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Wolseley reports 8.8% increase in first-half profit

British plumbing supplies group Wolseley is looking to buy more businesses in its core markets of the United States, Britain and Canada, the company said on Tuesday after posting an 8.8 percent rise in first-half trading profit.

Chief Executive Ian Meakins said the firm was aiming to lift market share with so-called "bolt-on" deals to boost its existing business, and expected to close about half of the 300 million pounds ($495 million) of transactions it had under consideration.

"The acquisition pipeline is looking a bit more interesting again," Meakins told Reuters.

"We have a pipeline of around 300 million pounds over the coming period. We expect to convert around half of that, so there are four or five deals in there that are interesting," he added.

Acquisitions contributed 2 million pounds to Wolseley's trading profit last year and 0.8 percent to revenue growth.

The company, which operates the Plumb Center and Ferguson chains in the United States and Britain, reported trading profit of 360 million pounds for its ongoing business in the six months to January 31 on revenue of 6.52 billion pounds.

Pretax profit was 316 million pounds, up from a restated 193 million for the same period last year, lifted by stronger trading in the United States, Britain and the Nordic region which offset more challenging conditions in continental Europe.

"Overall we have continued to make decent progress. The good performance in the U.S. continues, the UK has certainly got better, the Nordics has returned to growth but the rest of Europe is still pretty tough," said Meakins.

Revenue in the U.S. market, which accounts for 53 percent of the total, was up 6.2 percent on the year before. Revenue was up 3.2 percent in the UK and 2.6 percent in continental Europe.

Wolseley raised its interim dividend to 27.5 pence per share, 25 percent higher than last year. It shares were up 1.2 percent at 0855 GMT.

"Wolseley's numbers are in line with expectations if not a tad ahead ... The 8.8 percent increase in trading profit is welcome progress," said Whitman Howard analyst Stephen Rawlinson.

Source : Li-Mei Hoang - Reuters

25 March 2014
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