MKM to open new branches as profits take off

Revenue at the Hull-based group rose by 18 per cent in the 12 months to September 2015, reaching £252m, up from £213m in the same period of the previous year.

EBITDA and operating profit climbed further, both rising 27 per cent to £17.1m and £15.9m respectively, in a trading year described by MKM executive chairman David Kilburn as “excellent”.

Mark Smith, financial director, said the firm hoped to achieve a similar performance this year, and MKM also plans to add to its 42 branches.

Mr Smith said any planned openings were likely to be weighted to the back end of this calendar year. He said that MKM never reveals where it plans to open branches. The company already employs around 1,000 staff.

Mr Kilburn, who is also the joint-founder of the company, said: “MKM’s unique business model, in which branch directors take a profit share proportionate to the performance of their branch, underpinned our strong performance.

“During the recession, the business model enabled us to outperform the market and as trading conditions have improved, that effect has been enhanced.

“The branch directors’ stake in the business is real and brings tangible benefits to all. It has huge, positive implications for the company as a whole.”

Mr Kilburn added that MKM Building Supplies’ strong cash position had been achieved through cost gains, sensible margin control and good working capital management, all of which enabled the company to invest in hiring staff to improve customer service, and to extend the product range.

He said: “Many of our branches now have kitchen and bathroom showrooms complete with design experts.

“We source these products from high quality manufacturers allowing customers to experience a bespoke design service in a professional showroom environment. We are helping our customers to buy everything they need under one roof and we see significant opportunities for growth by extending other product areas in the same way.”

Mr Kilburn added: “Market conditions are improving with increased activity among house builders and construction companies as well as a strong RMI (repairs, maintenance and improvement) market.

“This gives MKM the confidence to roll out an ambitious expansion plan over the coming years. We have major plans to open new branches across the UK over the next five years.

“Trading remained strong in the first quarter of our financial year and there is nothing to suggest that won’t continue.

“Our plan, therefore, remains focused on the strategy that has delivered our success to date – controlled yet significant organic growth year-on-year by incentivising our branch directors, extending our product range, opening new branches and investing in our digital agenda.”