Builders and plumbers merchant group Wolseley saw revenues rise nearly 5%, as strength returned to its US and UK markets.
Pre-tax profits were £473m for the year to July 31, up from £198m last time on turnover up to £12,854m from £12,345m (2.9% on a like-for-like basis).
Trading profit in the ongoing businesses was £725 million (2012: £655 million), 10.7% ahead of last year. The trading margin for the ongoing business increased to 5.6% (2012: 5.3%). There were two fewer trading days in the year which reduced trading profit by £10 million. In the year ending 31 July 2014 the number of trading days will be in line with 2013. Foreign exchange movements increased trading profit by £5 million in the year.
The UK business saw revenue growth of more than 5% in the final two quarters of the year as it returned a turnover of £1,769m for the year and an operating profit of £95m.
Plumb and Parts Center increased market share as did Pipe and Climate Center though growth was held back by weaker industrial markets.
Wolseley’s UK analysis said: “Gross margins were down on last year due to the dilutive impact of the Burdens acquisition in January and a challenging pricing environment.
“Operating expenses were 2% lower when excluding the impact of the Burdens acquisition and 2% higher on an ongoing basis. Headcount in the ongoing business increased by 52.
“Trading profit for the ongoing business of £95 million was £2 million ahead of last year, principally due to one-off property gains.
“The trading margin was 5.7% excluding the impact of the Burdens acquisition and on an ongoing basis was 5.4% (2012: 5.6%).”
Revenue in the USA was 8.2% ahead of last year on a like-for-like basis including price inflation of approximately 1%. The RMI segment remained resilient and the recovery in levels of new residential construction continued.
Ian Meakins, Chief Executive, said: “The highlight of these results was another strong performance across our US business where we achieved good revenue growth and the trading margin of 7.3 per cent was ahead of the previous peak achieved in 2007. This was a fitting tribute to Ferguson in its 60th year. Canada and the UK performed well in tough market conditions. We continued to face substantial headwinds in Europe and took decisive action to protect profitability with significant headcount reductions in the year. Gross margins were ahead and our ongoing focus on operational efficiency has delivered further improvements in the trading margin of the ongoing business, now up to 5.6 per cent.”
“In the year ahead we plan to increase our investments where there are growth opportunities, and in technology and processes to develop more efficient business models. This will improve the leverage in our business and generate good growth in the future.”