Say goodbye to the Wolseley (WOS) you used to know, and say hello to Ferguson, the plumbing and heating giant's new name. That just happens to be the name of the US business that generates 84 per cent of group trading profits, against just 7 per cent from the UK. In a move that could yet preface the group moving its listing across the pond, future earnings will be denominated in US dollars. It's also selling off its Nordic business.
The six months to the end of January 2017 saw Wolseley continue its bolt-on philosophy, making eight acquisitions costing £271m, with annualised revenue of £214m. Two further bolt-ons were made after the half-year-end.
Turnover at Ferguson grew by 5.4 per cent on a like-for-like basis, with acquisitions contributing an additional 2.5 percentage points. Residential and commercial markets were both strong, with e-commerce business significantly higher. Trading profits grew from £345m to £450m, of which £68m reflected the weakness of sterling against the dollar. Even so, profits were ahead by 9 per cent on a constant currency basis.
A £102m impairment against the Nordic business dragged down pre-tax profits. Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to July 2017 of £1.01bn and EPS of 288p (up from £876m and 254p in 2016).
| WOLSELEY (WOS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 5,265p | MARKET VALUE: | £13.3bn | |
| TOUCH: | 5,260-5,265p | 12-MONTH HIGH: | 5,285p | LOW: 3,489p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 1,223p* | NET DEBT: | 42% | |
| Half-year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 6.80 | 367 | 104 | 33.28 |
| 2017 | 8.46 | 328 | 83.7 | 36.67 |
| % change | +25 | -11 | -19 | +10 |
Ex-div: 6 Apr Payment: 28 Apr *Includes intangible assets of £1.2bn, or 474p a share | ||||
