Positive quarter for Wolseley as US trading remains strong
Warwickshire-based Wolseley has seen revenue grow by more than 6% in its third quarter after strong trading in the United States.
The Leamington Spa company, the world’s largest specialist trade distributor of plumbing and heating products, saw revenue grow to £4,240m (Q3 2016: £3,658m). Exchange rate movements increased revenue by £423m.
In addition, trading profit was up 9.5% to £254m (Q3 2016: £232m).
But while the Nordics market returned to growth, the UK market was broadly flat with like-for-like revenue down 0.4% on the same quarter last year. Gross margins were slightly ahead of last year and trading profit of £23m was £3m behind last year due to two fewer trading days.
Nevertheless, it said it had continued to make good progress with the transformation strategy announced in September 2016.
Ferguson, the group’s US plumbing and heating business, grew revenue by 8.5% on a like-for-like basis. Acquisitions contributed another 2.8% of revenue growth.
US trading profit of £227m was £23m ahead of last year including a £29m favourable impact from exchange rate movements.
In line with the strong US performance, the company said its plans to change the name of the business in the US to Ferguson would become effective on July 31. It will continue to be known as Wolseley in the UK and Canada.
The group will also change the presentational currency of the group to US dollars from August 1, 2017.
Commenting on the results, John Martin, chief executive, said: “Revenue growth in the quarter was good with US residential and commercial markets growing well and industrial markets improving. The Nordics returned to growth and the UK was broadly flat.
“Since the end of the period revenue growth has been broadly in line with the third quarter, gross margins and cost control have been good. The group expects trading profit for the full year to be in line with current analyst consensus expectations.”
