Unimer transactions down but share grows

Builders merchant cooperative and clearing house Unimer processed transactions worth £739m in the year to April 2009, down 13.6% on the previous year according to results released to the AGM this week.

However, managing director Howard Grant said that the performance “stands good comparison in a sector that has seen the heavyside players recording much greater downturns in business”.

“The 12 month period ending April 2009 was witness to an unprecedented downturn in the construction sector,” Grant continued.

“The downturn was started and exacerbated further by the deep rooted international banking crisis. As a consequence, Unimer faced its most challenging trading period in living memory. Each way we turned there were bad news and negative business trends. However, the Unimer team battled through to produce a very commendable set of results given the adverse trading environment throughout the year.”

The reduced throughput also reflected in a declining gross margin, which was further enhanced by the decline in interest earned. The last year has also been the worst ever year for Unimer in respect of business failures amongst the Unimer membership (and its supplier base). “Unimer of course continues to guarantee payment to its suppliers, which is underpinned by comprehensive credit insurance cover, the value of which was very clearly demonstrated to the Unimer suppliers throughout the year.”

Grant highlighted the number of key actions that Unimer has taken over the year to reflect the continuing challenging trading conditions.

“Over the year the total staff numbers have been reduced by 20%. This is partly volume related, but also reflects the significant growth in EDI and electronic transactions generally and the uptake in the use of the Unimer On-line system.

“The above numbers reduction includes not only administration staff but also a complete overhaul and restructure of the sales function. A more focussed and targeted approach to the sales activities can already be seen to be generating positive results.

“Board numbers have been reduced and the frequency of other internal meetings has been reduced.

“We have completed a full review of all of the Unimer publications, adopting a strong brand image throughout, making them more user friendly and reducing costs.

“All of the above have been concluded prior to year end 2008/9 and will fully impact in 2009/10.

“Despite the difficult markets, we have continued to take action to grow our market share. Our supply base continues to grow, giving our membership an increasing choice of top brands and of some more unique product offers. Our membership has also grown over the last year and has not been offset by losses to group acquisitions, as in previous years.

The Unimer team at Rustington continues to perform exceedingly well, maintaining their drive for high customer service levels and efficiency driven process improvements.

Howard Grant concludes: “The outlook remains challenging with most forecasters now agreeing that we may have reached the bottom of the downturn, but that sector activity will not increase over the remainder of 2009 and any upturn will not really be visible until the spring of 2010.

We will continue to add value for both our merchant membership and our supply base and we look forward positively to 2010, a year which will mark the 75th anniversary of Unimer.”