Independent builders merchants buying group NMBS turned over £545m in 2008, a slight drop of 2.5%, reported chairman Rod Bennion at the organisation’s AGM last week.
Bennion described the performance as “creditable…in a declining marketplace”, although it was also “clearly substantially below budget”.
“With the rollover of good order books from 2007 most of our members had a good first six months to the year but the second half saw some dramatic falls particularly those merchants tied to housebuilders. This has continued into 2009 and members have adjusted their cost bases and stock levels to suit the lower levels of demand.”
Bennion told the AGM that the management team had initiated a major review of all operating procedures early in 2008 and reduced costs throughout the year, culminating in a redundancy programme to reduce staff numbers by 25%.
“2009 will see the full benefit of these reductions but we have been very careful not to affect the quality of service to members. This has been achieved by greater use of new technology and further development of the NMBS On-line Report Centre and a concentrated effort to drive improvements in performance management,” he said.
“NMBS makes a pledge to honour the debts of its members to suppliers in the event that the members cannot meet their financial commitments. As part of that commitment we insure all our supplier invoices using Credit Insurance and actively manage each individual member’s spend via designated credit limits.”
Bennion reported that, thanks to an “excellent relationship with our credit insurer”, NMBS have managed to maintain the majority of members’ credit limits unchanged. “The strength of members’ balance sheets and the credit control procedures we have in place are key factors.”
He continued: “In meeting the demands of these challenging times and continuing to serve the needs of our members we are determined to strengthen our core activities whilst minimising our costs and maximising the value we offer all our members.
“These clear competitive benefits attracted some 70 new members to the Society in 2008 and we now have a total membership of 648 members at the year end.
“I believe 2009 will continue to be another difficult year for our merchanting sector but we at NMBS are totally committed to play our part in securing the profitable future of all our members.”