UK-based Wolseley plc, parent company of Ferguson Enterprises, reported sales of £6.4 billion (US$9.5 billion) for its fiscal first half ended Jan. 31, up 10.3 percent. On a like-for-like basis, sales were up 7.8 percent.
Trading profit for the half was £390 million (US$580 million).
Growth was driven by market share gains and a record trading margin of 7.9 percent in the U.S. Better like-for-like sales growth in Europe was also reported, despite challenging markets, due to investment in sales and marketing activity to stimulate demand.
E-commerce growth was responsible for 13 percent of sales in the first half of 2015.
Seven bolt-on acquisitions were completed in the period with annualized sales of £57 million (US$84.7 million). Five further acquisitions have been completed since the period end with annualized sales of £70 million (US$104 million).
The company is also close to concluding the disposal of the French wood businesses and has commenced the sales process for the remaining French building materials business.
U.S.
Revenue for Wolseley’s U.S. business, including Ferguson, (76 percent of ongoing trading profit) was up 11.7 percent to £3.9 billion (US$5.8 billion) from last year on a like-for-like basis. On an actual basis, revenue was up 13.3 percent from the prior-year period.
Trading profit in the U.S. was up 21.9 percent.
Ferguson gained market share in all of its businesses. The renovation, maintenance, improvement (RMI), residential new construction, commercial and industrial markets all continued to grow steadily. Ferguson’s blended branches (locations that serve both residential and commercial customers) continued to grow across all significant regions from a combination of growing markets and good market share gains. The waterworks, industrial and B2C e-commerce businesses all grew very strongly during the first half, and Ferguson’s fire and fabrication and HVAC businesses also generated good growth.
Ferguson also closed six acquisitions in the first six months of the year, contributing 3 percent of additional revenue growth, including Pollard Water, an online waterworks business; Powell Pipe & Supply and McFarland Supply, both plumbing businesses; City Lights & Design, a lighting showroom, Global HVAC, and Ship Pac, a facilities maintenance packing business.
Canada
Canada sales (6 percent of ongoing trading profit) were up 1.8 percent compared to last year on a like-for-like basis and acquisitions contributed an additional 1 percent.
The company acquired Goodman Industrial, an industrial PVF business, with annualized revenue of £7 million (US$10.4 million), and added a further nine new branches.
UK
Revenue in the UK (10 percent of ongoing trading profit) was 1.9 percent ahead of the prior year on a like-for-like basis with acquisitions contributing an additional 4.1 percent revenue growth. New residential construction, which represents approximately 8 percent of UK revenue, continued to grow well but growth in residential RMI markets, which represents approximately 53 percent of UK revenue, remained subdued.
Nordics
Ongoing revenue in the Nordics (5 percent of ongoing trading profit) was up 3.3 percent on a like-for-like basis with acquisitions contributing 7.9 percent of additional revenue growth.
Market conditions remained subdued in Denmark, modest in Sweden and continued to be very challenging in Finland.
Central Europe
The Central Europe segment (3 percent of ongoing trading profit) comprises Wolseley's plumbing and heating businesses in Switzerland and the Netherlands. Like-for-like revenue declined by 1.5 percent and market conditions were challenging in Switzerland as a result of reduced activity in the construction market and currency volatility. Despite this, Wolseley held market share in the region.
Get more detail from Wolseley on its first-half 2015 results here.
