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Wolseley's H1 profit slips; upbeat on US trading

28 March 2017 07:38

Wolseley said it expected to achieve further progress in H2 as it turned in a lower H1 pretax profit accompanied by a rise in interim dividend, and unveiled a name change to Ferguson Plc.

Pretax profit for H1 was £328m, from £367m. Its revenue rose to £8.5m, from £6.8m. Interim dividend was 36.76p a share, up from 33.28p.

CEO John Martin said Wolseley delivered a good trading performance in the first half, driven by US-subsidiary Ferguson Enterprises.

"In the US, residential and commercial markets remained good and industrial markets improved but were still negative. Commodity price deflation reduced US revenue growth by 1.8 per cent in the first half," it said. Martin added that the UK transformation programme had started well and was are making good progress clarifying customer propositions and simplifying the logistics network.

"We have concluded our review of the Nordic operating strategy and identified a clear and executable plan to return the business to profitable growth," he said in a statement.

"However, there are few synergies with the rest of the Group's plumbing and heating businesses and we have initiated a process to exit our business in the region. We have excellent opportunities to generate attractive returns in our other businesses and we will focus resources there in the future."

Martin said Ferguson now accounted for 84% of group trading profit and that Wolseley had decided to align the group's name with its most significant brand in our largest market.

"Whilst the Group will be known as Ferguson plc going forward we will continue to use the Wolseley name in the UK and Canada where it has strong local recognition."

The CEO continued that like-for-like revenue growth since the end of the period was about 4.5% for the group and 5.5% in the US.

"Commodity deflation has been negligible in this period. We continue to execute our strategy of investing in profitable growth and expansion where appropriate while keeping tight control of the cost base. We expect the Group to make further progress in the second half."

Separately, Wolseley announced Frank Roach had indicated his intention to retire as CEO of Ferguson Enterprises and as an executive director of the group on 31 July 2017. He would be succeeded by Kevin Murphy

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