With no repeat of the £245m impairment charge booked in the same period last year on the group's Nordic operation, headline figures for Wolseley (WOS) were predictably brighter in the first half. But the world's largest specialist trader of plumbing and heating products still experienced mixed fortunes in its trading regions. Overall, trading profits from ongoing operations at constant exchange rates grew a modest 2.3 per cent to £410m.
Over 80 per cent of trading profits are generated in the US, where its plumbing and heating business Ferguson pushed revenue ahead by 4.3 per cent on a like-for-like basis, with acquisitions contributing an additional 2.1 per cent of growth. Residential and commercial markets continued to grow, but industrial markets, some 15 per cent of Ferguson's revenue in the year to July 2015, continued to be hit by weakness in the oil and gas sector.
The UK side of the business accounts for just 8 per cent of group trading profit, and like-for-like turnover fell by 2 per cent, mainly as a result of weakness in the non-housing repair and maintenance market, as local authorities cut back on spending. Trading elsewhere saw weaker revenue in Canada and Central Europe, while like-for-like revenue from the Nordic region grew by 4.2 per cent.
Analysts at Numis Securities are forecasting pre-tax profits for the year to July 2016 of £889.7m and EPS of 245p (from £831.4m/231p in 2015).
| WOLSELEY (WOS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,850p | MARKET VALUE: | £9.83bn | |
| TOUCH: | 3,848-3,850p | 12-MONTH HIGH: | 4,398p | LOW: 3,214p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 1,064p* | NET DEBT: | 46% | |
| Half-year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 6.44 | 103 | 4.6 | 30.25 |
| 2016 | 6.80 | 367 | 103.5 | 33.28 |
| % change | +5 | +256 | +2150 | +10 |
Ex-div: 31 Mar Payment: 29 Apr *Includes intangible assets of £1.1bn, or 434p a share | ||||
