25 September 2009

The BSS Group plc

Pre-close Trading Update

The BSS Group plc ('the Group'), a market leading distributor to specialist trades, issues a trading update today for the half year ending 30 September 2009, upon entering its close period.

Trading conditions continue to be challenging but revenue has remained resilient against the background of a highly competitive market environment. Total revenue for the 25 week period ended 19 September 2009 was £608.7m, 3.9% down on last year on an equivalent trading day basis, a like for like ('LFL') decrease of 6.9%.

Relative to last year, Domestic Division's revenue continues to outperform the market and the seasonal lift in the Industrial Division's repair and maintenance business during July / August occurred as expected, albeit marginally later than last year.  The Specialist Division has had a tough half with contraction in manufacturing and construction activity adversely affecting trade.

Gross margin percentage for the half year will be lower than last year reflecting stronger contract sales, increased promotional activity and the benefits of inflation last year on steel and copper.

The Group has adapted well to market challenges by scaling down resource and re-deploying where appropriate; whilst still investing in growth initiatives. Costs for the period are in excess of 8% down on the prior year on a like for like basis.  LFL headcount has been reduced by a further 170 people (3.5%) in the period and exceptional redundancy costs will be just over £1.0m for the half.

Outlook and Financial Position

The BSS Group remains well positioned to meet the challenges of a changing market place. The Group continues to show encouraging revenue resilience in its markets and is actively pursuing new growth opportunities to offset the expected impact of contracting public sector activity beyond the current financial year.

The Board continues to anticipate that financial year 2009/10 will be a year of weaker demand, that the Group will continue to grow market share and achieve further improvements in productivity and efficiency that will help protect current year earnings.

The Group's financial position remains strong, net debt to EBITDA at 31 March 2009 was 1.2 times and the Group anticipates being cash positive in financial year 2009/10. Its unutilised borrowing facilities as at 31 March 2009 were £110m. These facilities have maturity beyond March 2012.

The Group's announcement of its interim results for the six months ending 30 September 2009 will be on Tuesday 24 November 2009.

For further enquiries please contact:

The BSS Group plc  

Gavin Slark, Group Chief Executive  

T: 07799 438 900   

Roddy Murray, Group Finance Director  

T: 07831 232 410

Hogarth Partnership Ltd
Andrew Jaques

Rachel Hirst

T: 0207 357 9477

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