Wolseley meets forecasts for comparable sales, guides lower
Wolseley registered a sharp rise in quarterly profits boosted by favourable tailwinds form the currency market, although management expects a slight slowdown in sales.
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The heating and plumbing products distributor, which has a large exposure to the US market, reported a 16.6% increase in revenues for the third quarter of its fiscal year to reach £3,301m.
Excluding exchange rate variations sales were up by a slightly more tempered 12.4%.
Like-for-like sales rose by 7.5% (Numis: circa 8%).
Trading profits increased 20.3% to hit £195m, with £11m coming from favourable currency tailwinds and another £6m from an extra trading day in comparison to the previous year.
The trading margin improved by 60 basis points to 5.9% for the on-going businesses.
Group like-for-like revenues are seen slowing to about 6% over the next six months, with trading profits for the full-year expected to be in-line with analysts’ forecasts.
The company’s net debt decreased to £1.13bn at period end from £1.22bn one year ago.
“We continue to like the group US exposure, but the consistent underperformance of the European operations have offset any upgrade in this regard and as this is expected to continue we believe the shares are fairly rated, as we favour others for US exposure (Tyman, Keller) and Merchanting recovery (Grafton, Howden),” Numis analyst Howard Seymour wrote in a research note e-mailed to clients on 1 June.