Wolseley (LSE: WOS) — the Reading-based multinational building materials distribution company behind brands such as Plumb Center and Burdens — released an interim management statement for the first quarter this morning, in which it reported £3,506m of revenue from its ongoing business, a rise of 9.8% (at constant exchange rates).
Wolseley’s share price has risen 0.6% in trading so far this morning.
Gross margin for Wolseley’s ongoing businesses was in line with last year, at 27.5%, and the trading profit generated from them was £235m, up 13.5% (at constant exchange rates) on last year. The company says that adverse exchange rate hit its trading profit by £9m.
Looking geographically, the company’s like-for-like revenue grew 12.4% in the US, saw “modest” rises in Canada (up 1.7%), UK (up 0.5%) and the Nordic region (up 1.9%), but declined by 9.3% in Central Europe and France.
Wolseley says that it completed four “bolt-on” acquisitions, with a total annualised revenue of £26m, during the first quarter, and that since the end of the period it has sold a non-core US business for £19m in cash.
Based on current exchanges rates, Wolselsey says it expects its full-year group trading profit to be in line with current analyst consensus.
Commenting on the results, CEO Ian Meakins said:
“Wolseley has continued to generate strong revenue growth across all businesses and all regions in the USA with double digit growth for the second consecutive quarter. We generated modest like-for-like revenue growth in Canada, UK and Nordics. Central Europe and France declined due to continued weak market conditions. While we held our gross margins overall, there remained substantial pressure on gross margins throughout Europe. We controlled our operating expenses resulting in good flow-through to trading profit in the ongoing businesses. Cash generation was strong and we are continuing to invest in technology and new business models to deliver better customer service and gain market share.“
At 3,587p, Wolseley’s share price has risen 2.6% since this time last year, versus a 1.7% rise in the value of the FTSE 100. And over five years Wolseley is comfortably beating the index, with a share price gain of 163%, compared with the FTSE 100’s 28% increase.
