25th Mar 2014 09:09
LONDON (Alliance News) - Wolseley PLC said Tuesday total revenue rose nearly 4% and pretax profit jumped during the half-year as it recorded good growth in its USA and UK businesses, and a modest uptick in like-for-like growth in Nordics.
The multinational building materials distribution company said total revenue for the half-year to January 31, 2014 was up 3.9% at GBP6.52 billion from GBP6.28 billion in the comparable period last year. Pretax profit jumped 63.7%, reaching GBP316 million for the six months, up from GBP193 million in 2013.
Revenue from ongoing business was up 5.2% to GBP6.41 billion from GBP6.10 billion, a 3.2% like-for-like increase, said Wolseley.
The FTSE 100-listed firm also increased its dividend payout to 27.5 pence per share from the 22 pence per share paid on the comparable period, a 25% increase, which Wolseley said reflects its strong and sustainable cash flows.
Despite growth in the USA and UK markets and a steady reading from its Nordic interests, the firm said it saw continued weakness in Central Europe and Canada.
Revenue from the USA business - which accounts for 53% of group revenue - was up 6.2% on last year at GBP3.43 billion from GBP3.19 billion, buoyed by continued good growth in the Blended Branches and Waterworks businesses and the Fire and Fabrication business grew very strongly as the commercial market recovered, said the firm.
Revenue in Wolseley's UK business was up 3.2% on a like-for-like basis at GBP943 million from GBP850 million last year. Within the market, the Plumb and Parts Centre grew well and improved performance as the company focused on higher margin segments. In recent months high volumes of boilers have been installed through the government-sponsored Energy Company Obligation scheme, which has now been completed. The UK market accounts for around 15% of Wolseley's business.
Ongoing revenue in the Nordics declined 1.2% on a like-for-like basis, with construction markets remaining depressed in Denmark and extremely challenged in Finland, said the firm, while noting that the businesses maintained their strong market positions. Revenues declined slightly to GBP916 million from GBP917 million last year.The Nordic market accounts for approximately 14% of ongoing group revenues.
Central Europe, which represents around 7% of Wolseley revenues, saw revenues decline 2.6% on a like-for-like basis with no overall significant price inflation. In Switzerland, volume growth was offset by price deflation as a result of the appreciation of the Swiss Franc, said Wolseley. Revenue was lower in Austria, though the trends improved towards the end of the period. Wood Solutions' like-for-like revenue was slightly ahead. Revenues were down at GBP436 million for the six months from GBP427 million last year.
Two bolt-on acquisitions with annualised revenue of GBP52 million were completed during the period, said Wolseley, and the previously announced acquisition of Puukeskus was also completed during the period.
In a statement the firm said it made "good progress on investment in technology and processes to support the development of more efficient business models."
Shares in the company were trading higher Tuesday morning at 3,365 pence per share, up 1.88%, making it one of the biggest gainers on the FTSE 100.
By Alice Attwood; [email protected]; @AliceAtAlliance
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