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Wolseley reports 7.5% rise in Q3 LFL sales

Wolseley sign

Plumb Center owner Wolseley posted a better-than-expected surge in sales in a further sign of the UK's buoyant housing market.

The building suppliers firm said group like-for-like sales lifted 7.5% in its third quarter to the end of April as it outperformed the market in all its key regions during the period.

The firm, which also owns Parts Center, Pipe Center and Drain Center in the UK, added that group sales jumped 12.4% to £3.3 billion and its trading profit lifted by a fifth to £195 million.

It forecast like-for-like sales growth over the next six months will be around 6% and added that it expected its trading profit will be in line with full-year forecasts.

Chief executive Ian Meakins said: "Like-for-like revenue growth continued to be good and we outperformed the market in all key regions.

"Gross margins were ahead as we continued to focus on improving the mix of customers, suppliers and products."

In the UK, Wolseley said like-for-like sales lifted 7.6%, with good growth generated by its plumbing, heating and pipe businesses.

But it added that gross margins were lower at its plumbing and heating outlets due to challenging market conditions.

In the UK, it saw trading profit lift 8.3% to £26 million.

In the firm's largest market, the US, it said like-for-like sales lifted 8.3% as its range of businesses grew strongly. US trading profit jumped 35% to £164 million.

The group said it completed three smaller acquisitions during the period, which have annualised revenues of £69 million.

It also added that over the period exchange rates were favourable and boosted trading profits by £11 million.

Wolseley shares lifted more than 2% after the update.

Brenda Kelly, head analyst at London Capital Group, said the quarterly figures also give another indication of the strength of the UK property market.

"Wolseley offers an accurate meter on the health of the UK housing and construction market with strong demand for its UK plumbing supplies driving a 12.4% rise in group quarterly revenue," she said.

Barclays analyst Paul Checketts added: "Wolseley's trading profit in the third quarter was easily better than our expectations due to strong like-for-like growth, good margins and some one-off benefits."

The bank expects Wolseley's annual pre-tax income to lift 12.6% to £816 million.

Source : Express & Star

03 June 2015

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