Heating and plumbing products group Wolseley PLC (LON:WOS) is to change its name to Ferguson PLC after announcing plans to exit operations in the Nordic regions as it reported a rise in first-half trading profits driven by growth in the US.
The FTSE 100-listed firm – which last month announced plans to merge its Swiss plumbing and heating business Tobler with Walter Meier – posted a trading profit of £515mln for the half-year to January 31, 5.0% ahead of last year at constant exchange rates.
Wolseley’s first half revenue were 6.7% ahead of last year at constant exchange rates with like-for-like growth of 3.2%, while its gross margin of 28.6%, was 0.3% ahead of last year.
John Martin, the Wolseley’s chief executive, said: “The Group delivered a good trading performance in the first half driven by Ferguson.
“In the US, residential and commercial markets remained good and industrial markets improved but were still negative. Commodity price deflation reduced US revenue growth by 1.8 per cent in the first half.”
New name …
He added: "Ferguson now accounts for 84 per cent of Group trading profit and we have decided to align the Group's name with our most significant brand in our largest market.
“Whilst the Group will be known as Ferguson PLC going forward we will continue to use the Wolseley name in the UK and Canada where it has strong local recognition.”
Martin said that like-for-like revenue growth since the end of the period has been about 4.5% for the group and 5.5% in the USA, with commodity deflation negligible.
He concluded: “We expect the Group to make further progress in the second half."
The group is to pay an Interim dividend of 36.67p, up 10.2% on last year’s 33.28p payout.
Wolseley also said it is to change the currency it reports in to US dollars from August 1.
Shares leap ...
In early trading, Wolseley shares topped the FTSE 100 leader board, up 7.5% or 367p at 5,250p.
In a note to clients, analysts at Liberum capital said: “Wolseley’s first half results were a bit stronger than expected in the US and much less bad than we feared in the other areas.”
They added: “The second half has started broadly in line with our expectations.”
But the analysts maintained a ‘hold’ rating on Wolseley as the shares trade close to their fair value of 4,975p.
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