Europe a drag for Wolseley

Plumbers' merchant Wolseley has seen like-for-like growth slow down in its fiscal third quarter as it runs up against tougher comparatives from last year.

Revenue in the three months to April 30th was up 4.7% to £3,069m from £2,930m in the fiscal third quarter of last year, but like-for-like (LFL) growth was only 3.8%, versus LFL growth of 5% in the first half of the financial year.

Trading profit in the quarter shot up 10.3% to £139m from £126m. Gross margin of 27.7% was the same as in the corresponding quarter of last year while operating costs were 3.6% higher.

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The company nearly buckled under the weight of its own debt in the credit crunch so shareholders will be comforted to see the net debt slashed to £277m from £591m a year earlier, as the group continues its policy of selling off non-core assets.

"Wolseley has continued to make decent progress in the third quarter, with good growth in the USA and Canada partly offset by Europe," revealed Ian Meakins, Chief Executive of Wolseley.

"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," he added.

JH