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Wolseley's UK LFL sales down 3.5% in Q3

Building, heating and plumbing supplies group Wolseley has seen an increase in both revenue and trading profit.

In an interim management statement for the third quarter to April 30, the Leamington Spa firm revealed that during the quarter it generated revenue in the on-going businesses of £3,048m, 6.0% ahead of last year at constant exchange rates and 5.1% ahead on a like-for-like basis.

Trading profit for the on-going businesses of £155m was 0.6% higher than last year, 9.1% higher at constant exchange rates.

On a year-on-year basis net debt has increased from £694m to £914m. There was a £90m cash out-flow for acquisitions in the quarter.

The US is the group’s largest market in revenue terms with revenue of £1.7bn recorded in the quarter compared to £451m in the UK.

During the quarter in the US Wolseley acquired Factory Direct Appliances, a small appliance showroom business with annualised revenue of £36m and Waterworks Industries, a water meter business with annualised revenue of £5m.

In the UK, like-for-like revenue declined by 3.5% including price inflation of less than 1%. New residential construction, which represents approximately 5% of UK revenue, continued to grow strongly but growth in residential RMI markets, which represents approximately 60% of UK revenue, remained modest and Industrial markets remained weak.

During the quarter in the UK Wolseley agreed to acquire Fusion Provida and Utility Power Systems, two suppliers of utility infrastructure products. The acquisitions have annualised revenue of £55m.

In central Europe, like-for-like revenue of the ongoing businesses declined by 1.8% including 1% price inflation.

In May Wolseley agreed to dispose of the ÖAG plumbing and heating business in Austria, subject to competition clearance.

Darren Shapland, John Daly and Jacky Simmonds have joined the Wolseley board as non-executive directors.

Ian Meakins, Wolseley chief executive, said: "We continued to make good progress in the third quarter with strong growth in the USA and the Nordics offsetting more challenging conditions elsewhere.

“Like-for-like revenue growth in the UK was lower as we continued to focus on protecting gross margins.

“The group grew its gross margin and controlled operating expenses to generate good conversion into trading profit, though reported results were affected by significant unfavourable foreign exchange rate movements.

“Cash generation was good and we are continuing to invest in technology and new business models to deliver better customer service and gain profitable market share."

Source : Andy Coyne - TheBusinessDesk

03 June 2014
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