'Tough times' ahead for Wolseley despite revenue rise

THE chief executive of building supplies group Wolseley has warned of tough times ahead despite a rise in revenues and gross profit.

Ian Meakins said today the company "remained vigilant" on costs as it announced a 5% climb in turnover and profit.

In an interim management statement for the three months to October 31, 2011, revenue has climbed from £3.47bn to £3.64bn while gross profit has risen from £938m to £988m year-on-year.

Wolseley operates brands such as Plumb Center, Climate Center and Pipe Center, all of which are headquartered in Leamington Spa, and during the summer it sold two of its other Warwickshire companies, Electric Center and Build Center.

Its trading profit for this period was also up year-on-year from £159m to £185m, a rise of 16%.

It said in a statement today gross margin was 27.1% and adjusted net debt sat at £587m, £118m lower than at the end of July following the disposals.

It added that it had completed two acquisitions in the quarter and one in November, in the USA, with aggregate annual revenue of £88m for consideration of £29m.

Mr Meakins said: "Wolseley has continued to grow well, with strong growth in the USA offset by lower growth in some of our European businesses.

"Given continuing macroeconomic uncertainty, trading conditions may get tougher in the coming months.

"We will remain vigilant on costs and continue to drive performance improvements, strong cash conversion and better customer service.

"Our balance sheet is strong and the group is well positioned to continue to invest selectively where we can generate good returns."

Source : Tamlyn Jones – The Business Desk West Midlands
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