Wolseley has released its interim Management Statement for the 3 months to 31 October 2011
Like-for-like revenue in the UK declined 3 per cent. Excluding the impact of the contract loss last year, like-for-like growth was 1 per cent as Plumb and Parts Center worked to replace lost business in weak construction markets.
Pipe and Climate and Drain Center performed well generating strong growth and improving their performance. Bathstore revenues continued to be lower than last year. Trading profit for the quarter was £24 million which was £6 million below last year, £3 million of which was due to disposals. Trading profit included £1 million of one-off credits relating to the profit on disposal of surplus property (2010: £2 million).
Adjusted net debt at 31 October 2011 was £587 million (31 October 2010: £1,000 million). Proceeds from the sale of Build Center and the minority stake in Stock Building Supply were received after the end of the quarter. There has been no other significant change in the financial position of the Group.
Commenting on the trading outlook, Ian Meakins, Chief Executive said: “Wolseley has continued to grow well, with strong growth in the USA offset by lower growth in some of our European businesses. Given continuing macroeconomic uncertainty, trading conditions may get tougher in the coming months.
“We will remain vigilant on costs and continue to drive performance improvements, strong cash conversion and better customer service. Our balance sheet is strong and the Group is well positioned to continue to invest selectively where we can generate good returns.”
First quarter highlights
- Like-for-like revenue growth of 5 per cent
- Gross margin of 27.1 per cent was 0.1 per cent ahead of last year
- Trading profit was 16 per cent ahead at £185 million
- Adjusted net debt of £587 million, £118 million lower than 31 July 2011
- Sold Encon in the quarter, and completed the disposals of Build Center and our minority stake in Stock Building Supply in November
- Completed two acquisitions in the quarter and one in November, in the USA, with aggregate annual revenue of £88 million for consideration of £29 million.
On 31 October 2011 the Group disposed of Encon, the UK insulation business, which generated revenue of £183 million and trading profit of £5 million in the year ended 31 July 2011. Cash consideration of £20 million was paid on completion with a further £22 million satisfied through the issue of loan notes repayable in 2016. On 4 November 2011 the disposal of Build Center was completed as previously announced, and on 17 November 2011 the Group disposed of its remaining minority stake in Stock Building Supply for cash consideration of £15 million.