Wolseley reports mixed results

Published:  28 September, 2010

LEAMINGTON SPA: Shares in Wolseley were up on the FTSE 100 in yesterday’s afternoon trading as the builders' merchant prepared to release its full year results.

The national merchant’s revenue of £13,203m was 10% below last year on a constant currency basis. It had like-for-like revenue growth of 4% in Q4.

Ian Meakins, chief executive, commented: "In the second half of 2010 an improvement in like-for-like revenue growth, continued cost discipline and a consistent focus on protecting gross margins delivered results ahead of expectations. Recognising this improved performance the board intends to resume dividends at the half-year results.

"Demand across our markets remains mixed and the economic outlook continues to be unclear.

“Revenue growth in the early part of the current financial year is similar to that seen in Q4 last year. We will continue to take actions that will strengthen the business and, while overall we remain cautious about the outlook for our markets, we are confident that Wolseley will make good progress in the year ahead."

Gross margin was maintained at 27.7%, despite a tough trading environment, the company reported. Operating costs were reduced by £353m (10%).

The merchant showed a trading profit of £450m, and a second half trading profit of £283m – £87m ahead of last year. It also showed strong cash from operating activities of £705m.

Improved full year trading profit was seen in the UK, Nordic, Canada and Central and Eastern Europe markets. This was driven by benefits of cost reductions made in the previous year. There was an improved second half trading profit in the US and France.

The company has exited several non-core businesses, including Ireland. 

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