US growth helps Wolseley to counter weak sales in Europe
WOLSELEY, the world’s biggest building supplies company, posted a rise in third quarter profits yesterday, but weaker-than-expected third-quarter sales in Europe sent shares down two per cent.
The owner of the Plumb Centre and Ferguson chains in Britain and the United States said trading profits rose 10.3 per cent to £139m for the three months to 30 April. This was fuelled by a strong performance from North America, where like-for-like sales grew by 9.4 per cent in the US and 7.9 per cent in Canada.
Its industrial business in Canada was particularly strong as it continued to benefit from the buoyant oil, gas and mining sectors.
But this was offset by tough trading conditions in Europe, particularly in France, where like-for-like sales fell 6.1 per cent as new construction markets weakened.
The company warned that the end of recent government stimulus activity would have an effect on activity levels going forward.
Like-for-like revenues also fell by 1.7 per cent in Nordic countries and were flat in Central Europe as price deflation on euro-sourced products in Switzerland constrained sales.
“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,” said Ian Meakin, chief executive.
He warned that profits growth in the current quarter will be impacted if the euro continues to depreciate against the pound.