Wolseley Sales Decline 13% in First Quarter - Modern Distribution Management

Log In

Wolseley Sales Decline 13% in First Quarter

Residential markets started to show signs of stabilizing during the first quarter for the distributor, while industrial and commercial markets are expected to remain 'challenging'
wolseley-logo
Author
Date

UK-based Wolseley plc reported sales from continuing operations were £3.49 billion (US$5.69 billion) for the three months ended Oct. 31, 2009, down 13% from the same period a year ago. Trading profit from continuing operations fell 41% to £104 million (US$174.4 million). On a constant currency basis revenue declined by 20% and trading profit was 46% lower than the corresponding period in the prior year.

“The overall trading environment continues to be extremely tough and we remain firmly focused on driving operational performance,” Group Chief Executive Ian Meakins said. “At the same time, we are making good progress in evaluating our businesses to prioritize future investment.”

Global market conditions are expected to remain challenging, particularly in the Industrial and Commercial segment while New Residential and RMI markets are expected to continue to move towards stabilization.

During the first three months of fiscal year 2010, restructuring costs of £10 million (Wolseley UK £5 million, North America £3 million, France £1 million and Central and Eastern Europe £1 million) were incurred and charged against trading profit.

North America
In North America, first quarter sales were down 17% compared to the corresponding period in the prior year. Trading profit was down by 44%, reflecting lower profitability in Ferguson and the one off property profit in the prior year. On a constant currency basis, revenue and trading profit were 24% and 49% lower than a year ago.

Ferguson experienced a further decline in the Commercial and Industrial market due to continued shortage of funds for project financing available. However, most of the residential markets are showing increasing signs of stabilization. Revenue in local currency for the three months decreased 26% and underlying trading profit excluding property profits for the quarter was down around 47%.

Local currency revenue for Wolseley Canada decreased by around 16% with trading profit down around 33% due to the lower level of sales and a lower gross margin.

Europe
Revenue for Europe was down by around 10% in the three months ended Oct. 31, with trading profit down by around 23%. On a constant currency basis revenue and trading profit declined by approximately 16% and 30% compared to the corresponding period in the prior year.

While revenue for the UK and Ireland decreased by about 13%, trading profit excluding £5 million of restructuring costs was up by around 17%, due to the benefits of cost reduction actions in the prior year. Signs of stabilization increased in the Residential and RMI markets in the UK, and the rate of decline in the Commercial and Industrial market has slowed. The Irish market continues to be extremely challenging, although the rate of trading losses has stabilized and is broadly in line with the corresponding period in the prior year.

The Nordic region reported revenue, in local currency down around 19% with trading profit down around 14%. In France, revenue in local currency for the quarter was down by 17%.

Revenue in Central and Eastern Europe (C&EE), in local currency was down around 16% with trading profit down around 33%. Wolseley recently completed the disposal of the Belgium and Slovakian Lightside businesses. The disposal of the Czech Lightside business is also underway and is expected to be completed in the next few weeks.

Share this article

About the Author
Recommended Reading
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.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

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

Subscribe to continue reading

MDM Premium Subscribers 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

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.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.