2nd Jun 2015 06:21
LONDON (Alliance News) - Wolseley PLC Tuesday said it expects to meet analysts' expectations for its trading profit in the current financial year after reporting strong growth in the third quarter of the year, driven by like-for-like sales growth, acquisitions, and an exchange rate boost.
The building products company reported a trading profit from ongoing businesses of GBP195 million for the three months to April 30, up 29.1% from GBP151 million a year earlier, as revenue grew 16.6% to GBP3.30 billion from GBP2.83 billion and the company improved its gross margins. The revenue increase if exchange rates had remained constant over the year would have been 12.4%, while the currency movements buoyed trading profit by GBP11 million.
"Gross margins were ahead as we continued to focus on improving the mix of customers, suppliers and products. Operating expenses were well controlled and we generated decent flow through to trading profit," the company said.
Wolseley said like-for-like revenue growth in the third quarter was 7.5% as it "outperformed the market in all key regions". It is predicting like-for-like growth of about 6% over the next six months.
The company bought three bolt-on companies in the quarter, with combined total annualised revenue of GBP69 million.
It said its closely-watched cash conversion was in line with its expectations. Its net debt stood at GBP1.13 billion on April 30, down from GBP1.22 billion on January 31, after paying its GBP78 million interim dividend.
"We expect the group's like-for-like revenue growth rate for the next 6 months to be about 6%. At current exchange rates, we expect group trading profit for the ongoing businesses for the full year to be in line with the current consensus of analyst expectations," the company said in its outlook statement.
By Steve McGrath; [email protected]; @stevemcgrath1
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