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Wolseley Plc: Interim Management Statement for Q3

Wolseley PLC has this morning released an interim management statement for Q3, ending 30th April 2012.

Highlights of the release have been included below, while the full release can be found in our Industry Articles section (

Third quarter highlights (ongoing businesses)

• Revenue increased by 4.7% and like-for-like growth was 3.8%.
• Gross margin of 27.7% held at last year’s level.
• Operating costs were 3.6% higher than last year.
• Trading profit of £139 million, 10.3% ahead of last year.
• Net debt of £277 million, £314 million better than 30 April 2011.
• Completed previously announced sale of Brossette and sold Bathstore for £15 million.
• Two small bolt-on acquisitions completed in the third quarter in US and Denmark.

During the quarter the Group generated revenue of £3,069 million, 4.7% ahead of last year and 3.8% ahead on a like-for-like basis. The impact of inflation on Group revenue was approximately 2%. The gross margin of 27.7% was unchanged, despite a continuing tough pricing environment. We have grown market share in key regions and continue to implement initiatives to hold or improve margins. Operating costs were 3.6% higher than last year including increases in employee share scheme expenses of £4 million and £2 million of oneoff restructuring charges. Headcount continues to be tightly controlled, particularly where markets are deteriorating. In light of tough markets in Europe, as noted at the half year, the Group may incur further restructuring charges in the fourth quarter though these are unlikely
to be material in the context of the Group’s full year results. Trading profit of £139 million was £13 million or 10.3% higher than last year. The trading margin improved to 4.5% (2011: 4.3%). The number of trading days in the period was the same as last year.

Commenting on the trading outlook, Ian Meakins, Chief Executive said:

“Wolseley has continued to make decent progress in the third quarter, with good growth in
the USA and Canada partly offset by Europe. We held our gross margin overall and
controlled costs to generate 10 per cent trading profit growth in the ongoing business. We
will continue to pursue operating efficiencies and remain focused on customer service,
gaining market share and protecting our gross margins. Given the uncertain economic
outlook in Europe we will remain vigilant on the cost base while continuing to drive growth
initiatives in the more robust markets.”

Source : Wolseley

29 May 2012
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