The 2020 Mid-Year Economic Update_long

Wolseley Sales Up 5.9% in First Half of Fiscal 2016

Ferguson sales grow 4.3 percent on a like-for-like basis in the first half.

UK-based Wolseley plc, parent company of Ferguson Enterprises, reported sales of £6.8 billion (US$9.7 billion) for its fiscal first half ended Jan. 31, up 5.9 percent year-over-year. On a like-for-like basis, sales were up 2.7 percent.

Trading profit for the half was £410 million (US$582.6 million), a 5.1 percent increase from the prior year.

Growth was driven by market share gains in the U.S. in good commercial and residential markets, partly offset by weak industrial markets. E-commerce growth was responsible for 14 percent of sales.

Six bolt-on acquisitions were completed in the period with annualized sales of £115 million (US$163.4 million). Two further acquisitions have been completed since the period end with annualized sales of £13 million (US$104 million).

The company also disposed of its French building materials activities on March 7.

Sales for Ferguson, Wolseley’s U.S. business, (80 percent of ongoing trading profit) were up 6.5 percent from last year to £4.4 billion (US$6.3 billion), and 4.3 percent on a like-for-like basis.

Acquisitions contributed 2.1 percent of additional sales growth. The company’s trading margin was 7.9 percent, consistent with last year and trading profit was 5.5 percent ahead of last year.

Ferguson gained market share in all of its major businesses. Residential and commercial markets, both new construction and renovation, maintenance and improvement, grew steadily in the first-half. Blended branches (locations serving both residential and commercial customers) grew across all regions from a combination of market growth and good market share gains. The B2C e-commerce business experienced strong growth, and fire and fabrication and HVAC both generated good growth with waterworks growing more modestly against strong prior year comparatives.

Ferguson completed six acquisitions in the first-half of fiscal 2016. These included three regional fire and fabrication businesses: Central Pipe and Supply, Action Fire and Fab and Atlantic American. Ferguson also acquired Living Direct, an online appliance business, Renwes, an appliance retailer based in Orange County, CA, and PCS Industries, a Commercial MRO distributor based in Chicago, IL. 

Canada
Canada sales (4 percent of ongoing trading profit) were down 1.8 percent compared to last year on a like-for-like basis. Modest growth in blended branches were offset by a decline in industrial and waterworks.

Since the end of the period the company acquired two businesses with annualized sales of £13 million (US$18.5 million) – Medallion Pipe Supply, a single branch industrial pipes distributor based in Saskatoon, and Underground Specialties, a Waterworks business based in Ontario.

UK
Revenue in the UK (8 percent of ongoing trading profit) was 2 percent lower than the prior year on a like-for-like basis, with acquisitions contributing an additional 4 percent of sales growth. Despite some growth in the new build market, RMI markets declined in the first half. The company also closed 10 branches.

Nordics
Sales in the Nordics (5 percent of ongoing trading profit) was up 4.2 percent on a like-for-like basis. Market conditions improved steadily in Denmark and Sweden, and Finland recovered modestly.

Central Europe
Sales in the Central Europe segment (3 percent of ongoing trading profit), which comprises Wolseley's plumbing and heating businesses in Switzerland and the Netherlands, declined 3.1 percent on a like-for-like-basis. Reduced activity in the construction market and currency volatility in Switzerland was partly offset by better conditions in the Netherlands.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

0

articles left

This is your last free article

Subscribe to MDM Premium today and get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.