MKM Going for Growth

MKM is one of the leading independent builders’ merchants in the UK. We spoke to Paul Pennick, timber product manager at MKM about its recent expansion plans and how the merchant sector is responding to an uncertain market.

With the doors of the first branch opening in Hull in 1995, MKM now operates 98 branches across England, Scotland and Wales and operate as a community focused company with branches operating as stand-alone businesses serving their customers in the ways they see fit. “Because of this structure,” says Paul. “MKM finds that we can offer the personalised service of an independent with the buying power and resources of a larger organisation, helping us to provide and supply a wide range of products across the building industry.”

The most recent expansion for the business was via the acquisition of Woodrow Timber and Supplies, a leading supplier of timber, sheet and joinery products, which completed earlier this year. It was an important step forward for MKM and added three new branches to the MKM network. “Additionally, our ongoing new branches programme has seen us open new MKM branches in Bolton and Aldershot, both of which opened their doors earlier this year,” says Paul. “The timber sector accounts for around 25% of the value turnover of our business. This has increased from 21% over the last few years for various reasons, including increased demand and acquisitions, alongside wider, macro-level changes across the wider industry.”

The overall performance of timber across MKM is evenly distributed throughout branches. However, branches that have a higher level of expertise do generate a higher value of sales. “Scotland does perform particularly well for this market when compared to the rest of the UK especially in construction grade products,” adds Paul. “This is accounted for by a higher demand for construction grade timber, due to varying home construction practices. Over 80% of houses in Scotland would be timber frame. A much a higher percentage than elsewhere in the UK.”

MKM has gone through a number of acquisitions recently and has ambitious growth plans to double in size across the next three-to-five years. “This is a nationwide programme that mostly encompasses green and brownfield sites,” says Paul. “The past 12 months has seen us open a significant number of branches nationwide, and we’re continuing to purse that strategy across 2022, with plans to open our milestone 100th branch later this year.

“We have recently completed several business acquisitions that have helped us continue to improve our products and service offering to tradespeople and homeowners across the UK. When making decisions regarding acquisition, we are looking for businesses that can add real value to the MKM group, be it through staff expertise or strategic locations, and, ultimately, help us further sharpen that offering to customers.

“However, we believe acquisitions are a reciprocal relationship, and we strive to ensure we are adding something new and beneficial for the acquired business’s existing customer base. Take, for example, our recent acquisition of Woodrow Timber & Supplies in Scotland. Historically, Woodrow was predominantly a timber merchant, so, via partnership with MKM, they will be able to expand their offering by adding construction, heating and plumbing supplies to their portfolio in due course. In turn, MKM has benefited from the in-depth product knowledge and local relationships the team at Woodrow have nurtured with tradespeople across central Scotland.”

With these exciting expansion plans in place amid an uncertain economic climate, how does MKM see the merchant sector developing over the next 18 months? “As ever, I think the primary watchword for the merchant sector across the next 18 months should be ‘adaptability’,” says Paul. “It is important for the sector to be keeping a close eye on market trends and challenges to ensure it can be agile in its response. If the past two years have taught us anything, it’s that market conditions can change dramatically overnight – so it pays to prepare.

“I think it’s safe to say that there isn’t an overwhelming air of confidence around the market at the moment, with things like the cost-of-living crisis nurturing caution and reticence to spend. However, the construction sector is huge and there are still significant opportunities to be had, particularly when it comes to housebuilders and major infrastructure works. Diversification really is key. More broadly, I think there are real pockets of opportunity for the merchant sector. Among homeowners, those who do have money to spend on home improvement projects will still spend it – whether it’s on extensions and renovations inside the house, or landscaping and decking work outside.”

You can read the full feature in the Summer Timber Trader UK magazine 

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