Europe’s woes weigh down on Wolseley profit

 
Kasmira Jefford
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WOLSELEY shares slumped by six per cent yesterday despite the plumbers’ merchant reporting a rise in third quarter trading profits, as investors worried over continued weak conditions in Europe.

The company reported a 7.9 per cent rise in trading profits to £150m in the three months to 30 April, thanks to a strong performance from its US business and in the UK.

Sales in America rose by 8.3 per cent to £1.7bn on a like-for-like basis, while trading profits rose by £20m to £115m thanks to “resilient” demand in the repair, maintenance and improvement (RMI) markets.

In the UK, like-for-like revenue grew by 5.2 per cent driven by its plumbing and heating products distribution business Plumb and Parts Center, which increased its market share.

Wolseley said trading profits in the UK slipped by £2m to £24m after investing in its e-commerce business and due to the cost of acquiring Burdens, the supplier of civil engineering and building materials, late last year.

Its performance in the US and the UK helped to offset continued challenges in France, the Nordic countries and central Europe, where a squeeze in consumer income has hit sellers of “big ticket” items such as kitchens and bathrooms.

Like-for-like revenue shrank by 9.2 per cent in France, by 4.6 per cent in central Europe and by 7.3 per cent in the Nordics.