TIDMWOS
RNS Number : 5308I
Wolseley PLC
20 June 2017
20 June 2017
Interim Management Statement for the 3 months to 30 April
2017
GBP million Q3 2017 Q3 2016 Change Change Like-for-like
(2) (at constant change
exchange (3)
rates)
================ ======== ======== ======= ============== ==============
Revenue 4,270 3,658 +16.7% +4.6% +6.6%
Trading profit
(1) 254 232 +9.5%
Trading days 63 65 (2)
Net debt 1,132 1,131
Third quarter highlights
- Like-for-like revenue growth of 6.6%. Exchange rate movements
increased revenue by GBP423 million.
- Gross margin of 28.5% was 0.1% ahead of last year.
- Trading profit of GBP254 million. Exchange rate movements
increased trading profit by GBP29 million and two fewer trading
days reduced trading profit by GBP17 million.
- Net debt at 30 April 2017 of GBP1,132 million, in line with last year.
- Three acquisitions completed in the quarter for total consideration of GBP21 million.
- Completed merger of Tobler with Walter Meier on 6 April 2017.
- Sold Endries, a small US fasteners business, for net proceeds
of GBP186 million on 1 June 2017.
- Change of Group name to Ferguson plc approved by shareholders
and will take effect on 31 July 2017.
Commenting on the results, John Martin, Chief Executive,
said:
"Revenue growth in the quarter was good with US residential and
commercial markets growing well and industrial markets improving.
The Nordics returned to growth and the UK was broadly flat.
"Since the end of the period revenue growth has been broadly in
line with the third quarter, gross margins and cost control have
been good. The Group expects trading profit for the full year to be
in line with current analyst consensus expectations."
Group results
During the quarter the Group generated revenue of GBP4,270
million, 4.6% ahead of last year at constant exchange rates and
6.6% ahead on a like-for-like basis. Trading profit of GBP254
million included a GBP29 million favourable impact from exchange
rate movements. There were two fewer trading days in the period
which reduced trading profit by GBP17 million and there will be one
more day in the fourth quarter compared to the same quarter last
year. In the third quarter a GBP30 million exceptional charge was
incurred as a result of restructuring in the UK and Nordic
regions.
1) Before exceptional items and the amortisation
and impairment of acquired intangibles.
2) Trading profit for the three months to 30 April
2016 has been restated to exclude GBP2 million
of restructuring costs classified as exceptional.
3) The increase or decrease in revenue excluding
the effect of currency exchange, acquisitions
and disposals, trading days and branch openings
and closures.
Three months to 30 April by region
GBP million Revenue Currency Trading Growth Revenue
Q3 exchange days / (Decline) Q3 2017
2016 impact impact
================= ======== ========== ======== ============= =========
USA 2,414 352 (84) 321 3,003
UK 529 - (16) (7) 506
Nordics 457 40 (17) 4 484
Canada and
Central Europe 258 31 (9) (3) 277
=================== ======== ========== ======== ============= =========
Group 3,658 423 (126) 315 4,270
------------------- -------- ---------- -------- ------------- ---------
GBP million Trading Currency Trading Growth Trading
profit exchange days / (Decline) profit
Q3 impact impact Q3 2017
2016
================= ======== ========== ======== ============= =========
USA 204 29 (12) 6 227
UK 26 - (3) - 23
Nordics 7 - (1) (1) 5
Canada and
Central Europe 7 - (1) 3 9
Central costs (12) - - 2 (10)
=================== ======== ========== ======== ============= =========
Group 232 29 (17) 10 254
------------------- -------- ---------- -------- ------------- ---------
Quarterly like-for-like revenue growth trends were as
follows:
Q3 Q4 Q1 Q2 Q3
2016 2016 2017 2017 2017
=========================== ======= ======= ======= ======= =======
USA +5.0% +3.1% +4.2% +6.7% +8.5%
UK (0.4%) (2.1%) (2.9%) +3.6% (0.4%)
Nordics (2.6%) (2.3%) (2.9%) (1.5%) +4.3%
Canada and Central Europe - +0.3% (2.7%) +0.3% +5.1%
=========================== ======= ======= ======= ======= =======
Group +2.8% +1.5% +1.8% +4.8% +6.6%
=========================== ======= ======= ======= ======= =======
USA
Ferguson, our US plumbing and heating business, grew revenue by
8.5% on a like-for-like basis. There was no significant impact from
price inflation in the period. Acquisitions contributed another
2.8% of revenue growth. All businesses generated like-for-like
revenue growth in the quarter with good growth across residential
and commercial markets and industrial markets improving. Gross
margins were broadly consistent with last year and operating costs
were 12.3% higher at constant exchange rates, including 3.6% from
acquisitions. Trading profit of GBP227 million was GBP23 million
ahead of last year including a GBP29 million favourable impact from
exchange rate movements and a GBP12 million negative impact from
two fewer trading days. Three acquisitions were completed in the
quarter, with total annualised revenue of GBP39 million. During the
quarter we sold Endries, a small fasteners business, for GBP186
million.
UK
Like-for-like revenue in the UK was 0.4% lower than last year
including inflation of 3%. Repairs, maintenance and improvement
markets remained weak. Gross margins were slightly ahead of last
year and trading profit of GBP23 million was GBP3 million behind
last year due to two fewer trading days. We continued to make good
progress with the transformation strategy announced in September
2016.
Nordics
Like-for-like revenue in the Nordics was 4.3% ahead of last
year. Gross margins were weaker and operating costs were in line.
Trading profit of GBP5 million was GBP2 million behind last year
including a GBP1 million negative impact from fewer trading
days.
Canada and Central Europe
Like-for-like revenue in Canada and Central Europe was 5.1%
ahead of last year. Gross margins were in line and operating costs
were 7.9% lower at constant exchange rates. Trading profit of GBP9
million was GBP2 million ahead of last year including a GBP1
million impact from fewer trading days. As previously announced the
merger of Tobler with Walter Meier in Switzerland was completed on
6 April 2017 and Wolseley now owns 39.2% of the combined
business.
Nine months trading performance
GBP million Revenue Revenue Change Trading Trading Change
2017 2016 (at profit profit (at
9 months to 30 constant 2017 2016 constant
April 2017 exchange (2) exchange
rates) rates)
(1) (1)
==================== ======== ======== ========== ======== ======== ==========
USA 8,763 6,795 +9.4% 678 549 +4.8%
UK 1,517 1,525 (0.5%) 58 63 (7.9%)
Nordics 1,520 1,342 (1.4%) 21 30 (40.4%)
Canada and Central
Europe (CCE) 931 791 (0.2%) 43 37 (3.0%)
Central costs (31) (34)
==================== ======== ======== ========== ======== ======== ==========
Group 12,731 10,453 +6.0% 769 645 +2.1%
-------------------- -------- -------- ---------- -------- -------- ----------
1) Trading days were consistent in 2016 and 2017.
2) Trading profit for the nine months to 30 April
2016 has been restated to exclude GBP5 million
of restructuring costs classified as exceptional.
These results above include the following businesses being sold
or merged that will not be included in the ongoing results at 31
July 2017:
GBP million Revenue Revenue Trading Trading
2017 2016 profit profit
9 months to 30 2017 2016
April 2017
====================== ======== ======== ======== ========
Nordics (being
sold) 1,520 1,342 21 30
USA - Endries (sold
on 1 June 2017) 151 122 14 9
CCE - Tobler (merged
on 6 April 2017) 175 174 11 12
====================== ======== ======== ======== ========
Financial position
Net debt at 30 April 2017 was in line with our expectations at
GBP1,132 million (30 April 2016: GBP1,131 million). The interim
dividend of GBP92 million was paid to shareholders on 28 April
2017. Total acquisition consideration in the quarter was GBP21
million and GBP94 million was received on the merger of Tobler with
Walter Meier. Since the period end we have received net proceeds of
GBP186 million relating to the disposal of Endries, our small US
fasteners business. There have been no other significant changes in
the financial position of the Group.
Group name change
On 23 May 2017 shareholders approved a resolution to change the
name of the Group to Ferguson plc which will become effective on 31
July 2017. The Group will continue to maintain the Wolseley trading
name in the UK and Canada where it has strong local recognition. As
previously announced, we will also change the presentational
currency of the Group to US dollars from 1 August 2017.
Board changes
As previously announced Mike Powell joined the Group as Chief
Financial Officer on 1 June 2017. Mike joined from BBA Aviation plc
where he served as the Group Finance Director.
As announced on 8 June 2017 Nadia Shouraboura has been appointed
to the Board as a Non-Executive Director effective from 1 July
2017. Nadia, a US Citizen, was formally a Vice President at
Amazon.com, Inc. After eight years at Amazon, she founded Hointer
Inc., a Seattle based consultancy that helps retailers create
innovative in-store experiences. She is also a Non-Executive
Director of Cimpress NV, which provides physical and digital
marketing products for small businesses.
Outlook
Since the end of the period revenue growth has been broadly in
line with the third quarter, gross margins and cost control have
been good. The Group expects trading profit for the full year to be
in line with current analyst consensus expectations.
For further information please contact
Wolseley plc
Mark Fearon, Director of Corporate +44 (0) 7711
Communications and IR Mobile: 875070
Mike Ward, Head of Corporate +44 (0) 7984
Communications Mobile: 417060
Brunswick (Media Enquiries)
+44 (0)20 7404
Michael Harrison, Charlie Pretzlik Tel: 5959
Investor conference call
A conference call with John Martin, Chief Executive will
commence at 08.00 UK time today. The call will be recorded and
available on our website after the event www.wolseley.com.
Dial in number UK: +44 (0)330 336 9105
Switzerland: +41 (0)22 567 5729
Ask for the Wolseley call quoting 6464604.
Wolseley plc is the world's largest specialist trade distributor
of plumbing and heating products to professional contractors
principally operating in North America and the UK. Revenue for the
year ended 31 July 2016 was GBP14,430 million and trading profit
was GBP917 million. Wolseley has about 39,000 employees, is listed
on the London Stock Exchange (LSE: WOS) and is in the FTSE 100
index of listed companies. On 23 May 2017 shareholders approved a
resolution to change the name of the Group to Ferguson plc which
will become effective on 31 July 2017. For more information, please
visit www.wolseley.com or follow us on Twitter
https://twitter.com/wolseleyplc.
Financial Calendar
Name change to Ferguson 31 July 2017
plc
Full Year Results 3 October 2017
Annual general meeting 28 November 2017
Q1 IMS for the period ending 5 December 2017
31 October 2017
Certain information included in this announcement is
forward-looking and involves risks, assumptions and uncertainties
that could cause actual results to differ materially from those
expressed or implied by forward-looking statements. Forward-looking
statements cover all matters which are not historical facts and
include, without limitation, projections relating to results of
operations and financial conditions and the Company's plans and
objectives for future operations, including, without limitation,
discussions of expected future revenues, financing plans, expected
expenditures and divestments, risks associated with changes in
economic conditions, the strength of the plumbing and heating and
building materials market in North America and Europe, fluctuations
in product prices and changes in exchange and interest rates.
Forward-looking statements can be identified by the use of
forward-looking terminology, including terms such as "believes",
"estimates", "anticipates", "expects", "forecasts", "intends",
"plans", "projects", "goal", "target", "aim", "may", "will",
"would", "could" or "should" or, in each case, their negative or
other variations or comparable terminology. Forward-looking
statements are not guarantees of future performance. All
forward-looking statements in this announcement are based upon
information known to the Company on the date of this announcement.
Accordingly, no assurance can be given that any particular
expectation will be met and readers are cautioned not to place
undue reliance on forward-looking statements, which speak only at
their respective dates. Additionally, forward-looking statements
regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the
future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules, the Prospectus
Rules, the Disclosure Rules and the Transparency Rules of the
Financial Conduct Authority), the Company undertakes no obligation
to update publicly or revise any forward-looking statement, whether
as a result of new information, future events or otherwise. Nothing
in this announcement shall exclude any liability under applicable
laws that cannot be excluded in accordance with such laws.
-ends-
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