TIDMWOS
RNS Number : 0200R
Wolseley PLC
06 December 2016
6 December 2016
Interim Management Statement for the 3 months to 31 October
2016
GBP million Q1 Q1 Change Change Like-for-like
change(2)
2017 2016 (at
constant
exchange
rates)
================= ====== ====== ======= =========== ==============
Revenue - US 2,945 2,256 +30.5% +8.9% +4.2%
Revenue - other
regions 1,424 1,300 +9.5% (1.8%) (2.9%)
================= ====== ====== ======= =========== ==============
Revenue - total 4,369 3,556 +22.9% +5.2% +1.8%
Trading profit
(1) 303 250 +21.2% +1.4%
Trading days 66 65
Net debt 1,169 990
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 GBP303 million was 1.4% ahead of last year at constant exchange rates.
- Movements in foreign exchange rates increased revenue by
GBP599 million and trading profit by GBP48 million. Commodity price
deflation reduced revenue by 1.3%.
- Net debt at 31 October 2016 of GBP1,169 million, 1.0x EBITDA.
- Four acquisitions completed in the quarter, and one since the
quarter end, for total consideration of GBP216 million.
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 GBP4,369
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 GBP303 million was 1.4% higher than
last year at constant exchange rates. There was one more trading
day in the period which generated GBP6 million of additional
trading profit. Exchange rate movements increased revenue by GBP599
million and trading profit by GBP48 million.
(1) Before exceptional items and amortisation of
acquired intangibles.
(2) The increase or decrease in revenue excluding
the effect of currency exchange, acquisitions
and disposals, trading days and branch openings
and closures.
The regional performance was as follows:
GBP million Revenue Revenue Change Trading Trading Change
Q1 2017 Q1 (at profit profit (at
2016 constant Q1 2017 Q1 2016 constant
exchange exchange
rates) rates)
==================== ========= ======== ========== ========= ========= ==========
USA 2,945 2,256 +8.9% 251 196 +6.6%
UK 499 510 (2.1%) 17 19 (13.2%)
Nordic 582 503 (2.5%) 24 25 (18.6%)
Canada and Central
Europe 343 287 (0.3%) 21 22 (17.6%)
Central costs (10) (12)
==================== ========= ======== ========== ========= ========= ==========
Group 4,369 3,556 +5.2% 303 250 +1.4%
-------------------- --------- -------- ---------- --------- --------- ----------
Quarterly like-for-like revenue growth trends were as
follows:
Q1 Q2 Q3 Q4 Q1
2016 2016 2016 2016 2017
=========================== ======= ======= ======= ======= =======
USA +4.5% +4.0% +5.0% +3.1% +4.2%
UK (1.1%) (2.9%) (0.4%) (2.1%) (2.9%)
Nordic +5.5% +2.4% (2.6%) (2.3%) (2.9%)
Canada and Central Europe (2.8%) (1.7%) - +0.3% (2.7%)
=========================== ======= ======= ======= ======= =======
Group +3.2% +2.3% +2.8% +1.5% +1.8%
=========================== ======= ======= ======= ======= =======
USA
Ferguson, our US plumbing and heating business, grew revenue by
4.2% on a like-for-like basis, including price deflation of 2.4%.
Acquisitions contributed another 2.6% of revenue growth. All
businesses generated like-for-like revenue growth in the quarter
with good growth across residential and commercial markets.
Industrial like-for-like revenues recovered somewhat from last
year. Gross margins were ahead of last year and operating costs
were 10.9% higher at constant exchange rates, including 3.0% from
acquisitions. Trading profit of GBP251 million was GBP55 million
ahead of last year including GBP39 million due to favourable
exchange rate movements. Four acquisitions were completed in the
quarter, and one since the quarter end, with total annualised
revenue of GBP142 million.
UK
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 GBP17 million, was GBP2 million behind last year.
Employee consultation regarding the turnaround and repositioning
strategy announced in September is underway.
Nordics
In the Nordic region like-for-like revenue declined 2.9% as
construction markets deteriorated. Gross margins were weaker with
trading profit at constant exchange rates GBP5 million behind. The
favourable impact of exchange rates was GBP5 million. As announced
in September we have initiated a review of the Nordics operating
strategy, and this is progressing well. We will announce our
findings in the spring.
Canada and Central Europe
Like-for-like revenue in Canada and Central Europe was 2.7%
behind last year. Gross margins were weaker and operating costs
were 2.3% ahead at constant exchange rates. Trading profit of GBP21
million was GBP1 million behind last year including a GBP4 million
benefit from favourable exchange rates.
Financial position
Net debt at 31 October 2016 was in line with our expectations at
GBP1,169 million (31 October 2015: GBP990 million). The final
dividend of GBP167 million was paid to shareholders on 1 December
2016. Total acquisition investment in the period was GBP206 million
with a further GBP10 million since the quarter end. There have been
no other significant changes in the financial position of the
Group.
Outlook
Like-for-like revenue growth since the end of the quarter has
been in line with the first quarter results. Markets continue to be
mixed across the Group with some uncertainty in the economic
outlook. We remain confident that Wolseley will make further
progress in the year ahead and expect Group trading profit to be in
line with analyst expectations at current exchange rates.
For further information please contact
Wolseley plc
Dave Keltner, Interim Chief +41 (0) 41723
Financial Officer Tel: 2230
Mark Fearon, Director of Corporate +44 (0) 7711
Communications and IR Mobile: 875070
Mike Ward, Head of Corporate +44 (0) 7984
Communications Mobile: 417060
Brunswick (Media Enquiries)
+44 (0)20 7404
Michael Harrison, Nina Coad Tel: 5959
Investor conference call
A conference call with John Martin, Chief Executive and Dave
Keltner, Interim CFO, will commence at 09.00 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 9436
Switzerland: +41 (0) 22 567 5753
Ask for the Wolseley call quoting 8916246.
Wolseley plc is the world's largest specialist trade distributor
of plumbing and heating products to professional contractors and a
leading supplier of building materials, operating in North America,
the UK and Continental Europe. Revenue for the year ended 31 July
2016 was GBP14,430 million and trading profit was GBP917 million.
Wolseley has about 39,000 employees, is listed on the London Stock
Exchange
(LSE: WOS) and is in the FTSE 100 index of listed companies. For
more information, please visit www.wolseley.com or follow us on
Twitter https://twitter.com/wolseleyplc.
Financial Calendar
Half Year Results 28 March 2017
Q3 IMS 20 June 2017
Full Year Results 3 October 2017
Certain information included in this announcement is
forward-looking and involves risks, assumptions and uncertainties
that could cause actual results to differ materially from those
expressed or implied by forward-looking statements. Forward-looking
statements cover all matters which are not historical facts and
include, without limitation, projections relating to results of
operations and financial conditions and the Company's plans and
objectives for future operations, including, without limitation,
discussions of expected future revenues, financing plans, expected
expenditures and divestments, risks associated with changes in
economic conditions, the strength of the plumbing and heating and
building materials market in North America and Europe, fluctuations
in product prices and changes in exchange and interest rates.
Forward-looking statements can be identified by the use of
forward-looking terminology, including terms such as "believes",
"estimates", "anticipates", "expects", "forecasts", "intends",
"plans", "projects", "goal", "target", "aim", "may", "will",
"would", "could" or "should" or, in each case, their negative or
other variations or comparable terminology. Forward-looking
statements are not guarantees of future performance. All
forward-looking statements in this announcement are based upon
information known to the Company on the date of this announcement.
Accordingly, no assurance can be given that any particular
expectation will be met and readers are cautioned not to place
undue reliance on forward-looking statements, which speak only at
their respective dates. Additionally, forward-looking statements
regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the
future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules, the Prospectus
Rules, the Disclosure Rules and the Transparency Rules of the
Financial Conduct Authority), the Company undertakes no obligation
to update publicly or revise any forward-looking statement, whether
as a result of new information, future events or otherwise. Nothing
in this announcement shall exclude any liability under applicable
laws that cannot be excluded in accordance with such laws.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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