts take their toll. BSS claims to be pursuing new revenue streams to offset the expected reduction in public sector activity, beyond the current financial year.
The company also claims that it remains well positioned to take advantage of early recovery in economic activity as the UK exits the recession, with growth expected in the new build residential and the manufacturing sectors. However, BSS's core business continues to be the repair and maintenance of existing facilities with a significant proportion of revenue from medium to long term contracts. The business therefore expects revenue for the balance of the year to continue to demonstrate resilience.
The Group's financial position remains strong with net debt to EBITDA at 30 September 1.4 times and interest cover 9.7 times. Gearing at 30 September 2009 was 36%, a reduction from 44% in 2008: 44% and unutilised borrowing facilities amounted to some £114m.
The company expects profits to be in line with market expectations for the year ended 31 March 2010 and also forecasts that the financial position of the Group to strengthen in the current financial year.
