US housing market boosts UK builder Wolseley

Build Center chain Wolseley took advantage of a strong housing market in the United States to report a healthy increase in sales and profits today.

The improvement for the world’s largest distributor of plumbing and heating products came despite tougher conditions in the UK, although the region still managed a 5% rise in sales and marginally better profits.

Overall, Wolseley said group sales for the five months to the end of December - including the effect of acquisitions and before current translations – stood 25% higher with trading profits ahead 20% on the same period a year earlier.

Wolseley told investors that it was well positioned for further growth in the second half of the financial year.

It said: “Market conditions in North America are expected to remain strong for the foreseeable future. Although the market in the UK has slowed in recent months, the group expects its UK business to continue to show modest growth.”

The boost from United States reflected strong levels of activity in the housing market while commercial and industrial sectors improved.

As a result, plumbing operations pushed sales in local currency up by more than 35% while profits were ahead by 30% in the five-month period. The majority of sales growth was organic, the company added.

In the US building materials sector, Wolseley said sales were up by more than 20% with trading profits ahead by 40% or more.

As well as the strong trading performance, Wolseley said 22 acquisitions in the financial year to date had added around £697m (€1bn) to group turnover. They included eight deals in Europe worth £251m (€364.4m).

Chief executive Charlie Banks added: “The acquisitions and other investments we have made position us well for further growth in the second half.”

The Reading-based group generates around 20% of its sales from the UK, where it also runs the Plumb Center, Pipe Center and Pipe Center chains.

It employs a total of 63,000 people worldwide and generated sales of more than £11bn (€16bn) in the year to the end of July 6.