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|Q3 2017||Q3 2016(2)||Change||Change
(at constant exchange rates)
|Trading profit (1)||254||232||+9.5%|
Commenting on the results, John Martin, Chief Executive, said:
“Revenue growth in the quarter was good with US residential and commercial markets growing well and industrial markets improving. The Nordics returned to growth and the UK was broadly flat.
“Since the end of the period revenue growth has been broadly in line with the third quarter, gross margins and cost control have been good. The Group expects trading profit for the full year to be in line with current analyst consensus expectations.”
During the quarter the Group generated revenue of £4,270 million, 4.6% ahead of last year at constant exchange rates and 6.6% ahead on a like-for-like basis. Trading profit of £254 million included a £29 million favourable impact from exchange rate movements. There were two fewer trading days in the period which reduced trading profit by £17 million and there will be one more day in the fourth quarter compared to the same quarter last year. In the third quarter a £30 million exceptional charge was incurred as a result of restructuring in the UK and Nordic regions.
|Currency exchange impact||Trading days impact||Growth / (Decline)||Revenue
|Canada and Central Europe||258||31||(9)||(3)||277|
|£ million||Trading profit Q3 2016||Currency exchange impact||Trading days impact||Growth / (Decline)||Trading profit
|Canada and Central Europe||7||-||(1)||3||9|
Quarterly like-for-like revenue growth trends
|Canada and Central Europe||-||+0.3%||(2.7%)||+0.3%||+5.1%|
Ferguson, our US plumbing and heating business, grew revenue by 8.5% on a like-for-like basis. There was no significant impact from price inflation in the period. Acquisitions contributed another 2.8% of revenue growth. All businesses generated like-for-like revenue growth in the quarter with good growth across residential and commercial markets and industrial markets improving. Gross margins were broadly consistent with last year and operating costs were 12.3% higher at constant exchange rates, including 3.6% from acquisitions. Trading profit of £227 million was £23 million ahead of last year including a £29 million favourable impact from exchange rate movements and a £12 million negative impact from two fewer trading days. Three acquisitions were completed in the quarter, with total annualised revenue of £39 million. During the quarter we sold Endries, a small fasteners business, for £186 million.
Like-for-like revenue in the UK was 0.4% lower than last year including inflation of 3%. Repairs, maintenance and improvement markets remained weak. Gross margins were slightly ahead of last year and trading profit of £23 million was £3 million behind last year due to two fewer trading days. We continued to make good progress with the transformation strategy announced in September 2016.
Like-for-like revenue in the Nordics was 4.3% ahead of last year. Gross margins were weaker and operating costs were in line. Trading profit of £5 million was £2 million behind last year including a £1 million negative impact from fewer trading days.
Like-for-like revenue in Canada and Central Europe was 5.1% ahead of last year. Gross margins were in line and operating costs were 7.9% lower at constant exchange rates. Trading profit of £9 million was £2 million ahead of last year including a £1 million impact from fewer trading days. As previously announced the merger of Tobler with Walter Meier in Switzerland was completed on 6 April 2017 and Wolseley now owns 39.2% of the combined business.
9 months to 30 April 2017
(at constant exchange rates)(1)
(at constant exchange rates)(1)
|Canada and Central Europe (CCE)||931||791||(0.2%)||43||37||(3.0%)|
These results above include the following businesses being sold or merged that will not be included in the ongoing results at 31 July 2017:
9 months to 30 April 2017
|Trading profit 2017||Trading profit 2016|
|Nordics (being sold)||1,520||1,342||21||30|
|USA - Endries (sold on 1 June 2017)||151||122||14||9|
|CCE - Tobler (merged on 6 April 2017)||175||174||11||12|
Net debt at 30 April 2017 was in line with our expectations at £1,132 million (30 April 2016: £1,131 million). The interim dividend of £92 million was paid to shareholders on 28 April 2017. Total acquisition consideration in the quarter was £21 million and £94 million was received on the merger of Tobler with Walter Meier. Since the period end we have received net proceeds of £186 million relating to the disposal of Endries, our small US fasteners business. There have been no other significant changes in the financial position of the Group.
On 23 May 2017 shareholders approved a resolution to change the name of the Group to Ferguson plc which will become effective on 31 July 2017. The Group will continue to maintain the Wolseley trading name in the UK and Canada where it has strong local recognition. As previously announced, we will also change the presentational currency of the Group to US dollars from 1 August 2017.
As previously announced Mike Powell joined the Group as Chief Financial Officer on 1 June 2017. Mike joined from BBA Aviation plc where he served as the Group Finance Director.
As announced on 8 June 2017 Nadia Shouraboura has been appointed to the Board as a Non-Executive Director effective from 1 July 2017. Nadia, a US Citizen, was formally a Vice President at Amazon.com, Inc. After eight years at Amazon, she founded Hointer Inc., a Seattle based consultancy that helps retailers create innovative in-store experiences. She is also a Non-Executive Director of Cimpress NV, which provides physical and digital marketing products for small businesses.
Since the end of the period revenue growth has been broadly in line with the third quarter, gross margins and cost control have been good. The Group expects trading profit for the full year to be in line with current analyst consensus expectations.
For further information please contact
Mark Fearon, Director of Corporate Communications and IR
Mobile: +44 (0) 7711 875070
Mike Ward, Head of Corporate Communications
Mobile: +44 (0) 7984 417060
Brunswick (Media Enquiries)
Mike Harrison, Charlie Pretzlik
Tel: +44 (0)20 7404 5959
Investor conference call
A conference call with John Martin, Chief Executive will commence at 08.00 UK time today.
The call will be recorded and available on our website after the event www.wolseley.com.
Dial in number
UK: +44 (0)330 336 9105
Switzerland: +41 (0)22 567 5729
Please ask for the Wolseley call quoting 6464604.