Wolseley Sales Increase 4.7% in Third Quarter - Modern Distribution Management

Log In

Wolseley Sales Increase 4.7% in Third Quarter

Like-for-like sales in the U.S. climbed 9.4 percent with growth in most key businesses.
Author
Date

European distributor Wolseley reported sales for the third quarter ended April 30, 2012, were £3.2 billion (US$5 billion), up 4.7 percent over the same period a year ago. On a like-for-like basis, sales increased 3.8 percent. Trading profit was £141 million (US$220.3 million).

We Deliver Distribution News to Your Inbox
Sign up below to receive MDM Update, your free weekly distribution news update by email.

\"\"

For the first nine months of the fiscal year, sales from ongoing operations were £9.4 billion (US$14.7 billion), a year-over-year increase of 6.3 percent. On a like-for-like basis, ongoing sales were up 4.6 percent. Trading profit was £451 million (US$704.8 million).

3Q Sales by Geography

In the U.S., like-for-like revenue growth in the third quarter was 9.4 percent and most of the key businesses continued to take market share. While Repair, Maintenance and Improvement markets were broadly flat, the modest recovery in new residential markets continued. The Blended Branches business generated strong like-for-like revenue growth and improved gross margins with profit strongly ahead.

The Industrial and Waterworks businesses also made good progress, benefiting from recent acquisitions and improving its trading performance. The Heating, Ventilation and Air Conditioning business also grew well although revenue and gross margins were lower reflecting the removal of government tax incentives for higher specification equipment. Overall U.S. trading profit of £95 million (US$148.5 million) was 19 million ahead of last year.

During the quarter, Ferguson acquired Reese Kitchens, Inc., Indianapolis, IN.

Revenue in Canada in the quarter grew by 7.9 percent on a like-for-like basis. The Industrial business continued to benefit from the oil, gas and mining sectors. Improving market conditions also benefited the Waterworks business although growth trends were slightly weaker in HVAC. Trading profit of £6 million (US$9.4 million) was £2 million ahead of last year.

Like-for-like revenue in the UK excluding last year’s contract loss was 1.9 percent driven by Plumb and Parts Center despite weaker demand. Pipe and Climate Center and Drain Center performed well generating good growth. Headcount was 68 lower than at 31 January 2012 as we continued to focus on the cost base. Trading profit for the quarter was £26 million (US$40.6 million), £3 million ahead of last year due principally to lower bad debt charges. Operating expenses included £1 million of one-off restructuring charges.

In the Nordic region, like-for-like third-quarter revenue decreased by 1.7 percent. The seasonal pick up in new residential construction markets in Denmark was weaker than last year although the business continued to hold market share. Growth rates were also held back in Sweden and Finland in lackluster markets, though the businesses protected gross margins. In Norway demand was subdued although it continued to be underpinned by a strong oil and gas sector. Trading profit was £7 million (US$10.9 million) in the quarter, £8 million below last year.

During the quarter Wolseley completed the acquisition of a single branch building materials business in Denmark.

Like-for-like revenue in France declined by 6.1 percent as new construction markets weakened. Ending government stimulus activity may have an effect on activity levels going forward. Trading profit was £9 million (US$14.1 million) in the quarter, £6 million below last year and included £1 million of one-off restructuring charges.

In Central Europe like-for-like revenue was flat as price deflation on Euro sourced products in Switzerland constrained sales, but gross margins were ahead of last year. In Austria the business generated higher revenues and held gross margins in the period. Like-for-like revenue was flat in challenging markets in Holland. Trading profit of £5 million (US$7.8 million) in the quarter was £2 million below last year.

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.