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Acquisitions Again Boost S.P. Richards Bottom Line

Toner News Mobile › Forums › Toner News Main Forums › Acquisitions Again Boost S.P. Richards Bottom Line

Tonernews.com, April 20, 2017. USA
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    Acquisitions Again Boost  S.P. Richards Bottom Line
    By Andy Braithwaite.

    19 April 2017, Last year’s acquisitions by SP Richards (SPR) have again helped the US office supplies wholesaler to post year-on-year sales growth in the first quarter, but there was a sharp decline in operating margins.
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    Last year’s acquisitions by SP Richards (SPR) have again helped the US office supplies wholesaler to post year-on-year sales growth in the first quarter, but there was a sharp decline in operating margins.

    SPR’s sales in the three months to the end of March were $519 million, a year-on-year increase of 9% following last year’s acquisitions of The Safety Zone and RMC. Excluding acquisitions, however, comparable sales fell 2.5%.

    Margins continue to be under pressure, with operating profit for the quarter falling by 9% to $31.1 million. Year-on-year operating margin was down 120 basis points to 6%.

    Parent company Genuine Parts today announced an acquisition in the automotive parts segment, agreeing to buy $45 million Arizona-based distributor Merle’s.

    During the quarterly earnings conference call, GPC CEO Paul Donahue provided a bit more colour on SPR’s Q1 performance. He said that the underlying sales drop reflected traditional office products declines in the independent dealer channel, while there were sales increases to the wholesaler’s e-tailer, mega channel and facilities, breakroom and safety (FBS) distribution customers.

    FBS – which was the only category to grow during the quarter – now represents 32% of SPR’s total sales, up from 25% 12 months ago, and the goal is for the category to grow to more than 40% of the revenue mix by the end of 2020.

    Donahue confirmed that GPC was streamlining its distribution infrastructure across all four of its divisions and that SPR had taken steps to reduce headcount during the fourth quarter of 2016 and the first quarter this year.

    https://www.opi.net/business/wholesalers/acquisitions-again-boost-spr-top-line/
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    April 20, 2017 at 1:11 PM
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