PLUMBING and heating merchant Wolseley posted higher profits yesterday as a strong performance in North America offset more tough conditions in Europe.
The Leamington Spa-based group, which achieves 13% of its revenues from UK businesses such as Plumb and Parts Center, improved trading profits by 10% to £658m in the year to July 31.
While it benefited from good growth in the United States and Canada, and signs of recovery in the UK following a 1% drop in full-year underlying revenues, France’s construction markets weakened substantially in the second half, culminating in a 5.6% decline in fourth-quarter revenues in the country.
Wolseley is considering strategic options for the France business, which generates 10% of its sales, and said conditions on continental Europe had caused a one-off write-down on deals made between 2003 and 2007.
The £353m hit meant Wolseley’s bottom-line pre-tax profits were £198m, compared with £391m a year earlier.
With Wolseley confident of making good progress in the year ahead, it hiked its total dividend for the last year by 33% to 60p a share and also proposed the one-off return of £350m to shareholders.
Shares were 2% higher yesterday.
Chief executive Ian Meakins said: “The group continued to make progress in a year of slowing economic growth and considerable uncertainty in the eurozone.”
The company said the heating market was subdued in Britain but other categories performed better.
It said there was no evidence of improving market conditions but added that its major business units, which also include Drain Center, gained market share.
Underlying revenues for the UK were 3.5% higher in the final quarter of the financial year, compared with a 3.3% decline at the start of the 12-month period.
Trading profits in the UK were £3m higher at £92m, helped by a reduction in headcount of 321 to 5,913. Profits in the United States rose 24% to £389m.