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Merchant performance gap widens

A study into the profitability of the UK’s largest Plumbers’ Merchants has revealed a widening gap between firms making outstanding profits and those losing money.

The latest Plimsoll Analysis found average profit margins have fallen to 5.3 per cent of sales and 159 of UK’s top 488 Plumbers’ Merchants are now running at a loss. However, the same study has revealed 39 businesses are making record profits.

Plimsoll senior analyst David Pattison said: “Sometimes the public perception of profit is wrong.

“It’s seen as companies taking advantage of their position or exploiting their commercial advantages unfairly.

“But these successful companies should be proud of their achievements. In an industry not known for its successes, these businesses should act as benchmarks to the rest of the industry showing what can be achieved.”

Key findings from the analysis:

The 39 rich companies:

  • The average profit margin at these companies is 12.41 per cent – way above the industry average
  • 27 of these firms are operating completely debt free
  • Average sales per employee figures are £ £202,200

The 159 poor companies:

  • 60 companies are now considered to be a high financial risk
  • 99 this is the second year in a row of making a loss
  • On average these companies are losing 3 per cent on sales – for every £1 of sales it is costing them £1.03 to deliver

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