International builders' merchant Wolseley (WOS) has announced plans to restructure its troubled French business, which moved into the red during the first half. Wolseley is to dispose of over two-fifths of its French branches and will set about restructuring the rest. That action accounted for £63m of a £87m first-half exceptional charge and the unit made a £7m loss following a 10.4 per cent fall in like-for-like revenue.
Fortunately, France generates just 8 per cent of group sales. Wolseley's biggest market is actually the US, which generates just over half of sales, and business there is buoyant. Indeed, US like-for-like sales grew 8.3 per cent to £3.2bn and trading profits rose 29 per cent to £223m, helped by a margin increase from 6.2 per cent to 7 per cent. The UK, generating 14 per cent of sales, and Canada (7 per cent) produced decent profit growth, too - up 2.3 per cent and 12 per cent respectively, in flat markets. However, the Nordic business saw profits slip 15 per cent, reflecting ongoing economic weakness. Overall like-for-like sales rose 2.2 per cent and trading profits from the ongoing businesses rose 7.6 per cent to £324m.
Broker Panmure Gordon forecasts full-year pre-tax profit of £684m, giving EPS of 178p (164.2p in 2012).
| WOLSELEY (WOS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,135p | MARKET VALUE: | £8.6bn | |
| TOUCH: | 3,131-3,135p | 12-MONTH HIGH: | 3,354p | LOW: 2,111p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 1011 | |
| NET ASSET VALUE: | 997p* | NET DEBT: | 32% | |
| Half-year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 6.84 | 250 | 63.6 | 20.0 |
| 2013 | 6.28 | 199 | 45.5 | 22.0 |
| % change | -8 | -20 | -28 | +10 |
Ex-div: 3 Apr Payment: 1 May *Includes intangible items of £1.2bn, or 455p a share | ||||
