Growing media firm's sales bolstered by acquisitions and good weather but ceo raises concerns over targets for peat reduction.
Sales at William Sinclair were up 19% to £26.1m for the six months ended March 2011. Pre-tax profit also saw a significant increase, climbing 246% to £647,000 for the six-month period, helped by improved operating margins and a lower cost base.

New acquisitions contributed to top line growth, accounting for £1.5m of William Sinclair's turnover for the six months. Ceo Bernard Burns expects this figure to rise to £4m by the time the firm publishes its end-year results. The Growing Success and aggregates brands acquired from Monro Horticulture last year have helped William Sinclair extend its offer with garden-safe chemicals, pest control and decorative aggregates.

The firm has also grown its market share with its core products, despite what Mr Burns describes as "a bit of turbulence in the market", with the demise of wholesaler Sarum and DIY chain Focus. "The selling season has been a good one. We've grown market share and have taken business from other people."

When asked how William Sinclair has managed to do this, Mr Burns explained: "We are particularly strong in peat free and there is an awful lot of pressure on retailers to increase their peat-free offer. We're also based in the UK and, when the sun shines, you need to get the stock out - we're very good at filling those 'just in time' orders."

The chain has also benefited from people having to re-stock their gardens after a harsh winter, although, the dry start to the season this year has seen a poor performance in lawncare, which makes up a small part of William Sinclair's business.

Mr Burns told DIY week that "the edge had been taken off" the results slightly by an increase in fuel prices and packaging costs but that the figures are "where we want them to be", adding, "we are doing very well". As a result, William Sinclair has increased its dividend from 1.5p to 1.8p per share.

Another issue affecting the company is the white paper on the Government's peat policy, which is due out on June 7. As a consultee on the proposals, William Sinclair has submitted its suggestion that targets for peat reduction will not be met unless a legislative process is introduced.

"When peat replacement first became an issue in the 90s, a voluntary agreement was entered into by manufacturers, suppliers and retailers. This has actually been very successful and all the easy wins have now been achieved but unfortunately there aren't enough replacement products around. There are about three million cubic metres of peat being harvested. There aren't enough surplus replacement materials to match that."

However Mr Burns does not anticipate the introduction of a new legislation next week and instead expects, "more of what we've already got" and the likelihood that targets will not be met.
"Let's not beat about the bush - we would be the main beneficiary of a peat legislation," explains Mr Burns referring to the strong position of William Sinclair's peat-free brand New Horizon in the market. "But I also think it would increase jobs in the UK and the market, as a whole, would grow... As long as we're given enough time - five years or preferably 10, we would prosper - the whole market would."