US construction revival boosts Wolseley's profits
Wolseley, the plumbing and heating specialist, has hailed a recovery in the US construction market for a jump in first-quarter profits, although it has shed more jobs at its UK business after challenging trading.
The group, which runs the Plumb Center chain in the UK, also said "all options are possible", including a sale, joint venture or turnaround for its struggling French business, as part of the ongoing strategic review.
Wolseley – half of whose group revenues are generated in the US – said sales had also fallen at its Nordic operation.
But these weaknesses in Europe were more than offset by a strong performance in the US and Canada, partly reflecting the more robust housing, infrastructure and construction sectors across the pond.
North America helped Wolseley to grow group trading profits by 7.6 per cent to £198m over the three months to 31 October. John Martin, Wolseley's finance director, said its performance in the US had been "pretty broadly based, from coast to coast".
Wolseley's American operation grew profits by 23 per cent to £122m, on total revenues up 10 per cent to £1.68bn.
The company said its US Waterworks business, which specialises in water projects in the construction sector, "took market share strongly, holding its gross margin and improving its trading performance".
Mr Martin said its Blended Branches business, which sells kitchens and bathrooms in the US, also did well.
In the UK, Wolseley grew profits by 4 per cent to £24m, but underlying sales fell 0.3 per cent. The group said its UK headcount was 148 lower than in July because of its not replacing staff who have left.
The group cited "weak demand" in the heating market for Plumb Center, which sells boilers and radiators.
Underlying sales tumbled at its French business by 8.2 per cent, and they slipped 4.8 per cent in the Nordic region.
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