Plumb Center owner Wolseley today warned over slowing revenue growth as it reported a 25 per cent slide in annual profits.
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“Industrial markets in North America, which account for about 15 per cent of revenue in the region, were challenging in the fourth quarter and we expect this to continue”, said chief executive Ian Meakins.
The rise in revenue was driven by a strong performance in Wolseley’s U.S. business, often the star performer and accounting for around three-quarters of its trading profit, while revenue growth in the United Kingdom was solid despite a tough market.
For the year to 31 July, pre-tax profits fell to £508m from £676m the year before, with like-for-like revenues up 7.1%. Overall, we expect to make continued progress in 2016.
Trading margin for the ongoing businesses up 10 basis points to a record 6.4%.
Proposed final dividend 10% ahead of previous year. This will be supplemented by a GBP300.0 million share buyback programme the company will conduct over the next 12 months.
Impairment and exceptional items of £242 million (2014: credit of £1 million) includes previously announced impairment charge of £234 million relating to the Nordics. “In the USA we expect continued good growth in Blended Branches, Waterworks, HVAC, B2C and Fire and Fabrication underpinned by decent Commercial and Residential markets”, he said.
So 4% revenue growth in the first half and “continued progress” next year. Wolseley also it saw an improved performance in the Nordics, where it remains focused on restoring profitability.
“Wolseley continues to be highly cash generative and we have adequate resources to fund our capital investment programme, bolt-on acquisitions and growth in ordinary dividends”.
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