British plumber Wolseley posts rising quarterly profits

1st June 2011, Comments 0 comments

Wolseley, the world's biggest distributor of plumbing and heating products, said Wednesday that profits jumped 30 percent in the third quarter of its financial year, despite subdued trading conditions.

Operational profit rose to £131 million ($216 million, 150 million euros) in the three months to April 30, compared with £101 million for the same period of 2009/2010, Wolseley said in a results statement.

Revenues climbed by a modest one percent to £3.271 billion in the reporting period, compared with £3.252 billion last time around.

At the same time, Wolseley slashed its net debt to £824 million, from the previous level of £1.336 billion.

"The group continued to make progress in the third quarter, broadly maintaining the revenue growth trends achieved in the first half," said Chief Executive Ian Meakins in the earnings release.

"New residential construction, which accounts for 20 percent of group revenue, remained subdued in most regions, while demand in repair, maintenance and improvement segments held up well in most markets."

Positive revenue growth in the United States, the Nordic region and France, was offset by weaker trends in Canada and Britain. Meakins added that the group expected to reach its full-year earnings targets.

Wolseley had revealed in March that it returned to profit during the first half, after plugging two years of sizeable losses.

The company was hit hard by the 2008 credit crisis and resulting economic downturn, causing it to axe thousands of jobs and shut sites. It suffered a net loss of £1.17 billion in 2008-09 and of £340 million in 2009-10.

The impact was heightened by Wolseley's exposure to a troubled housing market in the United States -- a country that accounts for about 40 percent of the group's sales.

© 2011 AFP

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