The 2020 Mid-Year Economic Update_long

Wolseley 3Q Sales Decline 7%

Global distributor sees significant sales gains in Canada, while other geographies continue to decline.
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UK-based Wolseley reported sales for the third quarter ended April 30 were £3.25 billion (US$4.72 billion), a decline of 7 percent over the same period a year ago. Organically, sales declined 2 percent. Trading profit improved 112 percent to £101 million (US$146.8 million).

Fiscal year to date, sales were £9.58 billion (US$13.9 billion), down 13 percent from the prior year period. Trading profit declined 10 percent to £268 million (US$389.4 million).

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\”Demand across the markets in which we operate remains mixed though most markets continue to stabilize,\” said Ian Meakins, Wolseley’s chief executive. \”The UK and Canada generated like for like revenue growth and the revenue trend is encouraging in the USA. Our focus remains on improving customer service, maintaining market share and margins, driving efficiencies in our cost base and cash generation.\”

In the US, Ferguson’s revenue in the quarter was 10 percent below last year though the decline was restricted to 4 percent on a like for like basis due to weakening of the US Dollar. Trading profit of £58 million was £7 million ahead of last year as a result of the improved cost base.

Demand in residential and RMI markets continued to improve and the business made good progress in the industrial and waterworks sectors. Demand in the commercial sector remained weak.

Canada returned to growth, generating revenue 19 percent ahead of last year in the quarter, 6 percent ahead of last year on a like for like basis. Growth trends were broadly based across the business, reflecting positive economic factors.

Trading profit of £7 million was £6 million ahead of last year.

Sales in the UK declined by 5 percent in the quarter, with like-for-like revenue up 4 percent. Revenue trends in the building materials and related businesses have continued to improve though they are not yet generating like for like revenue growth. Trading profit in the quarter was £31 million compared to £13 million in the same period last year.

In the Nordic region revenue declined by 7 percent and the like for like decline was 5 percent. The market in Denmark, the largest revenue generator in the region, continued to decline though Sweden, Finland and Norway generated like for like growth.

Trading profit in the quarter of £11 million was £3 million below last year as a result of the revenue decline.

Revenue in France declined by 10 percent, 8 percent on a like for like basis, though trends improved across each of the business groups. Trading profit of £8 million in the quarter compared to a loss of £2 million last year, principally due to an improved cost base.

In Central and Eastern Europe revenue was 10 percent lower than last year, 3 percent lower on a like for like basis. The region generated a trading profit of £2 million, slightly ahead of last year after adjusting the comparative result for a loss on disposal of a business of £10 million.

The group disposed of two small operations in the quarter, including the Public Works business in France and the small Friosol business in Central and Eastern Europe.

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