Headline figures don't tell the whole story about Wolseley (WOS). Adding back impairment and exceptional charges leaves first-half trading profits for the heating and plumbing supplier up 12 per cent at £390m, using constant exchange rates.
Over three-quarters of group trading profits are generated in the US, where steady growth in residential construction, repair and maintenance helped lift revenues by 12 per cent on a like-for-like basis. Acquisitions and the rising dollar added a further 3 percentage points to revenue growth, and trading margins rose to a record 7.9 per cent.
In the UK, which accounts for 10 per cent of turnover, organic growth of 1.9 per cent was boosted to 4.3 per cent by bolt-on acquisitions. However, the repair and maintenance residential market remains subdued. Competitive pricing in some areas also trimmed margins from 5.1 per cent to 4.4 per cent, and trading profits fell £5m to £43m.
Tough trading conditions in the Nordic region prompted management to reduce their expectations for the profitability of the DT Group acquired in 2006. An impairment charge of £245m was booked to reflect this.
Analysts at Numis are forecasting full-year adjusted pre-tax profits of £828m and EPS of 228p (from £725m/196p in 2014).
| WOLSELEY (WOS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4,077p | MARKET VALUE: | £10.6bn | |
| TOUCH: | 4,077-4,080p | 12-MONTH HIGH: | 4,242p | LOW: 2,966p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 952p* | NET DEBT: | 49% | |
| Half-year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 6.1 | 312 | 84.0 | 27.5 |
| 2015 | 6.4 | 103 | 4.6 | 30.25 |
| % change | +6 | -67 | -95 | +10 |
Ex-div: 2 Apr Payment: 30 Apr *Includes intangible assets of £995m, or 383p a share | ||||
