Wolseley pulls back from continental drift

The performance of plumbers merchant Plumb Center helped parent company Wolseley make up for deterioration in their European markets.

Group revenue for the nine months to April 30 2013 was £3.23bn, which reflects and 12% increase in the US business and an 11.2% improvement in the UK domestic business.

Trading profit rose 6.4% to £150 million.

In the Nordic region like-for-like revenue decreased by 7.3% as construction markets and consumer sentiment remained very weak across the region. Trading profit here of £6 million in the quarter was £1 million below last year.

Like-for-like revenue in France declined by 9.2% as new residential construction remained weak. We are making good progress executing the proposals outlined in the strategic review. Gross margins were slightly below last year and we continue to tightly control the cost base. Trading profit of £4 million was £1 million below last year.

In Central Europe like-for-like revenue declined by 4.6%. Switzerland grew modestly, though revenues were lower elsewhere in the region. The gross margin in the period was also slightly lower. Trading profit of £3 million in the quarter was £6 million below last year, the largest part of which related to Wood Solutions.

Pipe and Climate Center continued to be held back by weaker industrial markets but improved gross margins and tight cost control contributed to a better operating result. The integration of the Burdens acquisition and development of the B2C ecommerce business, along with one less trading day, had an impact on trading profit in the period, which was £2 million lower at £24 million.

Ian Meakins, chief executive said: “Wolseley continued to make decent progress in the third quarter, with good growth in the USA and the UK offsetting challenging conditions elsewhere in Europe. We held our gross margin overall and controlled costs to generate 7.9% trading profit growth in the ongoing business.

“We will continue to pursue operating efficiencies and remain focused on customer service, gaining market share and protecting our gross margins. We will manage the cost base of each of our businesses commensurate with market conditions while executing our growth initiatives in the more robust markets.”