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Wolseley reports sales increase of 2.1%

Wolseley, which operates Plumb Center in the UK and Ferguson in the US, said that growth in North American had compensated for a slide in continental European sales.

In the UK, revenue was in line with last year. "Demand remained weak in the heating market and this was reflected in slightly lower gross margins. Headcount was 148 lower than in July and operating expenses were lower as we continued to focus on operating efficiency," Wolseley said.

Trading profit was £24m, £1 m ahead of last year.

After the end of the accounting period, Wolseley agreed to acquire the property, stock and vehicle assets of 22 sites from Burdens. This is held separately pending approval by the Office of Fair Trading.

First-quarter like-for-like revenues at Wolseley’s Nordics division fell 4.8% year-on-year to £532m, while French sales down 8.2% to £250m. In response to the economic downturn, Wolseley sold off a number of businesses to reduce its debt – which has been cut from £523m a year ago to £87m at the end of October – and concentrate on its core markets.

Over the past two years, Wolseley has sold off Brossette, the French plumbing and heating distribution chain, Build Center, the UK builders’ trade business, and British high street bathroom retailer Bathstore.

In July, Wolseley put its remaining French operations – building materials group Réseau Pro and wood importer Panofrance – up for sale, but has yet to find a buyer.

“Wolseley has continued to generate good growth in the US and Canada, though revenue has declined in continental Europe as a result of continuing tough market conditions, particularly in the Nordics and France, and unfavourable currency movements,” said the national merchant's chief executive, Ian Meakins.

“In the current macro-economic environment, we are working hard to protect gross margins and to drive further operating efficiencies.”

During the three months to October 31, Wolseley reported revenues down 9% year-on-year to £3.3bn due to its disposals, although declines in commodity prices including copper, plastic and steel helped maintain margins at 27.2%.

Trading profit for the period rose 7.6% to £198m, buoyed by a 23% increase from the US that offset an 11% decline from Europe. Wolseley shares fell 1% to £28.42 in early trading.

Source : Builders’ Merchants News

04 December 2012
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