Ferguson Parent Wolseley Reports Record Results
Wolseley plc (Reading, U.K.) said it had a sixth consecutive year of record trading performance in its preliminary results for the year ended July 31. The company reported double-digit growth in sales and earnings and continued market outperformance across all principal operations.
The North American Plumbing and Heating Distribution division reported sales of $5.6 billion (U.S.), up 19.7% from $4.7 billion (U.S.) last year. Trading profit for the division of $314 million (U.S.) increased 29.1% from $243 million (U.S.) last year.
After taking into account the effect of closed locations - primarily duplicated Westburne locations in the United States - and adjusting for a small amount of price deflation, the company said organic sales volumes in the United States were flat on a year-by-year basis, an "outperformance" when compared with a market that had declined by about 5%. The contribution from Westburne, which was purchased in July 2001, exceeded expectations.
The company said it made progress in its strategy to focus its U.S. business operations into two consolidated national companies to leverage the best of the management, purchasing power and logistic skills. "Tremendous progress" was made in integrating Ferguson, Familian Northwest and Westburne's U.S. business, along with other acquisitions, into the Ferguson organization, Wolseley said in a statement. The integration is on schedule and is expected to bring synergies and additional opportunities for sales and profit growth, the company said.
Trading patterns in the United States remained mixed throughout the year by both business segment and geography. Activity levels related to housing, remodeling and infrastructure spending were satisfactory despite uncertainty regarding the direction of the U.S. economy.
U.S. plumbing, under the overall guidance of the Ferguson management team, reported a sales increase of 9.6%, while trading profit rose by 13.5%. Cash flow from U.S. plumbing operations significantly improved on the prior year as inventory reductions were achieved from the increased throughput at the distribution centers.
Consumer and business confidence will have an impact on future activity levels in the United States, the company said. The market conditions currently being experienced by its U.S. companies create opportunities for further profitable growth. While any upturn for the industrial and commercial market in the United States is unlikely before the end of the calendar year, prospects for the housing market, remodeling and infrastructure spending are more encouraging, the company said.
Mixed regional variations are expected to continue, but the diversity and market positioning of the group's U.S. businesses will enable them to continue to outperform overall market trends, Wolseley said.
For more information, visit the company's Web site at www.wolseley.com.