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Wolseley Sales Up 3% in First Half of FY12

Global distributor Wolseley reported sales for the six months ended Jan. 31, 2012, were £6.84 billion (US$10.9 billion), up 3 percent year-over-year. On a like-for-like basis, sales increased 5 percent. Profit before tax was £250 million (US$399.1 million), up 28 percent over the same period a year ago.

"Wolseley has delivered another decent performance, despite challenging economic conditions in Europe, with like-for-like revenue growth of 5 percent," said Ian Meakins, group chief executive. "...Like-for-like growth trends for the group since the end of the period have been slightly lower than the first half overall with the U.S. a little better and Europe a little weaker.

"We will continue to pursue operating efficiencies and remain focused on improving customer service, gaining market share and protecting our gross margins," he said. "We will continue to invest selectively in the business where we can exploit growth opportunities and generate good returns."

Wolseley has completed six bolt-on acquisitions since Aug. 1, 2011.

Revenue for Ferguson, Wolseley's U.S. business, was 9 percent ahead on a like-for-like basis, including price inflation of approximately 4 percent. The repair, maintenance and installation (RMI) segment remained resilient with modest recovery in levels of new construction. The major business units of Blended Branches, Waterworks and Industrial continued to gain market share.

Ferguson completed three acquisitions in the first-half: Groeniger & Company, a large Waterworks distributor in California, SG Supply Co., Inc., a blended branch in the Chicago area and Louisiana Chemical Pipe, Valve & Fitting, Inc., an Industrial distributor in the Gulf Coast region. Acquisitions accounted for 1 percent of the company’s revenue growth.

In Canada revenue was 3 percent ahead on a like-for-like basis including price inflation of approximately 1 percent. The growth rate improved in the second quarter and new residential volumes remained high. Infrastructure spending continued to grow supported by strong demand from the oil and mining sector.

Revenue in the ongoing U.K. business declined 3 percent on a like-for-like basis. Demand in the heating market was subdued, while other product categories performed well. Price inflation in the ongoing businesses was approximately 3 percent.

In the Nordic region like-for-like revenue growth was 5 percent, though macroeconomic conditions were weak, particularly in Sweden and Finland. In Denmark the company's building materials business increased although demand for other segments remained subdued.

Revenue in France grew 4 percent on a like-for-like basis including approximately 3 percent inflation in deteriorating construction markets. The end of government stimulus action may have a negative effect on activity levels going forward. Reseau Pro, the company's building materials business in France, increased revenue although intense pricing pressure led to lower gross margins. Revenue in the Wood Solutions business was broadly flat.

In Central Europe like-for-like revenue was 1 percent ahead of last year. Good growth in Austria was offset by a decline in Holland where Wolseley continues to exit unprofitable business. Revenue in Switzerland was flat as volume growth was offset by price deflation.

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