Wolseley's UK revenue down by 2.9% in Q1

Wolseley has reported on first quarter trading, covering the three months ended 31st October. 

First quarter highlights

• Revenue 5.2% ahead of last year at constant exchange rates, including like-for-like growth of 1.8%.
• Gross margin of 28.3% was 0.3% ahead of last year.
• Trading profit of £303 million was 1.4% ahead of last year at constant exchange rates.
• Movements in foreign exchange rates increased revenue by £599 million and trading profit by £48 million. Commodity price deflation reduced revenue by 1.3%.
• Net debt at 31 October 2016 of £1,169 million, 1.0x EBITDA.
• Four acquisitions completed in the quarter, and one since the quarter end, for total consideration of £216 million.

UK Results

Like-for-like revenue in the UK was 2.9% lower than last year. Repairs, maintenance and improvement markets remained weak. Despite very competitive markets gross margins were ahead of last year and trading profit of £17 million, was £2 million behind last year. Employee consultation regarding the turnaround and repositioning strategy announced in September is underway.

See the full results publication here.  

Commenting on the results, John Martin, Chief Executive, said:

“US like-for-like revenue growth was 4.2% with commercial and residential markets continuing to grow well and industrial markets steadying. Good volume growth was partly offset by the ongoing impact of commodity price deflation which reduced the US revenue growth rate by 2.4%. Our other markets were more challenging as the UK heating market was weak and Nordic construction markets deteriorated. While revenue growth trends have improved slightly we continue to manage costs and productivity very carefully while continuing to drive customer service and strong cash conversion."

Group results

During the quarter the Group generated revenue of £4,369 million, 5.2% ahead of last year at constant exchange rates and 1.8% ahead on a like-for-like basis, including 1.3% price deflation. Trading profit of £303 million was 1.4% higher than last year at constant exchange rates. There was one more trading day in the period which generated £6 million of additional trading profit. Exchange rate movements increased revenue by £599 million and trading profit by £48 million.

The trading update follows the Group's September statement which confirmed plans to transform its Plumbing & Heating division. Wolseley UK’s proposals to transform its business are focused on three central building blocks: 1) Creating a well-defined offering to its customers, 2) a unified branch estate and single sales network, and 3) a new operating model.

Source : Wolseley PLC
www.wolseley.co.uk 

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