European woes put a spanner in Wolseley’s plan

Kasmira Jefford
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PLUMBING and heating merchant Wolseley has revealed higher profits on the back of continued strong growth in the US, but warned of challenging economic conditions in Europe.

The owner of Plumb Centre and Bathstore as well as Ferguson in the US reported pre-tax profits of £250m for the six months to the end of January, up from £195m in the same period last year.

Sales increased by five per cent on a like-for-like basis to £6,841m in the period.

But chief executive Ian Meakins warned that growth trends since the end of the period have been slightly lower than the first half overall “with the US a little better and Europe a little weaker”.

The FTSE 100 company said UK sales fell three per cent to £852m while performance across the rest of Europe remained patchy, with subdued growth in countries like Denmark, Sweden and Finland.

Sales across its US business, which counts for 43 per cent of revenue, rose by nine per cent, benefiting from the recovery in the US housing market and increased market share.

Meakins said Wolseley had decided to raise its interim dividend by 33 per cent to 20p a share to reflect its “confidence in the business”.

The company is close to completing the sale of its French distribution division Brossette and recently sold its UK-based Build Center business for £310m to Saint-Gobain as part of a disposal strategy.

These disposals helped to pay down debt from £714m in January 2011 to £470m this year.

Shares fell 3.33 per cent to 2,435p.