Heating and Ventilating

There is good growth in revenue and profit and high quality earnings in relatively resilient end markets, says the BSS Group, referring to its interim results for the six months ended September 30, 2008.
The Leicester-based distributor to specialist trades says the group's revenue increased by 9.9% to £685.9m up from (£624.1m in 2007) and believes it is equipped to respond well to the opportunities offered by a recessionary market.

The group's gross margin increased to 23.0% (2007: 22.4%) and profit before tax has risen by 11.4% to £29.3m, up from £26.3m in 2007.

The group's focus on the repair and maintenance market has underpinned its trading resilience.

It reports it has experienced six consecutive months of Like for Like revenue growth achieved in the half and its organic growth initiatives have resulted in robust performance from all of its three divisions: domestic, industrial and specialist.

The industrial (+7.6% LFL growth) and domestic (+2.2% LFL growth) divisions have outperformed the market and grown market share.

22 new branches opened year to date and are continuing to achieve good returns.

The group says PTS growth initiatives more than offset the impact of residential new build contraction.

Direct sourcing and procurement initiatives are also boosting gross margin. The group has ensured costs are tightly controlled to reduce second half costs in preparation for a recession.

Gavin Slark, group chief executive, said:'The group has performed well in challenging trading conditions with good growth in revenue and profitability. Growth initiatives and a focus on serving repairs and maintenance markets have offset the impact of a weaker construction sector. New build residential is less than 2% of group revenue. The group continues to generate positive cash flow and has a strong financial position'.

He said 'Despite a deteriorating economic outlook, we believe that we can continue to make progress in the second half. The group is positioned to respond to the opportunities that a recessionary market offers.'

The BSS Group turns over in excess of £1.2 billion and operates through 370 trading branches, employing more than 5,200 people.