K&B Distributor Market: Debt Surges in Difficult Times

Research for a new report on the Kitchen and Bathroom Distributors market has found that the industry is set to experience tougher trading conditions in 2008/9, despite signs that the market should continue to experience positive performance in terms of overall sales turnover.

The industry has experienced positive levels of asset growth in recent years and this has continued in 2007/8 according to specialist publisher, MTW Research. However, the report also identifies that a substantial proportion of this asset growth may have been heavily subsidised by rising levels of borrowing by the industry. In 2007, the combined assets of the Kitchen and Bathroom Distributors grew by around 4%, whilst borrowing rose by 5%.

Whilst rising levels of debt taken on by the distributors may present pessimistic reading, MTW also point to the fact that industry liabilities remain at a relatively comfortable 30% of total turnover. However, this ratio has continued to climb from 24% in 2004 and is forecast to reach around 34% by 2012, highlighting the likelihood of a more difficult trading environment, particularly against a backdrop of static profit levels.

The research also found that whilst positive growth in turnover since 2004 is likely to have sustained a degree of optimism in the market, this has in part been at the expense of profit margins. MTW’s 100+ page review of the industry indicates that profitability is likely to remain static in the longer term and potentially decline in 2008/9, reflecting the current economic climate.

The in-depth report goes on to find that an ‘average’ distributor’s turnover has risen by around 7% since 2004, reflecting growth at, or slightly below, inflationary levels in recent years. Forecasts for turnover, profitability, asset and debts are provided by MTW to 2012, with a number of reasons for the industry to be reasonably cheerful in the longer term, though the report also highlights a clear need for caution in terms of borrowing.

Alongside both the industry overview and ‘average’ distributor illustrations, MTW also provide a useful financial profile for the kitchen and bathroom distributors, each with a key performance indicator chart enabling the reader to quickly gauge a competitor’s or customer’s recent performance in the market. In addition, the report also includes full mailing address details and senior decision maker contact details for manufacturers wishing to increase their sales through these companies.

This unique and insightful report is priced from GBP 375 and can be purchased exclusively from MTW Research by calling 08456 524324 or by ordering online MTW Research’s website, where a free sample is available to download, alongside further details on this and other markets in the building and construction industry.

Web: http://www.marketresearchreports.co.uk