Wolseley profit slips

Plumbing merchant Wolseley said half year profit slipped as a strong performance in the US was outweighed by weakening demand in Europe and Canada.

Pre-tax profit slipped to £199m for the half year to January 31st 2013 from £250m the same time a year earlier. Revenue for the period fell to £6.3bn from £6.8bn before but like-for-like (LFL) revenue increased 2.2%.

Chief Executive Ian Meakins commented: "The highlight of these results is the strong performance across our US businesses with market share gains and productivity improvements. Canada and the UK have performed well in continued tough market conditions. We faced substantial headwinds in Europe, and are taking appropriate actions to protect profitability."

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Gross margin for the ongoing businesses increased to 27.8%. Net debt increased to £871m from £470m before. Trading profit of the ongoing businesses rose 7.6% from last year.

Looking ahead Meakins said LFL growth in the third quarter to date has been consistent with the second quarter overall.

"We continue to see strong growth in the USA, a broadly flat performance in Canada and the UK and very weak conditions in Europe. We will invest in growth opportunities where they are available and maintain tight control of the cost base in Europe, whilst implementing the strategic proposals we have outlined in France."

The dividend payment has been increased to 22p from 20p a year before.

CJ