Wolseley attempts to sell French branches as Europe drags down performance
PLUMBING and heating group Wolseley has performed solidly in most of the markets it operates in, its latest results show.
But Europe continues to underperform and the firm is attempting to dispose of building materials units in the South of France.
In the half year to January 31, the Leamington Spa firm increase decrease from £6.84bn in H1 2012 to £6.27bn but profit before tax was up to £250m from £199m.
The firm showed net debt of £871mafter £462m of dividends, £125m of one-off pension contributions and the purchase of £110m of its own shares by employee benefit trusts.
Wolseley saw ontinued market share gain and growth in the US, a broadly flat picture in Canada and the UK and weakness in Europe.
Chief executive Ian Meakins said: “The highlight of these results is the strong performance across our US businesses with market share gains and productivity improvements.
“Canada and the UK have performed well in continued tough market conditions.
“We faced substantial headwinds in Europe, and are taking appropriate actions to protect profitability. The underlying gross margin increased and our on-going focus on operational efficiency has delivered further improvements in the trading margin of the on-going businesses, now up to 5.2%.
“Our strong balance sheet has enabled us to continue to reinvest in our businesses at the same time as paying dividends of £462m. We have completed a number of bolt-on acquisitions in the USA and the UK and they are being integrated successfully.
“We are in advanced negotiations relating to the proposed disposal of 88 building materials branches in the south of France, the potential closure of 24 loss making branches and detailed actions to simplify and refocus the remaining building materials business in France.
“We believe these proposals can create a strong regional player in northern France with a better proposition for our customers, a lower cost to serve and an efficient organisational structure.”
