Wolseley, Ferguson Post Strong Results For 2011

ZURICH, Switzerland – Industrial distributor Wolseley plc reported sales for the fiscal year ended July 31 were $21 billion, up 3 percent over sales in fiscal year 2010. Furthermore, Wolseley reported profit of $602.5 million, compared to a year-ago loss of $505.4 million. “We continued to grow our business and revenue growth trends in August and September have been similar to the fourth quarter last year,” said Ian Meakins, CEO, Wolseley.

ZURICH, Switzerland – Industrial distributor Wolseley plc reported sales for the fiscal year ended July 31 were $21 billion, up 3 percent over sales in fiscal year 2010. Furthermore, Wolseley reported profit of $602.5 million, compared to a year-ago loss of $505.4 million.

“We continued to grow our business and revenue growth trends in August and September have been similar to the fourth quarter last year,” said Ian Meakins, CEO, Wolseley. However, recent economic forecasts have weakened and over time this is likely to have an impact on our markets. Wolseley is in good shape: we have strong market positions in large attractive markets with an effective business model and significant opportunities for growth.

“The business is highly cash generative and borrowings are at a 10 year low,” Meakins continued. “We expect to increase investment in the business where we can generate good returns. Operationally, we will remain focused on improving the service to our customers and developing our strategy to gain market share and protect margins. In the current environment, we will remain cautious on the cost base.”

Wolseley is the parent company of Ferguson, the largest wholesale distributor of residential and commercial plumbing supplies and pipe, valves and fittings in the U.S. Ferguson also announced its year-end results.

Despite sluggish market conditions, Ferguson ended the year with revenues of $8.8 billion, a nine percent increase in like for like sales over last year. This marks 16 consecutive months of positive like-for-like sales, which measures growth through Ferguson’s existing stores or branches that have been open for at least one year. It does not include the impact of new locations, acquisitions or closures. All major business units generated growth due to resilience in the repair, maintenance, installation sector and commercial and industrial markets.  

“Our success this year was a testament to the hard work of our associates,” explained Ferguson CEO Frank Roach. “The last two years prove that we can adapt to any market conditions if we continue to be agile as a company and focus on providing world-class customer service to our customers.”

Ferguson’s blended branches, which service residential and commercial customers, showed solid revenue and market share growth throughout the year. The Industrial Pipes Valves and Fittings (PVF), and Heating, Ventilation and Air Conditioning (HVAC) businesses also made great strides during the year and continued to perform very well.  The Industrial business in particular, benefited from a buoyant oil and gas sector.  The Waterworks business was resilient despite a fall in state and municipal funded projects.  The build.com consumer internet business grew strongly at margins consistent with the rest of the US business.

In the first half of the year, Ferguson completed a small Waterworks acquisition in Alabama.  Since the year-end, Ferguson has also completed two further acquisitions including a PVF business in Louisiana and a plumbing business in Chicago. The company’s trading margin was 5.7 percent, up from 4.6 percent in 2010.

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