1st Jun 2016 06:21
LONDON (Alliance News) - Wolseley PLC on Wednesday said it saw "decent revenue growth" in the third quarter of its financial year, despite deflationary headwinds and mixed market conditions, although it noted that recent revenue growth trends have been weaker.
The building products company posted revenue of GBP3.66 billion for the three months to April 30, an 11% increase from the GBP3.30 billion reported for the same period a year earlier, which drove trading profit up to GBP230.0 million from GBP195.0 million. Trading profit excludes exceptional items and amortisation of acquired intangibles.
The increase in revenue was boosted by a strong performance in the US division, where revenue came in 8.2% higher than a year earlier at GBP2.41 billion from GBP2.12 billion, and grew 5.0% from the second quarter on a like-for-like basis.
Wolseley said the like-for-like increase included price deflation of 2.3% and, whilst its most of its US businesses saw good like-for-like growth, the US industrial market continued to be impacted by weak demand.
In the UK, like-for-like revenue was 0.4% lower than the same period the previous year, as repair, maintenance and improvement markets remained weak. However, Wolseley said it is making good progress with the review of the UK operating model, and it expects the review to be completed in August.
Wolseley's Nordic operations were hit by bad weather conditions as well as the reduction of tax incentives.
"Demand in several of the group's markets remains subdued, and we continue to experience the adverse impact of commodity deflation, particularly in the US," Wolseley said in a statement.
"Like-for-like revenue growth in the weeks since the end of the quarter has been 1.0%. We have committed to further restructuring in the UK and Europe bringing the total expected costs for the full year to about GBP20.0 million. We expect trading profits for the full year, before restructuring costs, to be in line with analyst expectations at current exchange rates," Wolseley added.
By Hannah Boland; [email protected]; @Hannaheboland
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