Despite challenges in the UK and the U.S. industrial markets, sales for Wolseley plc increased in the first half of fiscal year 2016. The company closed 10 branches in the UK during the period, but it opened 41 branches elsewhere and refurbished or expanded "many others," according to CFO John Martin in a call to discuss the latest results.
The company attributes the improvement to a consistent focus on its core profit levers, Chief Executive Ian Meakins said.
"We made the point consistently that our business does not yield to grand gestures," Meakins said. "But profitable growth can be delivered based on small improvements in these profit levers."
Meakins identified five key levers that drove growth in the first half of the year:
1. Focus on the customer."We continued to marginally increase our service levels alongside product availability and also the on-time and full delivery to our customers," he said.
2. Realigned organizational structure to better serve markets. Wolseley restructured its company into 19 districts that can "develop and deliver more targeted plans deep into the geography," Meakins said. Each district has dedicated directors to provide expertise on the core areas, providing more support for branches within the district.
3. Investment in B2C e-commerce. While still focused on B2B customers, Wolseley's B2C e-commerce platform, Build.com, had revenue of $450 million in the first half. And there's still a lot of opportunity to grow, Meakins said.
4. Dedicate resources to growth opportunities. "Our HVAC business has performed very well in the past year and gained good share," Meakins said. "To maintain that growth, we are putting in place dedicated resources in the blended branches business to deliver national programs for our key vendors."
5. Expand on targeted focus. Segmentation and targeted serviceare not new concepts for Wolseley. The distributor continues to invest in growing its facilities maintenance MRO business, building on its philosophy of a targeted regional approach. It also plans to expand the business with acquisitions.