The
Bathroom Products Market 1998-2004
A major review of the UK Bathroom Market has been published by AMA Research.
The report is informed, comprehensive and up-to-date, and represents an
invaluable aid to sales and marketing professionals involved in the industry.
The report analyses the market size and trends, and the major suppliers
in terms of shares. In addition the key products sectors are also examined
with market size and trends for each sector provided. Distribution channels
are also assessed as part ofthe comprehensive study. Emphasis is given
to both quantitative and qualitative assessments ofmarket developments
with interpretation of relevant data to give support to the trends and
to provide a basis for extrapolating future prospects.
This 119 page report is available now and is priced at £565, highlights
are as follows:
In 2002 the bathroom products market was worth £774m at manufacturer
selling prices. This represents a 5% increase on the previous year, reflecting
a buoyant housing market and high levels of consumer confidence.
In 2000 and 2001, the growth of the bathrooms market was stimulated by
a number of factors in particular higher levels of consumer confidence
and a buoyant housing market. However, during the second half of 2000
the effects of the petrol crisis and the floods constrained growth.
The economic slowdown appeared to subdue business and consumer confidence
during the first half of 2001. However, despite the threat of recession
and the unstable global economic outlook, consumer confidence and spending
remained high, boosted in particular by the high level of growth in the
housing market and low interest rates. One particular area of growth has
been the increasing installation of en suites, downstairs cloakrooms and
utility rooms, particularly in new build.
During 2002, the market remained buoyant fuelled by low interest rates
and high levels of house price inflation. These factors have supported
the growing level ofhome improvements undertaken, with homeowners looking
to add further value to their property. Low interest rates and the high
level of house price inflation have prompted record levels of equity withdrawal.
Product Mix:
Baths and sanitaryware continue to dominate overall sales accounting for
51% ofthe market. However, the accessories and furniture sectors are growing
in significance and account for 37%, while brassware accounts for 9% of
the market and the whirlpool spa sector accounts for 3% .
Baths, Sanitaryware & Brassware
Acrylic baths continue to dominate, followed by steel with cast iron taking
a minor share. Composite materials take a small but increasing share.
In this saturated market the future growth is likely to be from an increasing
number ofniche sectors, such as shaped baths in a variety of styles, shower
baths and 'easy access' baths for the infirm etc. The different features
provide the opportunity to improve the average value of an installation.
However, the bath sector remains under pressure from showers and the growth
of en-suites.
Domestic penetration is high in the sanitaryware sector, though increasing
levels of installation of en suites and cloakrooms have boosted the growth
of this sector. In common with baths, an increasing number of niche sectors
are likely to provide future opportunities for growth. In addition, the
wide range of styles, shapes and materials is giving the sanitaryware
sector a lift, in
terms of motivating additional sales and in terms of stimulating added
value sales.
The brassware market is worth some £138m at manufacturers' prices,
including kitchen brassware, estimated at around 31% of the total. Bath
brassware accounts for a slightly lower share than in previous years at
22% largely due to the growth of the shower sector, while basin brassware
and the small bidet sector account for the balance. The mixer sector has
experienced growth over the last two years and they now account for over
half of all brassware, being particularly strong in kitchen brassware.
The shift towards modern contemporary styles is now well established in
the brassware sector, and the wide range of styles and designs now available
is offering opportunities to add value to sales.
The key suppliers of baths and sanitaryware include ldeal Standard/Armitage
Shanks, Twyford Bathrooms, Jacuzzi, and Shires. Armitage Shanks, Ideal
Standard, Bristan and Pegler are the major companies in the brassware
sector. Imports have also continued to increase over the last two years.
In terms of distribution, the merchants and factors continue to play a
dominant part in the market with around 75-80% of bath and sanitaryware
sales from manufacturers, though the merchant industry has improved their
approach to bathrooms and kitchens with enhanced showrooms and a more
retail-orientated offer.
The DIY sector has grown in recent years as a result of a buoyant house
moving market and the competitive pricing strategy adopted by major outlets
such as Homebase, B&Q and Focus. In addition, the wide range ofproducts
now available through the DIY sector has also supported growth.
Accessories, Furniture and Whirlpools
Accessories, Fumiture and Whirlpools are part of the bathroom products
market but offer very different opportunities and are at very different
stages of development.
Household penetration of accessories is relatively high but they are generally
replaced more frequently than a bathroom suite and the market can be supplemented
with additional purchases. Bathroom fittings (soap dishes, toothbrush
holders etc.) take 31% ofthe market followed by shower accessories with
23%, toilet seats and covers with 15%, scales and mirrors with 11%, heated
towel rails with 15% and bath panels and splash-backs with 5%.
Furniture has also experienced growth in terms of both fitted and unfitted
bathroom furniture. The market size of the free-standing cabinets and
vanity units sector is £30m, the balance of £46m being fitted
furniture, both sectors have shown growth over the last two years.
Whirlpools/Spas have traditionally been viewed as an expensive luxury
but are fast becoming more affordable for the mass market. As awareness
and distribution expands, this market is likely to exhibit significant
growth.
Key suppliers of accessories include Croydex, Bemis, Polypipe (incorporating
Celmac), Samuel Heath, NewTeam, Aqualona, Allibert, Coram and Metlex.
Key furniture suppliers include Cloverleaf, Roper Rhodes, Utopia, Armitage
Shanks, Heritage and Be Modern, who are strong in the fitted furniture
sector.
Distribution of accessories and free-standing furniture is heavily biased
to the DIY multiples, who take over half the retail share, with bathroom
specialists taking around 9-10%. Fitted furniture and whirlpool/spa distribution
is biased to Merchants and Bathroom Speciaiists as neither is yet widely
regarded as DIY products. However, the DIY sector may experience some
growth in the medium term due to the availability of spa products through
this sector, e,g, steam cabins.
The overall market for bathroom products is likely to show modest growth
in 2003, largely due to the overall economic uncertainty and the slow
down in the housing market. This is likely to result in lower levels of
consumer confidence and spending, particularly as a high level of mortgage
equity withdrawal has taken place in recent years in line with the housing
boom.
Furthermore, the high level of household penetration in many market sectors
makes rapid growth unlikely, with these types of mature markets tending
to grow more slowly, with faster growth more likely in niche sectors.
Contact Keith Taylor or Hayley Thornley
Tel: 01242 235724
E-mail mailto:sales@amaresearch.com
Website: http://www.amaresearch.co.uk
Franke
Acquires Distributors in France and Holland
The acquisition of B.L.INOX, its French distributor of Washroom and Sanitary
Systems (WSS), will enable Franke to further expand in the French market
for public and communal WSS products.
Since 1997 the Washroom and Sanitary Equipment business of Franke has
been represented in France by B.L.INOX SARL, a market leader for these
stainless steel products. Through this acquisition, the globally operating
business unit Franke WSS, which was formed in May of last year with the
focus on further expansion in this business activity, will not have to
incur the significant costs required to increase market share internally
and will also avoid any possible rivalry that might have arisen in France.
Over the past years B.L.INOX has developed a very successful sales organisation
which currently employs 11 staff and 12 sales agents and expects sales
of Euro 2.1 million in the financial year 2003. B.L.INOX will be fully
integrated both into the Franke group structure as well as into the business
unit Franke WSS operating division.
The acquisition, with retrospective effect as of 1 May, 2003, of the Dutch
distributor of Franke Coffee Machines, Ko-Ks Benelux B.V. and its subsidiary
LesAmis Dienstverlening B.V. will give a further impetus to the international
development and expansion of an own sales and service organisation far
Franke Coffee Systems.
Since 1995, Franke has been represented in the Netherlands by its distributor
Ko-Ks in the Coffee Machine sector. The acquisition was made to improve
the market presence of the Franke Coffee Systems in the Netherlands, to
further strengthen its global presence and to advance its own sales and
service organisation.
To date, Ko-Ks LesAmis has been a service provider to key accounts in
the coffee machine sector and has also developed a successful customer
service organisation. The company currently employs 22 staff. Consolidated
sales were Euro 3.6 million for the financial year 2002. As 'Franke Koffiesysteemen
B.V.' the new Franke company will be fully integrated into the Franke
Group and the Franke Coffee Systems operating division respectively.
Charles
Banks, Wolseley Chief Exec, Discusses the UK Market and the Group's European
Strategy
Q: UK sales increased by 12.6 per cent this last year, but trading
margins slipped to 7.6 per cent . Have you deliberately been sacrificing
margins for sales growth here?
A:
I think in a couple of our businesses we probably have sacrificed a little
bit to try and maintain the growth that we have been having and to increase
our market share. But also I believe the main difference is the one-off
that we’ve talked about before regarding our distribution centre
investment. And also just, in general, the investment in the future, 153
new branches and the other things that we have been continually putting
money into.
Q: But in the UK I think it’s probably fair to say that
the competition are able to drive higher margins, and the question being
asked is why can’t you?
A: I think the businesses are different. There are similarities,
no question. We are in the same sector and we share many customers, but
at the same time, geographically we’re not in the same place and
the mix of our business is much more varied. We are very strong in the
light side business. We’re also strong in the heavy side. But we
have a presence in commercial industrial which some of our competitors
don’t have. And we continually have made investments in the future
such as millions that we put into our distribution centre that we think
will give us increased market share and improved profitability as we go
forward.
Q: And when you say going forward, can you put a timetable on
when you can actually see the benefits of the new DC kicking in?
A: We think that in the last six months we’ve seen some of
the benefits because our margin in the second half of this year was greater
than the margin the same period last year. We also feel that going forward
into the coming year we will continue to see those benefits. The nice
thing about what we’re doing and creating all these sales and service
centres and the distribution centres, is that it will allow us to really
manage the whole chain from the manufacturer right down to the customer.
And there’s a lot of work to be done in that, but the benefits come
through some every year as we’ve seen in the US, and we’re quite
excited about the impact that will have.
Q: If I could ask you to define the role of the new European
CEO Gerard Legtmann?
A: Primarily his role is to implement the Wolseley strategy in
Europe. And to do that he’s going to have to create a European organisation
in which to manage the company. All the European chief executives will
report into him and he will be looking to really make impact in several
different areas. First of all, we’re expecting him to get more integration
and synergies out of the existing businesses. As he understands those
businesses to find ways of saving money and making those businesses more
efficient. Secondly, we expect him to grow the existing businesses by
putting in new products, new branches, a branch within a branch, things
like that that we haven’t been able to do before. And lastly but
not least, we expect that he will expand the business into new territories
through acquisitions going forward.
Q: You said that Gerard is going to drive the European strategy for
you. What is that European strategy?
A: The European strategy is to continue to expand the businesses
we have into the areas where we’ve been successful in other countries.
If you just take France for instance, we were very successful in the heating
and the plumbing businesses. But if you look at our business in the United
States, if you look at it in Canada, if you look at it in the UK, we have
a much more diverse business than that. Buying PBL gives us another leg
up on that. So what we hope to do is to expand those successful businesses
into the countries and then to move into other countries that we’re
not in today.
Q: You’ve told me there that you opted to scale up in France.
But to what extent did that actually benefit Brossette which still seems
to be struggling in a tough French market? What’s the benefit of
buying a heavy side business to sit in alongside Brossette?
A: First of all I will address that, but I don’t think it’s
quite fair to say that Brossette is struggling. I think the French economy
is struggling, but I don’t think Brossette’s struggling? I think
that they are turning in good performances in a difficult, challenging
market and with all the social and cultural changes it’s made it
even more difficult. They turn in good results. They’re not over
6 per cent trading profit the way they have been in the past, but they’re
not that far below it. Yes, we’d like to see more growth, but overall
I think that, considering the environment, they’re doing alright.
Secondly, as far as the benefits of buying PBM we think that’s the
first benefit we’ve seen is that it’s provided a whole new enthusiasm
to the Brossette management team that we are willing to invest in France,
and that we are going to be a major factor in the construction materials
distribution business. And the excitement has been very pleasing. Secondly,
we think that there will be synergies that we will get, not particularly
in products, because the customer base is different. But there are other
areas where we can share sites. We think that there’s some synergies
and consolidations that can be done in terms of the administration, IT
and those kinds of things. And we think that there will be benefits coming
in working with the UK and even in some cases the United States on supplier
arrangements and possibly even customers.
Q: Has it been frustrating for you that you’ve not been able to make
those changes in Brossette more quickly?
A: We would like to have seen that management team move a bit faster
to be honest. But I think that culturally we need to change the set up
in France using French management that understands the goals, they buy
into the goals which they have and let them deal with the cultural issues
that are there. That’s been one of Wolseley’s great strengths
going back to Jeremy Lancaster and respecting those local issues. And
sometimes you have to work within the environment that you’re dealt.
Q: You're investing additional funds in group infrastructure over the
next financial year. Talk me through the rationale behind this?
A: First of all we've been investing in infrastructure and in the
future in our companies, and to some extent at PLC. We feel that with
the increased size of the company and the ambition that we have to continue
that growth that we need to put in some infrastructure to better manage
the business and the growth that we have to make sure we can deal with
all the governance issues to leverage our size and to take advantage of
synergies that are available out there for us that I think most of our
investors, as well as our customers, expect us to take advantage of.
Q: So when you say infrastructure, what exactly do you mean by that?
A: We’re going to invest primarily in three particular areas.
First of all we will invest in people. We have started our internal audit
group, which we have to continue to hire and to complete that team. We
have to hire and complete the team, or at least get most of it in place,
for the European infrastructure that we wanted to put into place. And
we’re starting a new executive management programme to complement
the one we have in the US at IMD in Switzerland, which starts in November.
There will be others but we’re continuing to invest in things like
that, in people.
We will invest in technology. We have just put in a new consolidation
system at PLC. We’re looking at a number of different areas to apply
technology within the company. We want to do some things with our financials.
We need to put a new platform into OAG and we think that that gives us
a great opportunity to test some new technologies that we will want to
apply to the company.
And last but not least, we want to continue to invest in the supply chain.
We’re very pleased with the result we've had from our distribution
set up in the US. We’re pleased with the progress we've made in the
UK. We think we can do more in that particular area. We’re reorganising
the distribution centres in France. So we want to continue to invest in
that supply chain management and the IT that will drive that.
Q: The obvious question here though is costs, the kind of benefits
you're going to get back out from those costs, and time scale?
A: We've already started and each one of those projects will have
a business case that will go with it, that will identify not only the
cost but the benefits, the timing of the benefits and those sorts of things.
A lot of this, we’re giving people a heads-up that we have been investing.
We’re going to continue to invest. I'm not in a position yet to tell
you exactly what the costs are because until we really have studied it
and we can see how we’re going to bring the benefits forward, it’s
very speculative. I can just tell you that we think all those areas will
require investment. They all have the potential to have a very positive
impact on our performance and that’s the criteria we’ll use
in evaluating the speed and the amount of money we want to put into them.
Q: Infrastructure projects as you’ve just outlined are notoriously
difficult to derive benefit from. So what makes you think you can pull
it off where others, not necessarily in the sector, have failed miserably?
A: I think first of all we've done it to varying scales in some of
the companies. If you look at the Canadian business, particularly if you
look at the business in the Plumbing and Heating in North America and
the US, if you look at some of the changes that we’ve done in Stock
Building with their ERP system. If you look at the way they’ve evolved
their logistics in the UK. We think we've got some fair experience at
that. We also believe that by respecting the various cultures and dealing
within those companies, that we will be able to get the management to
get benefit. I think probably the overriding thing is that we have a lot
of confidence in the management and the management talent in our companies
to continue to drive the business forward and to make the right decisions
and to manage programmes like this as long as we do it in a system, in
a process that makes sense, that can be absorbed. If you try to dump it
on everybody all at one time it can be pretty devastating and I think
that we keep everybody very busy. But we want to make sure that we can
deliver.
Q: You’ve just told me how you're investing for the future in
the business. Perhaps if you could give me a broader view of what you
think is going to be happening in the UK, in Europe and in the United
States – the outlook?
A: I'll start with the UK. We think they’ve had the best economy
of the countries that we've been dealing with for the last several years
and, frankly, in our business anyway, we think that’s going to continue.
We continually see an under-supply of new houses. RMI has been good. Employment
levels appear to be good going forward, certainly for the foreseeable
future. We think interest rates may firm up a bit. But we don’t think
that’s going to be dramatic when you look at the low level they're
at today. We believe that as the government money comes through on the
infrastructure spend that they’ve committed to that we will also
benefit from those spends. So we’re optimistic about the UK economy.
We’re also optimistic about our potential there.
As far as the US is concerned, the whole technology, manufacturing thing’s
a bit uncertain. We see housing continuing to be strong. The demand is
there, the demographics are there, the interest rates are there, the employment
levels are there. We think that residential will continue to be strong
going forward. We think people will continue to invest in their homes
and second homes in the US, at least certainly for the next few years.
And we see an ongoing demand over the next 10 or 20 years of about 1.7m
houses a year and we normally don’t hit that many. So that area looks
good.
As the economy recovers we think interest rates may go up a bit again
but we think commercial will come back. We think that the state governments
and other government investments will increase. So we feel we’ll
also benefit from that with our diversity and the infrastructure that
we have in place.
Continental Europe is a little more difficult. We think that will continue
to be flat, which is why we’re working to change the way we’re
organised and the way we go to market. We want to make sure we've got
the infrastructure in place before we go charging ahead at any great speed.
I think there are systemic issues that a lot of these countries have to
deal with to get their populations to have confidence in the future, about
their jobs, about their pensions, about their retirement and some of those
things have to be dealt with. But at the same time there are a lot of
people in those areas, they have a pretty good standard of living and
we think that provides good opportunities for us to continue to take market
share and to supply those needs.
EU
Firms still Face Problems in Chinese Market
China's
push to implement WTO accession rules has benefited European companies,
but huge obstacles remain, with foreign firms notably in the auto and
construction sectors actually seeing the number of barriers to business
increasing, the European Chamber of Commerce in China said.
'For [some] foreign companies, the business environment in China has become
worse since WTO accession, notably in the auto and construction sectors,'
Jan Borgonjon, vice president of the European Chamber of Commerce, told
reporters at a meeting to discuss the release of the European Business
in China position paper recently.
The report said that European companies still face daunting challenges
as they try to break into and prosper in the Chinese market.
These include increasing amounts of red tape and non-tariff barriers -
notably the inability of the central government to impose its policies
on provincial and local level governments, discrimination in favor of
domestic businesses, a lack of national treatment and a lack of enforcement
of Intellectual Property Rights (IPR).
The report said there was 'disturbing evidence' of China seeking to use
non-tariff barriers to trade and development, and said the country seemed
to be 'testing the framework' of what was acceptable and unacceptable.
Borgonjon denied China was orchestrating a system of non-tariff barriers
but said there was a 'definite emergence' of barriers to trade over the
past year.
Some sectors had actually regressed in China since its WTO accession in
December 2001, he said, notably auto and construction, while banking and
insurance had progressed, but marginally.
New legislation under discussion would require foreign construction firms
to have capital minimums of 300 mln yuan and a positive domestic track
record to set up in China, which would rule out many European construction
firms.
A lack of transparency and a preference for domestic construction firms
had also held back the opening up of the sector, he said. 'With the Three
Gorges project, of the 12 construction projects only four were opened
to tender from foreign firms,' adding that long-term engagements with
Chinese partners were often cancelled once western technology had been
'transferred and understood' by domestic firms.
In the auto sector, European carmakers complain they are constrained by
government regulations that, among other things, limit the number of manufacturing
projects allowed per foreign company.
New laws expected later this year or early next are expected to further
promote domestic firms at the expense of their foreign rivals.
IPR piracy is also a major issue for European businesses. Companies in
most sectors have lost revenue to counterfeiting, but the report picked
out cosmetics, telecommunications, IT, pharmaceuticals and auto components
as sectors most affected by rampant piracy in China.
He said the country had pushed ahead with legislation protecting IPR owners
in the past year, and said there was a 'willingness' within the government
to work on the issue.
But he added there remains a 'lack of control on the ground,' with little
deterrence provided to transgressors.
The report said criminal prosecution should be used against IPR infringers,
with repeat offenders facing 'severe penalties.'
On the upside, Borgonjon said recent revisions to China's export tax rebate
rules were a step in the right direction for European businesses.
European firms source, manufacture and export vast quantities of goods
from China each year, and the rule changes would help speed up payments,
he said.
'The issue of reimbursements is key for exporters,' he said. 'At the moment
it is not unusual for European firms to wait up to two years to receive
tax reimbursements,' he said.
And while issues remain, Sino-European trade is on the upward path, with
both on track to become the other's biggest trade partner. 'Its going
that way, and it won't be too long,' Borgonjon said.
Europe was China's third largest trading partner in 2002 after the US
and Japan, and vice versa, with two-way trade reaching 86.76 bln usd.
Isaac
Lord Joins Forces with Burbidge to Service Kitchen Customers
Ironmongery
and hardware distributor Isaac Lord has joined forces with kitchen components
manufacturer Burbidge, to offer its kitchen fitter and retailer customers
a complete one-stop-shop service. This is a natural next step in the growth
strategy of this family-run ironmongery business for which kitchen fittings,
including handles and hinges, currently account for a significant percentage
of overall sales.
David Warne, Sales Manager for Isaac Lord comments: ‘This move into
distributing kitchen frontals and accessories is in direct response to
significant demand from our many kitchen fitter and retailer customers
who want to be able to purchase everything they need for the kitchen from
one supplier.’
‘We chose Burbidge as our kitchen manufacturer of choice because
we were impressed with the company’s kitchen designs, its extensive
range of components and the high quality of its products, as well as its
marketing support and customer service. It’s also good to work with
a company that has a similar background to us; we’re a family-run
business that was founded in 1892 and Burbidge is also a family-run firm
founded in 1867.’
Ben Burbidge, managing director of Burbidge comments: ‘We’re
delighted to have been chosen by Isaac Lord to supply kitchen frontals
and accessories. It’s a mutually beneficial arrangement as it provides
us with additional representation in the South of the country through
a reputable and well established company.’
To accommodate its expanded product portfolio, Isaac Lord has expanded
into a brand new 22,000 ft purpose built warehouse in High Wycombe, Buckinghamshire.
Isaac Lord:
Email: mailto:sales@isaaclord.co.uk
Tel:
01494 462121
Burbidge:
Tel: 0247667 1600
Web: http://www.burbidge.co.uk
Pilkington
Tiles Increase Sales and Claw Back Losses
The
Board of Pilkington Tiles Group Plc initiated a programme of operational
improvements some eight months ago, which were focussed on the ceramic
business in particular. These are beginning to generate real benefits
and as a result Group sales increased significantly by 11% to £15.3
million in the six months ended 30th September 2003, compared to £13.9
million in the previous corresponding period. There was a significant
increase in sales in each one of the ongoing divisions: on a continuing
operations basis there was a 20% year-on-year increase in Group sales.
Group profitability also improved to restrict the loss before tax to £599,000
compared with a loss before tax of £765,000 in the previous comparable
period. Compared to the immediately preceding six month period (the second
half of the2002/03 year), there was an appreciable improvement in operating
profit. although limited by the cost of implementing the planned sales
initiatives.
Operational Review
Ceramics
It was stated in the Annual Report that rebuilding ceramic sales is the
highest priority and in fact they increased by 18% to £11.7m in
the first half compared to the same period last year. This was largely
the result of an improvement in sales into the multiples sector, reversing
the trend identified in last year's interim statement. Sales of own manufactured
product continued to show some decline in the period as a whole, but volumes
started to increase in the second quarter as initiatives targeted at home
produced product began to take effect.
The integration of products sourced from abroad into both the branded
and own-label portfolios is showing increasing benefit; these overwhelmingly
being products which our UK factories do not have the capability of producing.
Operating profitability showed only a slight improvement as margins were
heid back due to the sales mix and the planned investment required to
stimulate the necessary improvement in sales.
Terrazzo
Turnover in the Terrazzo business increased by 26% to £2.1 million,
compared to the comparable period, due largely to increased supermarket
activity. The operating profit of £0.4 million represents a 63%
increase over the first half of last year. The division has introduced
a number of new products aimed at broadening the market base of the business
and these should contribute to maintaining progress in the second half
of the financial year.
Access
Flooring
This business has increased its turnover significantly over the previous
period to £1.5 million, due primarily to certain large contracts,
although these have also impacted on margins. This has reduced operating
profit to £112,000 compared to £169,000 in the same period
last year. Nevertheless, the business has been successful in continuing
to broaden its range of activities, and we remain confident in the continued
development of this business.
Supply and Fix
As a consequence of the Board's decision last year, this business has
now ceased and, with the exception of collection of outstanding monies,
will undertake no further contracts. The loss in the half of £39,000
is due to the costs of managing the closure of the activity and adjustments
to our expectations of the collectability of debtors.
Employees and Management
We highlighted in the annual report the many challenges confronting our
business and its employees. The first half improvement in trading, in
what continue to be highly competitive and ever changing market sectors,
reflects their skill and commitment.
Balance Sheet
Net debt at 30th September 2003 was £4.8 million compared to £5.2
million at 31st March 2003, and gearing improved to 37.2% from 42.6% at
the financial year end.
We have recently completed a revaluation of all of the Group's land and
buildings assets and this has resulted in a revised existing use valuation
of £5.25 million, an uplift of £1.14 million, which has been
transferred to the revaluation reserve.
Strategy
The Board remains totally committed to the market sector focussed programme
of initiatives outlined in the last Annual Report, and this continues
to guide the operational strategy for the Group.
A number of serious expressions of interest in the assets of the business
are being actively pursued, with the Board balancing issues of timing,
certainty and potential upside to maximise value and to achieve the best
outcome for all stakeholders. The Board will keep shareholders updated
with any further developments, but has also taken the opportunity to revalue
the Poole land in the meantime. In October 2003 the revised valuations
of the land at Poole have given a range of estimated realisation price,
based on a number of alternative assumptions, of between £7.05 million
and £14.30 million, compared to a range based on similar assumptions,
of between £5.17 million and £11.54 million which was announced
in March 2002. Shareholders should refer to this previous announcement
with regard to the terms of the estimated valuations.
New
Consumer Ad Campaign for Stoves & Belling
Glen
Dimplex Cooking is helping to drive sales of its Stoves and Belling brands
with an extensive consumer advertising campaign. Targeting key high circulation
interiors and women’s titles, the campaign will run until March 2004.
With
an audience reach of approximately 63 million people and a total spend
of £650,000 this campaign demonstrates the commitment and support
that Glen Dimplex Cooking gives to retailers by keeping their brands top
of mind throughout the buying process. Stylish full and half page ads
highlight the key built-in, freestanding and range cooker collections.
Stoves Campaign
Positioning Stoves as an aspirational brand, it is targeting affluent
and design conscious foodies via titles such as M&S Magazine, Observer
Food Monthly, Homes & Gardens, BBC Good Food and Waitrose Food Illustrated.
Reflecting top of the range styling and functionality, the ads feature
a hero shot of the 720EMa from the new Premier built-in collection. The
strapline reads ‘Beautiful cookers, cook beautifully’.
Mark Abbott, marketing manager for Glen Dimplex Cooking comments: ‘Our
research has consistently proved that product styling as well as cooking
performance are the key motivators for our target audience. Therefore
we needed an ad that clearly communicated the high quality design as well
as the superior cooking functionality found in all Stoves products.’
Belling Campaign
Reflecting its trusted family heritage, the new Belling campaign includes
three different executions. Each focuses on familiar family scenarios
such as a little girl being presented with a huge chocolate cake after
her first day at school, a young boy tucking into sausages and chips having
just been stood up by his first girlfriend and Mum enjoying a celebratory
meal after her first day in her new job since having the children. Communicating
the range of Belling products available, each creative promotes a different
model and its key features. The ads can be seen in titles such as Family
Circle, Woman & Home, Ideal Home, Essentials, Prima and Daily Mail’s
You Magazine.
Mark Abbott continues: ‘Belling customers are looking for a high
quality, good looking and functional model – a cooker they can rely
on to cater for their everyday cooking requirements, no matter what life
throws at them. It was therefore appropriate to link each product back
to an event or an occasion that our audience can relate to.’
Web: http://www.stoves.co.uk
Web: http://www.bellingappliances.co.uk
New
KBSA Ad Meets with Warm Response!
Members
of the Kitchen Bathroom Bedroom Specialists Association
have warmly welcomed the association’s new advertisement, designed
to reflect the key KBSA messages both to the consumer and to potential
members.
The ad, which features an attractive montage of kitchen, bathroom and
bedroom images and is headlined ‘Creative beautiful interiors’,
replaces the ‘shark’ advertisement which failed to meet with
unanimous approval from association members.
The new advert, which is designed to offer re-assurance to the consumer
and highlight the benefits of choosing a KBSA specialist, is scheduled
to appear in a number of consumer publications from next month onwards.
‘We’re delighted with our new advertisement and feel that it
strikes just the right note in terms of communicating what the KBSA is
all about,’ says KBSA chief executive Graham Hayden.
‘The ‘shark’ ad did have considerable impact but was not
wholeheartedly accepted by our membership so we went back to the drawing
board and have produced a very positive message that will form an important
part of next years marketing activities.’
Tel: 01905 621787
Email: mailto:info@kbsa.co.uk
Web: http://www.kbsa.co.uk
‘Planit
Fusion’ Kitchen Software Enhanced with Appliances from Bauknecht
Planit
International, the industry software provider, has announced the release
of a design function that will allow designers to select real appliances
such as the built in range from Bauknecht, instead of using generic product
images.
The new facility has been developed in association with domestic appliance
manufacturer, Whirlpool UK for the company’s new built-in Bauknecht
range of cooking, refrigeration and laundry appliances, and is available
from October.
‘This new development will enhance the visual impact of the finished
design. Our photo realistic graphics and artistic effects are already
valued by our customers as a superb presentation tool, the new Bauknecht
appliances facility will add that extra final touch and ensure that the
client’s visual leaves a lasting impression.’ says sales director
at Planit, Alastair McPheat.
Peter Steward, product marketing manager Bauknecht adds, ‘We are
delighted to be the first manufacturer to offer this facility to Planit
users. It is a significant development and will truly showcase our Bauknecht
portfolio in the best possible way to a key target audience.’
Planit Fusion, which was launched earlier this year, combines a market
leading computer-aided design package with a comprehensive customer information
management tool, simultaneously offering retailers new design functionality
with back office improvement.
According to Planit MD Patrick Love, Planit Fusion continues to set new
standards for the industry. ‘Utilising the latest technology, we’ve
combined professional design and presentation software with effective
customer information management,’ he says. ‘This latest addition
illustrates our commitment to continually innovate and establish new boundaries
so that Planit Fusion remains a market leader in the industry.’
Planit have led the market worldwide for over 20 years, providing CAD
solutions to the kitchen retail industry. They are the only accredited
Microsoft Solutions Providers in the marketplace, testament to the highest
quality standards of the company’s software engineering, as well
as to the robustness of their systems.
Web: http://www.planit.com
Web: http://www.bauknecht.co.uk
Taylor
Woodrow Taps into Deva for Stylish Living
Housebuilder
Taylor Woodrow has chosen tap specialist, Deva to supply all bathroom
brassware requirements for its prestigious 262-apartment development at
‘Aspect 14’ in Leeds.
Offering
city centre living at its best, Deva captured the housebuilder’s
requirements in terms of quality, designer looks and practicalities by
specifying a contemporary range of basin and bath taps from its ‘Vision’
range and a shower valve and kit from its shower collection.
Commented Bill Prisk of Sub-Contractors, NG Bailey, ‘The quality
and look of the Deva tap and shower products chosen for Aspect 14 perfectly
complements all the apartment styles – innovative, minimal and stylish.’
Chosen to complement each other, the slender design of the Response shower
mirrors the minimalistic style of the Vision basin and bath pillar taps,
co-ordinating well with the apartment interior. In all 83 different apartment
designs, the Deva quality is evident throughout, appearing in all bathrooms
and en-suites.
Bill continued: ‘Home buyers today are looking for quality and unique
design and the bathroom is now regarded by most as the number one room
of the home.
Contemporary city living offers an enviable lifestyle and home hunters
look and pay for attention to detail in fixtures and fittings – and
taps and showers should never be overlooked.
‘The
Deva brassware styles chosen for the Aspect 14 apartments certainly fulfil
this modern look, and combined with their ease of installation and stunning
looks, I am very pleased with the results.’
Featuring a thermostatic control, the Response shower valve and kit offers
adjustable centres for easy fitting and has excellent flow rates, even
under low pressure. A 24" chrome plated metal slide rail comes with
a multi-spray handset and chrome plated soap dish. The sleek Vision taps
are from Deva’s trendy ‘Concepts’ collection – a collection
strong in European statement, aimed at the individual looking for something
different and design-led.
As a major brassware supplier to a wide range of commercial projects throughout
the UK, Deva are able to offer a comprehensive choice of brassware in
all categories.
Tel: 0870 848 8400
Web: http://www.devatap.com
Boere
– Top and Bottom Meet Demand
The
boom in the UK and Irish construction industries has put unprecedented
pressure on suppliers. The joinery sector is no exception. A greater number
of specialist joinery companies than ever before are taking on manufacturing
and supply contracts to the domestic house building market and the commercial
sector alike.
Apart
from the significantly increased quantities, joinery suppliers are under
pressure to supply vastly better quality and conform to much more stringent
regulations than ever before. For example, the production of special doors
for various fire ratings demand special construction and perfect finishing.
Architects require a greater variety of choice in terms of surfaces and
the doors have to be pre-finished to accept the latest coating techniques
be they UV-cured or even the new microwave system. There is also other
impending legislation like the Disabled Access directive from the EU which
means that doorsets have to be wider in many circumstances.
Boere says that all of these demands find a solution with the company’s
wide belt sanding line programs. The Dutch company that started in 1942
specialises exclusively in sanding technology. The company’s machine
programs have been developed along a modular basis that allows them to
accurately specify and install solutions that are based on the customer’s
requirements.
Boere’s Elite sanding lines answer all the questions around increased
production. By combining a top and bottom wide belt sander in-line, single-pass
finishing is achievable. And this solution in working widths from 600mm
to 1300mm or even 1650mm if required.
Depending on the process – calibrating, finishing, lacquer sanding
or fine finishing, or a combination of these – the sanders are fitted
with the appropriate sanding units. Usually both machines would be identically
equipped but if the product has different opposite surfaces this can be
catered for.
By combining a top and bottom wide belt sander in-line significant savings
in labour, time and production costs can be achieved while increasing
capacity and the ability to take on new orders and offer faster lead times.
However, combining a top and bottom sander in-line is not merely a question
of ‘bolting’ two machines together or putting a metre of roller
track between them.
The line has to be carefully integrated in terms of positioning (especially
height) and co-ordinated controls. So a constant working height is achieved
with Boere’s in-line system and frequency controlled drive ensures
synchronised feed speeds on both machines. The control console at the
infeed of the first sander allows the operator to monitor and control
the entire line with immediate adjustments and confirmation via readouts.
This control panel is mounted on a pivoting overhead arm so that the operator
can alter his position and visual aspect of the sanding line. If the sanding
line itself is integrated into a larger, overall finishing line the controls
themselves can be integrated into a centrally operated computer control.
Many joinery shops suffer from lack of space and would normally not even
consider a sanding line. As long as the application is sanding solid wood,
Boere has provided a ‘Compact’ solution by directly coupling
the two machines to each other. However, if veneered panels or other laminated
surfaces are being finished then an interlink conveyor is placed between
the two machines to correct any thickness anomalies that occur in each
machine. This configuration also applies to solid wood.
Boere’s motto is ‘Perfection in Sanding’ and in the UK
leading joinery firms like Komfort Office Systems, STP Joinery and Timack
operate Boere sanding lines.
Tel: 01422 823783
Web: http:// www.boere.com
Investment
in Technology Feeds Success at Trade Mouldings
Trade
Mouldings, the UK and Ireland producer of wrapped vinyl doors, wrapped
mouldings and a range of other components for the fitted furniture industries
claims that its production facilities at the company’s Cookstown
factories in Northern Ireland are arguably the most advanced of their
type in Europe.
‘The Cookstown factory is equipped with state-of-the-art machinery
all integrated and geared to the company’s underlying philosophies
of quality, flexibility, choice and supply.’ says Sales Director
Damien Connolly.
The establishment of three main distribution and supply centres are main
centre at the Cookstown factory itself, a centre in Dublin and the new
purpose-built facility at Rochdale near Manchester. Customers also receive
direct supply from the factory at Cookstown.
Not only do these distribution centres ensure fast, direct service to
customers throughout Britain, Northern Ireland and the Irish Republic,
they also operate trade counters and, consequently, carry large stocks
of the entire Trade Mouldings product catalogue.
Damien Connolly says that the quality and variety of the Trade Mouldings
product is one of the reasons that drives the sales figures upwards: ‘We
operate in a highly competitive market and our products must distinguish
themselves through perceptibly better quality and a wider scope of choice
for our customers. After all they too are striving for success by differentiating
their products. The other essential element to the market penetration
being enjoyed by Trade Mouldings is the high level of service and supply
we offer.
‘These combined aspirations can only be achieved with the guarantee
of a high volume, consistent quality and flexible manufacturing base.
This is why MD Kevin McOscar has, over the years, researched and invested
in the best production equipment and systems.’
Austin McOscar is production director at the Cookstown factory. ‘Our
increasing sales over the years put pressure on all areas of production
and we cannot afford bottlenecks or downtime through technical faults.
We invest in the best and reap the rewards through excellent quality and
a product flow which is high volume while remaining optimally flexible.’
The two distinct areas of the Trade Mouldings factory are the door lines
and the moulding and wrapped components lines.
A
flagship item of modern technology representative of the rest of the factory
is the new Routech Protos six-head CNC router (pictured). Not only does
this huge machine deliver high volumes of profiled MDF door blanks through
fast cycle times, but it also offers a degree of detail that make the
Trade Mouldings designs what they are. The design of the Protos with its
trade mark, three-face ‘Tobelerone’ clamping table and multiple
tool changer ensures the constant flow of door blanks. Essentially while
six MDF panels are being clamped, another six are being routed while the
other six are being off loaded.
This is the second Protos to be installed at Cookstown. The first, a five
head machine, is still in full operation as are a number of other CNC
routers and machining centres with conventional configurations and used
for producing small batch items and ‘specials’.
The result is a constant and flexible flow of precision pressed doors
from raw blank to final product via an automated trimming line. From here
the doors move directly into another automated system a shrink wrapper
which prepares them for direct shipment into stock or delivery to Rochdale,
Dublin or individual customers.
The wrapped mouldings and components lines operate with the same level
of integration – from the beam saws cutting strips or dimensioned
panels through to the moulders and onto the profile wrapping stations
for vinyls or paper foils.
Every Trade Moulding product is produced in this factory to ensure colour,
pattern and quality matching. This is of importance to Trade Mouldings’
customers – the ability to source every conceivable component and
part from one supplier and out of one factory.
Rod Bairstow who runs the Trade Mouldings Rochdale distribution centre
says that it would not be possible to successfully operate this type of
stock holding and supply operation without the type of technical production
facility that is behind them. Not only can the company guarantee supply
of its product range, it can also supply far wider size options and permutations
as demonstrated by the latest range of bedroom products.
The extent of the Trade Mouldings product range is evidenced by the two
new colour brochures recently produced – the 3D Solutions brochures
for both kitchens and bedrooms.
‘We are in the enviable position of offering our customers what they
want, when they want it’ says Rod Bairstow. ‘From Rochdale we
cover the entire British mainland from a distribution point of view and
the success of our Trade Counter has brought a sharp rise in the number
of smaller and bespoke manufacturers buying Trade Mouldings products.’
While Austin McOscar concentrates on the operation of the integrated production
systems in the factory, Damien Connolly and his sales teams have the confidence
of projecting this degree of efficiency further into the market with the
reliable supply of a quality product.
Masco
Corporation Announces Key Management Changes
Masco
Corporation announced on 23rd October the following key management changes:
• John Wills, 50, Group President - Plumbing Products North America
and President of Delta Faucet, headquartered in Indianapolis, will return
to Masco Corporate Headquarters to devote his full time and attention
to strategic and executive management responsibilities in his role as
Group President of Plumbing Products reporting to Masco President Alan
Barry.
• Reinhard Metzger, 57, currently president of Mill's Pride, will
transfer to Indianapolis to assume the position of President of Delta
Faucet with complete oversight responsibility for Delta Faucet reporting
to Wills.
• Thomas Chieffe, 46, President of KraftMaid, has been promoted to
the position of Group Vice President. In his new position, he will assume
reporting responsibility for Mill's Pride in addition to his current management
responsibilities at KraftMaid. He will continue to report to Group President
Ron Ayers.
• Christopher Harley, 43, Vice President of Customer Relations at
KraftMaid, has been promoted to the position of Executive Vice President
of Mill's Pride with General Management responsibility, reporting to Chieffe.
'We are delighted that these exceptional individuals have enthusiastically
accepted their new positions and responsibilities. They are dedicated
leaders who are outstanding examples of the depth of management capability
that exists throughout the organisation,' said Alan Barry, Masco's President
and Chief Operating Officer. 'Their leadership in these key management
positions will be essential to Masco's future success as we strive to
continue to create value for our shareholders.'
Web: http://www.masco.com
Ruth Ann Marshall Appointed American Standard Director
American
Standard Companies Inc.
announced on October 2nd that Ruth Ann Marshall, 49, president of MasterCard
North America, has been elected to the company's board of directors. With
Marshall's election, American Standard's eight-member board now has seven
external directors.
Marshall joined MasterCard International in 1999, and currently leads
MasterCard's largest region, which reported gross dollar volume - the
amount of purchases and cash transactions on a card - of $602 billion
in 2002. Before joining MasterCard, Marshall served as group executive
president of two Electronic Payment Service companies, MAC Regional Network
and Buypass Corporation, a leading third party processor. She also was
executive vice president of Concord EFS, a leading electronic payments
processor. Marshall started her career with IBM, where she held a variety
of managerial and executive positions in her 18 years with the company.
'Ruth Ann Marshall's leadership in consumer- and marketing-driven companies
will further enhance our strong board that has diverse experiences and
perspectives,' said Fred Poses, chairman and CEO of American Standard
Companies. 'We are excited to have her join our board.'
Marshall earned a master's degree in finance and a bachelor's degree in
business administration from Southern Methodist University in Dallas.
American Standard is a global manufacturer with market leading positions
in three businesses: air conditioning systems and services, sold under
the Trane® and American Standard® brands for commercial, institutional
and residential buildings; plumbing products, sold under such brands as
American Standard® and Ideal Standard®; and vehicle control systems,
including electronic braking and air suspension systems, sold under the
WABCO® name to the world's leading manufacturers of heavy-duty trucks,
buses, SUVs and luxury cars. The company employs approximately 60,000
people and has manufacturing operations in 29 countries. American Standard
is included in the S&P 500.
Whirlpool
Corp. Reports 2003 Third-Quarter Results; Cites Strong Sales in North
America and Europe
Whirlpool
Corporation recently announced third-quarter 2003 net earnings of $105
million, or $1.48 per diluted share, compared to $101 million, or $1.46
per diluted share, in the same period last year.
'We believe this earnings performance is solid, given our third-quarter
challenge to overcome approximately $24 million from year-over-year increases
in U.S. pension costs,' said David R. Whitwam, Whirlpool Corporation's
chairman and chief executive officer. 'Our businesses helped drive
this performance with record levels of productivity and significant cost
reductions.'
Third-quarter net sales of $3.1 billion increased 12.8 percent from last
year, reflecting strong revenue growth in North America and Europe. (Excluding
currency translations, sales increased 9 percent.) Operating profit of
$204 million compared to $199 million in the prior year period, which
included $16 million of pre-tax expense for restructuring and related
activities.
Year-to-date sales of $8.8 billion increased 9.3 percent from the prior
year period. (Excluding currency translations, year-to-date sales increased
7 percent.) Operating profit of $588 million compared to $571 million
in the prior year period, which included $54 million of pre-tax expense
for restructuring and related activities. Through September, year-over-year,
increases in U.S. pension costs and the effects of lower Brazilian tax
credits totalled approximately $90 million, which were largely offset
by productivity improvements, cost reductions and savings from previous
restructuring activities. The effects of these significant year-over-year
changes will be mostly behind the company by the end of the fourth quarter.
'Given the cost and marketplace challenges we faced globally, we are pleased
with our performance and with the contributions from our global businesses
and brands,' Whitwam said. 'Innovative new products and services
introduced to consumers through our global distribution network continue
to drive stronger sales for the company and longer-term customer loyalty.'
Third-Quarter Global Highlights
• Whirlpool Corporation formed a global strategic alliance with Fisher
& Paykel Appliances, the New Zealand-based appliance manufacturer
widely known for its innovative technology. The alliance involves a wide
range of cooperative initiatives, including global sourcing of major home
appliances and sharing and co-development of product technology.
• Whirlpool introduced a new washer that brings the benefits of automatic
clothes washing to millions of consumers in emerging markets. The
affordable washer was developed within Whirlpool's global technology and
manufacturing organisations as part of the company's 'Innovation for Everyone'
initiative. The washer is in production at Whirlpool facilities in Brazil
and China, and will be distributed to first-time laundry appliance buyers
worldwide through the company's global distribution network.
• Whirlpool Corporation was ranked 11th among the 'Top 20 Companies
for Leaders' recognised by Chief Executive Magazine in a survey of 300
U.S. companies. The magazine cited Whirlpool for effective leadership
programs, high-potential leadership and senior-level support for developing
and producing quality leaders.
• More than 600 Whirlpool employees participated in a five-day, blitz
build of a Habitat home on the company's Benton Harbor headquarters campus.
The home was later transported to a permanent site nearby. Whirlpool Corporation
is the largest corporate sponsor of Habitat for Humanity International,
a non-profit organisation that builds affordable houses in partnership
with those in need of adequate shelter.
Third-Quarter
Region Review
Whirlpool North America's sales of $2.03 billion increased 12.1 percent
from the prior year period. Significant growth in unit shipments
and revenue during the quarter reflected the continuing consumer demand
for Whirlpool® and KitchenAid® branded products. Operating profit
declined 1.8 percent, due primarily to a $22 million increase in U.S.
pension costs from the prior year period. Improvements in productivity
and cost reductions helped offset the year-over-year increase.
U.S. industry unit shipments of major appliances (T7*) increased 9.3 percent
from the prior year period. Fourth-quarter shipments are expected
to increase by approximately 3 percent. Given the industry performance
in the third quarter, the company now expects full-year shipments to increase
by approximately 3 percent.
Strong consumer demand for Whirlpool brand products, including the Whirlpool®
Duet® washer and dryer pair, continued during the quarter. KitchenAid
brand introduced a full line of KitchenAid® Pro Line™ major kitchen
appliances, including built-in refrigerators and ovens, cooktops, warming
drawers and dishwashers with a professional look and performance. Whirlpool
Canada received the 2003 Energy Star Manufacturer of the Year Award from
Natural Resources Canada for setting new energy efficiency performance
standards for appliances.
Whirlpool Europe's sales of $704 million increased 18.7 percent from the
prior year period. (Excluding currency translations, sales increased
approximately 5 percent.) Operating profit improved 40 percent from the
prior year on higher sales and unit volumes, as well as record levels
of productivity and savings from previous restructuring activities.
Continuing strong consumer demand for the innovative Whirlpool® Dreamspace™
clothes washer, the Whirlpool® Conquest™ side-by-side refrigerator
and the Whirlpool® Mini-BI microwave oven helped drive positive operating
performance.
During the quarter, appliance industry unit shipments increased slightly
from the prior year period. Based on current economic conditions,
the company now expects full-year industry shipments to grow approximately
2-to-3 percent from last year's level.
Outlook
'We expect that our focus on global innovation and distribution will help
drive continued improvement in the company's performance throughout the
remainder of the year,' Whitwam said. 'In addition, our ongoing emphasis
on productivity and cost reduction is expected to help offset the remaining
pension and tax headwinds from 2002.'
He added: 'However, the steep economic challenges in Brazil have been
worse than we anticipated. Despite current signs of improvement, we now
believe that the full-year contributions from our Latin America business
will fall short of our expectations. As a result, we currently project
that full year earnings performance will be closer to the lower end of
our previous 2003 guidance of $5.90 to $6.10 per share.'
*T7 refers to the following household appliance categories: washers, dryers, refrigerators, freezers, dishwashers, ranges and compactors.