SUMMARY OF REPORT CONTENTS

The UK market for door and window fittings has experienced particularly difficult conditions in 2005/06Within our definition, the market for door and window fittings is estimated at £537m in 2006, having experienced two years of decline. Although overall market growth levels disguise variations in performance between product sectors, conditions have been difficult in most market sectors, with most product areas now flat or in decline.

Market decline has been due to a number of key reasons, though perhaps the most important factors have been the downturn in the replacement window market in recent years and the growth of low-cost imports from Far East sources which have eroded price levels. In addition, several related markets have been affected negatively, including the replacement door sector and the conservatory market. Although the commercial market sector has performed strongly in 2005/2006, this sector has been affected by a switch to electronic security products, affecting sales of mechanical locking solutions.

Nevertheless, the commercial sector has boosted the door and window hardware market in general, with demand being particularly strong in the health, education, retail and office construction and refurbishment sectors, which has seen renewed growth over the last few years. Newbuild housing has also performed more strongly, though the rapidly increasing number of flats being built has impacted on the average number of windows in new dwellings and on the specification of window and door fittings.

The door and window fittings market is very fragmented in terms of product range, with major sectors including locks, handles, hinges, door closers, ventilators, tilt `n' turn gearing, emergency exit hardware, signs/letterplates, chains and other ancillary products. Locks represents the largest product sector, followed by handles, with each accounting for nearly a third of the hardware market by value. Multi-point locking systems are now virtually standard on most PVC-u, aluminium and composite doors and windows and, as a result, multi-point locks are now estimated to account for around 45% of the lock sector, in terms of value.

Door closers and hinges are also significant product sectors and are estimated to account for around 10% each of the market, in value terms. The door closer and panic exit device markets have been motivated by growth in the commercial sectors, whilst most other markets have been relatively flat.

A key factor that has affected the majority of product sectors has been the growth in own brand and imported products, with manufacturers in low-cost countries increasing their market shares in low price segments of the market. Over the last 2-3 years, this has been particularly significant in the handles, hinges and other fittings sectors, with friction hinges also affected but to a lesser extent. The lock sector has also been less affected by low cost imports due to higher levels of brand awareness and the fact that products are more complex in this sector. In general, however, UK suppliers have responded to growing margin erosion by continuing to move their manufacturing operations abroad.

A key driver for growth in recent years have been legislation and standards – for example, the DDA continuing to have an impact in the handles and hinges sectors in particular. However, margins in this sector have been under severe pressure for a number of years, due to significant levels of price competition, the growth in low cost imports and recently also substantial rises in raw material prices, which in many cases have been difficult to pass down the supply chain. As a result, many companies have diversified into, or invested in, higher growth and margin markets such as electronic security and overseas hardware markets.

Although the market remains fragmented overall, a number of acquisitions have taken place in recent years, and there has been a continuing trend towards consolidation in many sectors of the market. In addition, companies which previously had focused on one or two products are now increasingly diversifying their ranges in order to increase opportunities for cross-selling. Significant acquisitions during 2005/2006 have included; Assa Abloy’s acquisition of Adams Rite, Heywood Williams’ acquisition of Carlisle Brass Group, Basta Parsons acquiring Lister Locks, and Laird Group acquiring Balance UK, all in 2006, and Paddock Fabrications’ acquisition of Millenco Hardware in 2005.

Assa Abloy is the clear market leader in the locks sector, followed by Laird Group and Ingersoll Rand Security Technologies.  However, more specialist operations such as Lowe & Fletcher and Paddock Fabrications have grown in recent years, both organically and through acquisition and are thought to have increased their market share. The retail market for handles is dominated by own brand products imported from India and the Far East, while leading suppliers in the commercial and fabricator markets include Ingersoll Rand, Hoppe, Paddock, Carlisle Brass, Laird, Basta Parsons, Maco, Roto and Hewi. The leading UK suppliers of hinges are Nico, Laird, Basta Parsons and Royde & Tucker, with Securistyle and Cotswold leading in window friction hinges.

Distributors continue to have an important role, and the leading distributor groups include Heywood Williams (Mila, Windoware, Carlisle Brass) and Avocet, both of which have significant market shares of the overall hardware market, together with Assa Abloy, Laird Group and Ingersoll Rand.

In overall terms, the distribution of door and window fittings is divided between four major sectors.  Door & Window Fabricators/Systems Companies account for the largest share estimated at around 32%, with Builders Merchants/Joinery Centres accounting for around 16%. DIY Multiples account for around 22% of the market, though their share of the locks and handles sector is higher.  Architectural Ironmongers account for an estimated 17% of the market, though their share is heavily dependent on conditions in the commercial sector. The fastest growing sector in the last 2-3 years has been the trade catalogue/internet sector, with handles in particular extensively available through specialist mail order operations.

Despite the recent decline in the door and window hardware market, prospects for 2007-2010 indicate some growth, although estimates remain cautious, at around 1% per annum. Factors expected to contribute to growth include rising levels of newbuild housing and a strong commercial construction market where demand should be driven by large scale construction programmes such as the £40+ billion Building Schools for the Future and construction programmes in support of the Olympics. Price increases in the market are expected across all product sectors to reflect material costs, although competition levels will remain exceptionally high. Demand for window and door fittings in the domestic replacement market is expected to continue to fall.

Companies covered in the report include:

Adams Rite, Assa Abloy, Ingersoll Rand, CISA spA, Paddock Fabrications, Millenco Hardware, Lister Locks, Basta Parsons, Lowe & Fletcher, Laird Group, Heywood Williams, Mila, Windoware, Avocet, Wagner, Groupco, Unitec, Yale, Union, Assa, Chubb, Mul-T-Lock,  Laird Security Systems (LSS), Laird Security Hardware, ERA Products, Briton, Legge, M. Marcus, Kaba, Dorma, Carlisle Brass Group, Walsall Locks, Guardian, Henderson, Maco, Fuhr, Siegenia-Aubi, Winkhaus, Roto, GU, Kenrick, Cotswold, Securistyle, Trojan Hardware, Nico Manufacturing, Cooke Brothers, Geze, Eurolink Hardware, Prashant Enterprises, Urfic, Valli & Valli, Olivari, Hoppe, Hewi, AS Hardware, MacKinnon & Bailey, James Gibbons Format, Brassart, Turnstyle Designs, Winlock, Royde & Tucker, Simonswerk, SFS Intec, HAPS, Spilka, Grorud, Peder Nielsen, Jebron Samuel Heath & Sons, Perko, Arrow Architectural, D & E Architectural Hardware, NHN, Groom, Allgood Hardware, Reilor, Titon Hardware, Greenwood Air Management, Simon Air Management Systems, Building Product Design, Renson, Duco, Glazpart, Banham, Bramah, Burg Wachter, Abus, Squire, Masterlock, Siegenia-Aubi, Winkhaus, Henderson, Hillaldam Coburn, Caldwell Hardware, Strand Hardware, Balance UK, Fred Duncombe, Jackson, Laidlaw, CISA UK Plc, Eurospec Architectural Hardware, Eurolite, Sterling Hardware, DGS (Double Glazing Supplies) Group, Carl F Petersen, Cotswold Architectural Products, Rehau, LB Plastics, Synseal, Eurocell, Deceuninck, Epwin Group, Veka, B&Q, Homebase, Wickes, Focus, Wolseley, Travis Perkins, Saint Gobain, Grafton, BSS, Jewson, George Boyd, Lloyd Worral, Yannedis, Allgood Plc, John Planck, Mica Hardware, Decco, Stax, E Aldridge, Timpson Locksmiths, Timpson Group, Able Locks, Able Group,  Keytek, Screwfix, Tesco Direct.