Builders and plumbers merchant group Wolseley saw full year sales fall, though the second half of the year improved so much that the group is planning to resume a dividend payment at the half-year.
Results for the year to 31 July 2010 show group revenue of £13.2bn, down 9% from last year’s £14.4bn, with trading profit moreorless flat at £450m.
Revenue in the UK, which accounts for 19% of group turnover was also down 9%, thanks mainly to the number of branch disposals and closures.
UK trading profit was £91m, £36m ahead of getting out of the Irish market. Gross margins were badly affected, although helped considerably by the restructuring of the previous year to reduced the cost base. Both Plumb Center and Parts Center performed ahead of the previous year. Even the previously loss-making Build Center strongly improved its trading performance and returned to profit in the period.
The trading margin for the UK was higher at 3.7% and like-for-like revenue growth was 5%. The company reports seeing a continuation of the gradual recovery in the more resilient RMI sector, which accounts for around 65% of revenue. The commercial and industrial markets have been “relatively weak” throughout the period.
Chief executive Ian Meakins said: “In the second half of 2010 an improvement in like-for-like revenue growth, continued cost discipline and a consistent focus on protecting gross margins delivered results ahead of expectations. Recognising this improved performance the Board intends to resume dividends at the half year results.
He added that the group will continue to do what is needed to strengthen the business and that it is expected that overall recovery will remain weak as activity levels are held back by fragile consumer confidence and low availability of credit. In addition, public sector activity, which represents around 25% of our UK revenue, may come under pressure later in the year, following the Government’s spending review in October 2010.
“Whilst overall we remain cautious about the outlook for our markets, we are confident that Wolseley will make good progress in the year ahead.”