ANALYST VIEWS | WAS WOLSELEY’S THIRD QUARTER TRADING PERFORMANCE IN LINE WITH EXPECTATIONS?
CAROLINE DE LA SOUJEOLE
As expected Wolseley’s third quarter trading performance was a mixed bag with continued high growth rates in North America and Europe still lagging: UK is still declining but the trends are improving…we leave our 2012 numbers unchanged, expecting adjusted EBIT of £647m and adjusted profit before tax of £587.3m.
This is a steady third quarter trading update from Wolseley. Its US operations are performing well, with market share gains supplementing slightly better markets; European markets are more difficult. With the shares at 12 month relative highs and trading on a full valuation, our stock preference remains elsewhere.
Third quarter profits are up 10 per cent year on year, which is a creditable performance…I’d expect consensus numbers to be broadly unchanged as US is better than most expected, and France and Nordic somewhat worse. We still like the shares for structural outperformance in US, and self-help potential in UK.