Wolseley set to make acquisitions as profits increase

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PLUMBING supplies group Wolseley is looking to buy more businesses in its core markets of the US, Britain and Canada, after posting an 8.8 per cent rise in first-half trading profit.

The company’s performance was lifted by stronger trading in the US, Britain and the Nordic region.

The company, which operates the Plumb Center and Ferguson chains in the US and Britain, reported trading profit of £360m for its ongoing business in the six months to the end of January 2014, on group revenue of £6.52bn, up from £6.28bn in the same period 2013. Pre-tax profit was £316m, up from a restated £193m for the same period last year.

“We delivered a good performance in our US and UK businesses, achieving decent revenue growth and an improvement in underlying gross margins,” said chief executive Ian Meakins.

The group also raised its interim dividend to 27.5p per share, 25 per cent higher than last year.

Mr Meakins said the firm was aiming to lift market share with so-called “bolt-on” deals to boost its existing business.

“The acquisition pipeline is looking a bit more interesting again,” Mr Meakins said yesterday.

“We have a pipeline of 
around £300m over the coming period.

“We expect to convert around half of that, so there are four or five deals in there that are interesting,” he added.

Acquisitions contributed £2m to Wolseley’s trading profit last year and 0.8 per cent to revenue growth.

Revenue in the US market, which accounts for 53 per cent of the total, was up 6.2 per cent on the year before.

Revenue was up 3.2 per cent in the UK and 2.6 per cent in continental Europe.

“Wolseley’s numbers are in line with expectations if not a tad ahead... The 8.8 per cent increase in trading profit is welcome progress,” said Whitman Howard analyst Stephen Rawlinson.

Wolseley employs around 360 staff in Ripon, North Yorkshire.