Shares in Wolseley (WOS) fell 13 per cent after the heating and plumbing supplier warned that weakness in industrial markets in North America is expected to continue, while competitive pressure will keep the UK heating market subdued.
Around three-quarters of group trading profit is generated in the US. Here the plumbing and heating business Ferguson grew like-for-like sales by 10 per cent in the year to July, with margins up from 7.7 per cent to a record 8.2 per cent. However, industrial markets, which account for 15 per cent of US sales, were hit in the second half by weakness in the oil and gas sectors and the strong dollar. Even so, US operating profit rose by a quarter to £660m.
In the UK, which contributes 10 per cent of group turnover, like-for-like revenue growth was 3.6 per cent as strength in the new housing sector was offset by a weak repair and maintenance market. UK operating profit slipped 30 per cent to £79m.
At group level, reported profit was hit by a £238m impairment charge on the group's Nordic assets, and an exceptional charge of £123m on the now discontinued French operation.
Following 3 per cent downgrades, broker Numis Securities expects pre-tax profit of £910m in the year to July 2016, giving EPS of 250p (FY 2015: £831m and 231p).
| WOLSELEY (WOS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,685p | MARKET VALUE: | £9.6bn | |
| TOUCH: | 3,684-3,686p | 12-MONTH HIGH: | 4,398p | LOW: 2,990p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 1,002p* | NET DEBT: | 31% | |
| Year to 31 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p)** | Dividend per share (p)** |
|---|---|---|---|---|
| 2011 | 13.6 | 391 | 96 | 43.5 |
| 2012 | 13.4 | 198 | 21 | 58.1 |
| 2013 | 13.2 | 460 | 103 | 63.9*** |
| 2014 | 12.3 | 676 | 182 | 82.5 |
| 2015 | 13.3 | 508 | 124 | 90.8 |
| % change | +9 | -25 | -32 | +10 |
Ex-div: 22 Oct Payment: 3 Dec *Includes intangible assets of £1.01bn, or 390p a share **Adjusted for 30-for-31 share consolidation ***Excludes 110p per share special dividend | ||||
