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The Specialist Division serves the maintenance, repair and overhaul market which is estimated to be worth in excess of £3bn. The market includes power tools, hand tools, personal protective equipment, janitorial product and general industrial supplies. Buck & Hickman sells to end user industrial customers and Birchwood Price Tools sells predominantly to trade customers.

Buck & Hickman has made considerable progress in its second full year of Group ownership despite like for like revenue being 3.8% down on last year, better gross margin, cost savings and further operating efficiencies resulted in profit increasing by 25%.

There has been significant change in the B & H business as the second stage in the recovery plan was successfully completed with replacement of the trading, operating and financial systems in December 2008. This investment was essential and provides B & H with branch based customer facing systems that are geared to supporting a network of local branches with MRO product.

B & H sales proposition supports large end user customers with their general maintenance and overhaul procurement requirements and is geared to meet their needs in a ‘cost down’ environment. B & H continues to have an attractive offer and sales have remained stable despite a number of customers cutting back production activity.

B & H has commenced the third stage of the recovery plan, which is focused on growth. The wider economic environment is now more challenging than two years ago but significant market opportunities remain. We are targeting recruitment of new customers and new sectors, including construction.

The trade counter offer has been developed with the introduction of ‘Tooltastic’ which allows B & H to take its service levels and product range into the trade and construction markets. The Tooltastic brand is also supported by its own website www.tooltastic.com. 28 trade counters have now been launched under the Tooltastic banner.

A number of major contracts were successfully renegotiated during the course of the year with B & H securing three year agreements which provide continuity and opportunity into the medium term for in excess of 30% of sales.

Price Tools and Birchwood Products were merged on 1 April 2009 to form Birchwood Price Tools (BPT). The new company is focussed on the wholesale market distributing power tools, hand tools and site equipment in the UK. The integration creates a powerful product proposition through the combination of leading manufacturer and proprietary brands. The new product offer, taken to market via a comprehensive catalogue and the national sales force, represents a considerable cross-selling opportunity.

Trading conditions in 2008 for Birchwood Products and Price Tools have been difficult as whilst there is a healthy spread of sales to a variety of sectors some have been adversely affected by the economic slowdown. The outlook for 2009 will be more challenging but the new business is well positioned post integration with a lower cost base, and an exciting product development plan.

The IT systems have been merged and the business has been restructured with the Nottingham site now the head office and main distribution centre. The Birmingham trade counter has been developed into a major branch to further support local independent dealers.

Market Drivers

• 1. Well Positioned in Market

  Maintenance, repair and overhaul (‘MRO’) market worth over £3bn
  The market includes power tools, hand tools, personal protective equipment, cutting tools, abrasives and general industrial supplies. The efficiencies achieved put the Division in position to drive advantage. Sectors that have continued investment programmes such as rail will be focused on. With the financial security provided by the Group, ‘Flight to Safety’ will be a positive consequence of a changing economy that needs to be confident in their medium to long term partner

• 2. Re-establishment of Trade Counters

  The branch network has been re-established with 28 trade counters re-opened. The trade counter proposition has been developed with the introduction of ‘Tooltastic’ in order to take service level and product range into the trade and construction markets

• 3. Direct Low Cost Sourcing

  The Specialist Division has a well established procurement function that is unlocking considerable ‘new’ value for the Group

* operating profit prior to amortisation of intangibles £1.5m (2008: £0.4m) and redundancy costs £0.1m (2008: £1.2m)

Head Office: Fleet House, Lee Circle, Leicester LE1 3QQ
T: 0116 262 3232 F: 0116 253 1343 E: reception@bssgroup.com