Wolseley sales and profit recover

Published:  29 March, 2011

LEAMINGTON SPA: Wolseley posted a 64% rise in half-year trading profit and reinstated its dividend but said second-half comparatives would be more demanding.

The FTSE 100 company today posted a 5% increase in like-for-like revenue to £6.6b with a trading profit that strips out exceptional items, amortisation and impairments, of £275m against £167m in 2010.

Shares in Wolseley topped the FTSE 100 today, after the plumber's merchant re-introduced dividend payments.

Wolseley, which trades in Britain, Canada, the United States and 22 other countries, said stabilising markets, particularly in areas such as repairs and maintenance and new residential, helped its performance for the first half to end of January 2011.

In the UK, Wolseley's second market after the US, like-for-like revenue was up 6% but the company said it remains cautious on the sector due to prospective VAT increases and cuts in public sector spending, which represents about 25% of UK revenues.

Wolseley, which is to change domicile to Switzerland to lower its tax rate, said the overall macro-economic environment in several regions continued to be fragile and pricing competition remained intense.

Ian Meakins, chief executive, said: "The group expects to continue to grow in the second half of the year, though the comparatives will now be much more demanding."

"Construction markets have now broadly stabilised in most of our geographies, particularly the new residential and RMI segments in the USA. The overall macro-economic environment in several regions continues to be fragile and pricing competition remains intense. The impact of recent VAT increases and government spending cuts leaves the outlook in the UK more uncertain."

Shares in the company, closed at 2,089 pence on Monday, up 30% on a year ago, valuing the business at around £5.9b.

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