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Wolseley Sales Up 5.2% in Fiscal First Half 2014

UK-based Wolseley plc, parent company of Ferguson Enterprises, reported sales of £6.4 billion (US$10.6 billion) for its fiscal first half 2014 ended Jan. 31, 2014, up 5.2 percent. On a like-for-like basis, sales were up 3.2 percent.

Trading profit for the half was £352 million (US$581 million).

Growth was driven by strength in the U.S. and UK and “modest improvement” in like-for-like growth in the Nordic region. Wolseley reported ongoing weakness in Central Europe and Canada.

Two bolt-on acquisitions were completed in the period with annualized revenue of £52 million (US$85.9 million).

Revenue for Wolseley’s U.S. business, including Ferguson Enterprises, (53 percent of ongoing revenue) was up 6.2 percent to £3.4 billion (US$5.6 billion) from last year on a like-for-like basis, including price deflation estimated at 0.7 percent as a result of falling commodity prices. On an actual basis, revenue was up 7.4 percent from the prior-year period.

Trading profit in the U.S. was up 14.3 percent at £255 million (US$421 million).

The U.S. business opened 18 new branches in the first half, primarily in the Blended Branches and Industrial businesses. Headcount was up 194 to 19,163, with 84 coming from acquisitions. U.S. trading margin was 7.4 percent, up from the same period a year ago, when it was 7 percent.

Sales were up 5 percent in the fiscal second quarter 2014. The slower growth rate was in part attributed to extremely cold weather during the period.

The RMI segment was “resilient,” Wolseley reported, and recovery in new construction continued in the U.S. Ferguson’s Blended Branches and Waterworks businesses saw growth in the period; the Fire and Fabrication business also grew strongly, Wolseley said, as the commercial market recovered.

Wolseley reported’s growth rate was lower vs. strong comparables. The U.S. HVAC business grew, but the Industrial segment was affected by weaker demand for piping products that support the shale gas exploration industry.

Canada sales (7 percent of ongoing revenue) were down 3.5 percent in the second quarter 2014.

In the fiscal first half 2014, Canada sales were £406 million (US$670.3 million), down 7.7 percent from the prior-year period. Sales were down 1.9 percent on a like-for-like basis.

Wolseley reported new residential markets in Canada continue to be depressed, particularly in Quebec. Blended Branches grew modestly, but Waterworks and Industrial declined in Canada. Headcount was down by 50 in the first half to 2,461. Canada trading margin was 5.9 percent, compared with 6.4 percent the year before.

Revenue in the UK (15 percent of ongoing revenue) was 3.2 percent ahead of the prior year on a like-for-like basis, including 1 percent price inflation. The residential RMI market was “resilient” and new resident construction grew, helped by government incentives.

Plumb and Parts Center grew with a focus on higher margin segments. Trading margin in the UK was 5.1 percent, down from 5.4 percent last year.

Ongoing revenue in the Nordics (14 percent of ongoing revenue) was down 1.2 percent on a like-for-like basis, including 1 percent price inflation. The region generated growth in the second quarter for the first time in two years, but construction markets remained depressed in Denmark and challenged in Finland.

In France, sales were up 0.4 percent on a like-for like basis, and in Central Europe, sales were down 2.6 percent on a like-for-like basis.

Get more detail from Wolseley on its first-half 2014 results here.

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