Foreign purchases lead Wolseley surge

SHARES in Wolseley jumped 73p to 975p yesterday after the builder's and plumber's merchant announced an 83 per cent rise in pre- tax profits for the six months to January.

The interim profit of pounds 87m was well ahead of market forecasts of between pounds 65m and pounds 70m.

Jeremy Lancaster, chairman and managing director, said the company had been boosted by increased activity in the UK and US and the acquisitions during the past 12 months of Enertech, a European boiler maker, and Erb, a US lumber distributor.

Enertech, bought in April 1993, contributed pounds 10m while the acquisitions since July returned pounds 4.6m. A better dollar exchange rate added pounds 4.1m to profits.

In France, building distribution shrugged off a static economy to increase sales by 7 per cent. In the UK, Builder Center returned to the black and sales rose 12 per cent. Profits were up from pounds 22.7m to pounds 35.1m.

Mr Lancaster warned that the 65 per cent jump in profits to pounds 30.2m at the US distribution operation would not be repeated in the second half. But he said the acquisition of Erb had been more successful than expected and added that the trading loss of the Californian operation had almost been eliminated.

The third leg, European manufacturing, enjoyed a 76 per cent increase in profits to pounds 18.9m, mainly thanks to the contribution from the Enertech companies. Again, Mr Lancaster warned that a similar rate of growth could not be expected in the second half as Enertech made most of its profit in the first half.

Earnings per share increased by 72 per cent to 22.1p from 12.9p, and the interim dividend rose a third to 4.72p.