The
Freefoam Roofline Report
The Freefoam Roofline Report says that roofline sales
are up on the previous year as more installers join the market.
Sales
A net* 20% of roofline stockists and installers reported a drop in sales
in November 2007 to January 2008 compared with August to October 2007.
However, year-on-year a net 14% of stockists and installers sold more
roofline in November 2007 to January 2008 compared with the same three
months of last year (chart 1).
* The net balance is the difference between the percentage of companies
reporting an increase over those reporting a decrease.
Sales
forecasts
Stockists and installers are positive in their outlook with a net 50%
expecting sales to improve in February to April compared with the previous
three months. This is similar among firms of all sizes and in all regions.
Similarly, a balance of 42% of stockists and installers expect to sell
more in February to April compared with the same time last year (chart
2). Mid-sized firms (56%) and those in the North (59%) are most upbeat
about forecasts.
‘Roofline
has become a very competitive market. As a stockist we've noticed a significant
shift from just specialist roofline installers to many general builders
buying roofline products to install. Also it's not just the installers
that are facing greater competition. We've noticed more merchants in our
area adding roofline to their range as a result of businesses diversifying
into that area.
‘With regards to product trends, we've recognised a move towards
woodgrains, especially mahogany and black. Customers are definitely more
aware of the wider range of colours and choice now available to offer
homeowners, and it seems colours are proving popular with the end user
too!’ Mr N Johnstone, Director Armstrong Building Supplies, Cumbria
Profits
A net 41% of companies forecast better profits in the next 12 months compared
with the last 12 months (chart 3). Strong profit expectations are mirrored
across the board.
Buying
Prices
A net 73% of stockists and installers reported an increase in material
costs compared with three months ago (chart 4). This is similar among
firms of all sizes. Companies in the South (net 83%) were more affected
by rising costs than those in the Midlands or North (68%).
Selling Prices
A net 41% of roofline companies put up prices compared with three months
ago (chart 4). Small and mid-sized firms (net 45%) were more active at
raising prices than large companies (25%). More stockists and installers
in the Midlands (55%) increased prices than those in the South or North
(35%).
A
balance of 58% of stockists and installers expect to put up their prices
over the next 12 months compared with the previous 12 months. Expectations
are strongest among mid-sized firms (74%), those in the Midlands (68%)
and specialist stockists (69%).
Prospects
A net 14% of firms interviewed are more optimistic now about the overall
prospects for the roofline market than three months ago. ‘There's
plenty of scope for roofline installations in our area, but homeowners
often wait until something goes wrong before they look at replacing their
fascias and soffits. Therefore it's important to try and raise the awareness
of replacement roofline and in particular, about the benefits of PVC-UE
roofline.
‘Also it's important homeowners realise that installing PVC-UE roofline
is a skill so they need to ensure they employ a professional installer
to carry out the work. There has been a problem in our area with cowboys
doing shoddy work and then we have to come in to put it right. In my view,
industry bodies need to take a more active role in vetting roofline contractors
and the quality of their work to stop this from happening.’
Mr R Woodhams, Director
J R Roofing (Hitchin) Ltd, Herts
Problems
Price cutting in the market, margin squeeze (56%) and supplier price rises
(53%) were the three main problems for stockists and installers in November
2007 to January 2008.
However, supplier price rises was the single biggest problem, mentioned
by 16% of those interviewed.
Overview
‘The final quarter of 2007 and the start of 2008 have been turbulent,’
says Neil Parsonson of Rigby Research, which produced this report. ‘The
mounting scale of US subprime losses hit the availability of credit and
consumer confidence. A coordinated $110bn dollar injection by the world's
banks and favourable inter-bank loans from the European Central Bank made
little impact. Oil hit a record $99 a barrel on 21 November and Opec nations
moved to boost output, helped by Iraqi oil production returning to pre-war
levels. We have yet to see the longer term effect of two US interest rate
cuts within a week, one of which was the single biggest reduction in 25
years.
‘In the UK interest rates were again cut in February to 5.25% to
ease pressures on the economy. However we are yet to see if all mortgage
providers will pass on the savings to homeowners and new buyers. Confidence
in the housing market has weakened and mortgage lending in November 2007
was 40% below the same month in 2006. January saw the third consecutive
monthly fall in house prices.
‘There is increasing talk of a US recession, but talk of a UK recession
is premature. Latest employment figures show record numbers in work. Cheaper
credit will tempt back consumers, while those who have shelved a house
move may be persuaded to refurbish and improve their home instead. Consumers
prepared to spend are out there and still spending freely.’
Comment
‘Finding ways to differentiate yourself from the competition is becoming
increasingly important,’ says Tony Walsh, Managing Director of Freefoam,
who sponsor this survey. ‘In the current climate homeowners have
become more cautious with their disposable income. They will spend with
those who add value, are credible and know their product, and with those
who can clearly communicate the benefits of what they are selling. Stockists
and installers with good selling and marketing skills and superior customer
service will find themselves doing better than others.
‘The internet is a key marketing and selling tool, and I believe
stockists and installers could make more of it to boost their business.
It has increasingly become a first point of reference for searching for
the right products and suppliers. But it's not just about being online.
Good websites give customers a 'call to action' by making it easy to buy,
by helping browsers move from choice to purchase.
‘Customers want convenience and the internet is a great way to provide
it. The internet allows customers to compare products and services, have
choices explained to them, get all the technical information they need
and allows easy communication. A sleek, easy to navigate website is one
of the most effective ways a company can differentiate itself, particularly
in markets increasingly led by price. The idea that the internet is for
consumers rather than the trade is outdated. It works for both.
‘Making the whole buying process easy for customers gives them another
reason to choose you. The best performers and fastest growers are already
doing this.’
The Freefoam Roofline Report, a quarterly trends survey, is produced by
Rigby Research (a division of Michael Rigby Associates), and sponsored
by Freefoam Plastics Ltd.
The survey covers a representative sample of 100 roofline installers and
stockists (including builders' merchants) of PVC-UE cellular foam products.
Telephone interviews took place between the 1st to 8th February 2008 across
a balanced spread of size of firm and geographical area.
For survey details or a copy of the full report call: Stephanie Bradfield
on 01453 521 621 or visit http://www.rigby-research.co.uk
