Wolseley trading profit up 10 per cent

Improves trading performance in all geographic regions except France.

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The British plumbing and building materials supplier Wolseley has posted a trading profit of £139m for the third quarter ended 30 April 2012, an increase of 10.3 per cent compared to £126m for the same period last year.

The trading margin improved to 4.5 per cent (2011: 4.3 per cent).

During the quarter, the group generated revenue of £3.07bn, an increase of 4.7 per cent compared to same period in 2011. The impact of inflation on group revenue was approximately 2 per cent.

Net debt reduced to £277m from £591 last year, while operating costs were 3.6 per cent higher than last year.

The company generated revenue growth of 11.6 per cent in the US, 5.5 per cent in Canada, 0.1 per cent in the UK, 4 per cent in the Nordic region, and 1.9 per cent in Central Europe. Revenue in France was reduced by 1.5 per cent in France during the quarter.

Despite a continuing tough pricing environment, the group’s gross margin was unchanged at 27.7 per cent.

According to the company, like-for-like revenue in the UK excluding last year’s contract loss was 1.9 per cent driven by Plumb and Parts Center which also improved gross margins, despite weaker demand. Pipe and Climate Center and Drain Center performed well generating good growth.

Ian Meakins, chief executive of Wolseley, said: “Wolseley has continued to make decent progress in the third quarter, with good growth in the US and Canada partly offset by Europe. We held our gross margin overall and controlled costs to generate 10 per cent 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. Given the uncertain economic outlook in Europe we will remain vigilant on the cost base while continuing to drive growth initiatives in the more robust markets.”