Wolseley, the FTSE 100 distributor of plumbing and heating products, has seen like-for-like revenue growth of 5% in the three months to the end of October, compared to the same period of 2010.
However, in today's update Wolseley says some gaskets it supplied in the US and Canada were incorrectly labelled "non-asbestos". In fact, some customers have found they contain more than the 1% level at which they can be classified as "non-asbestos". The firm blames a former supplier called Lortech Rubber and says it is writing to "certain customers" to inform them of the mistake.
In trading terms total revenues were £3,641m. On a like-for-like basis Wolseley's biggest market, the USA, was 10% up on the equivalent quarter of 2010 with revenues of £1,531m and a trading profit of £99m, a rise of 24% on 2010. The second biggest region for Wolseley were the Nordic countries which saw like-for-like growth of 3% and trading profits up 11%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The UK was noticably weaker than the rest of the business with like-for-like revenues down 3% and trading profit shrinking by 20% (to £24m).
Wolseley has reduced net debt by £118m since the 31st of July and it now stands at £587m.
Gross margin has risen slightly, up to 27.1%, 0.1% ahead of 2010.
Commenting on the outlook for the rest of the year Wolseley's chief executive Ian Meakins warned: "Given continuing macroeconomic uncertainty, trading conditions may get tougher in the coming months. We will remain vigilant on costs and continue to drive performance improvements, strong cash conversion and better customer service."
So far in 2011 Wolseley shares have broadly mirrored the FTSE 100 and at the close yesterday were 6.13% down over the year since January.
BS
-
Barclays begins paying up to £100 compensation to customers after banking outageBarclays will pay up to £7.5 million in compensation to customers after its banking services were disrupted by an IT outage
-
Review: Shangri-La Paris – an ode to the world’s best foodNatasha Langan enjoys fine French and Chinese cuisine at the Shangri-La Paris
