Decent growth for building supplies group despite European headwinds

BUILDING, heating and plumbing supplies group Wolseley has delivered a solid set of half year results based on growth in its UK and US operations.

In the half year ended January 31, the Leamington Spa firm saw total revenue increase by 3.9% to £6.52bn (H1 2013:  £6.26bn).

Profit before tax was up from £193m to £316m.

However, the firm’s net debt has increased from £871m to £927m.
 
Wolseley said it has seen good growth in the US and UK and modest improvement in like-for-like growth in the Nordic markets.

It reports continued weakness in Central Europe and Canada.

Ian Meakins, chief executive, said:  “We delivered a good performance in our USA and UK businesses, achieving decent revenue growth and an improvement in underlying gross margins.

“We continued to face headwinds in Continental Europe requiring strong action on gross margins and costs to protect profitability.

“We have continued to invest in technology and processes to develop more efficient business models to support improvements in operational efficiency and to improve our trading margin, which is now up to 5.6% for the on-going businesses.
 
“The like-for-like revenue growth rate in the USA since the end of the period has been in line with what the business generated in Q1, with the like-for-like revenue growth rate for the group as a whole broadly consistent with the performance in the first half.

“We expect the group’s like-for-like revenue growth rate for the remainder of the year to be about 4%.”