Jim Blanthorne Managing Director of Keylite Roof Windows is BMBI’s Expert for Roof Windows.
Anyone who hoped the challenges facing our sector would disappear during Q2 will have been disappointed. Throughout our industry, we continued to see strong demand with exceptional raw material supply issues.
Sales performance in the quarter was consistently high, ahead of last year for obvious reasons but also well ahead of forecast, driven by strong demand from new build and RMI. The clock was ticking on UK Government stimulus of the property market, prompting property transactions at their highest level since the 2008 financial crisis and extraordinary demand on the construction product sector. Early in the quarter, the Republic of Ireland ended the lockdown of all but essential construction activity allowing a welcome recovery in volumes from this market.
The healthy sales volume put yet more pressure on an already strained supply chain. The roof window category has a relatively long supply chain and exposure to a truly global marketplace. This brought challenges including Covid capacity reductions, shipping delays and commodities in high demand, such as timber and electronic chips, which were diverted to whichever market was willing to pay the highest price. None of the broad range of materials used in the manufacture of roof windows have been immune to supply disruption this year. Meanwhile, the substantial material cost inflation we referenced last quarter gathered pace putting an unsustainable squeeze on margins. Unfortunately, with supplier Summer shutdowns looming and consumer confidence remaining high, normality looks unlikely in the near term.
So, we hear of supply issues including product allocations and extended lead times. Here at Keylite, our operations and supply chain teams work incredibly hard to keep new stock arriving, using our relative agility to largely shelter customers from these measures. We continue with our ‘invest in stock’ strategy for raw materials and finished goods. This has enabled us to weather the disruption and continue growing. The significant investments we made in factory capacity in recent years have proved invaluable in reducing reaction time while also automating processes to ensure the highest levels of safety and quality.
We will continue investing in both stock and manufacturing capacity to support our customers in advance of what we expect to be a strong second half.