Plumbing and heating merchants BSS Group saw revenue fall 5.1% and pre-tax profits fall 23% in the six months to September 30. However sales of renewables were 170% up.
Group revenue was £650.6m, down from £685.9m, profit before tax was £23.3m, compared with 2008’s £30.4m and margins fell in the domestic division, which includes PTS, the industrial division and the specialist division, reflecting tougher trading conditions across the board.
However, the group’s statement reports that the second quarter saw a stronger trading performance and that October and November appear to be trading in line with expectations so far. Revenue from the newly formed renewable division grew by 170% to £7.4m from £2.8m last year.
Sales in the Domestic Division fell by £3.8m (1%) to £430.5m (2008: £434.3m), with like for like revenue down 4.3%. Profit fell by £4.8m (27%) to £13.3m with operating margin down from 4.2% to 3.1%.
The Industrial Division’s revenue was down by £19.8m (10%) in the half to £168.9m (2008: £188.7m), like for like revenue was down 9.1%. Much of this was down to price deflation and lower volumes on copper and steel. The division’s profit fell by £1.9m (11%) to £14.7m in the first half, with operating margin at 8.7% (2008: 8.8%).
The Specialist Division contributed £0.9m of profit against £1.9m in the first half of last year.
Gavin Slark, group chief executive, said: “BSS has shown considerable resilience in the first half of the financial year: trading profitably and generating strong cash flow despite a background of the most challenging market conditions for many years and a recession in the broader economy.
“October and November are important months for the Group reflecting the seasonality of sales in the Domestic Division. Trading performance to date for these two months has been in line with our expectations. The Board remains confident that the Group will continue to make progress in the second half of the financial year by outperforming the market. We expect revenue and earnings to be lower than last year and have planned on this basis. We are focusing on margin recovery and achieving further productivity and efficiency improvements.
“The Company continues to keep close to its customers and the market place; new growth opportunities are being pursued. The Group remains well positioned to take advantage of any economic recovery when it comes”.