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Research Tree provides access to ongoing research coverage, media content and regulatory news on WOLSELEY PLC. We currently have 7 research reports from 2 professional analysts.

Date Source Announcement
30Nov16 03:45 RNS Total Voting Rights
29Nov16 04:20 RNS Result of AGM
15Nov16 01:57 RNS Q1 Interim Management Statement
08Nov16 02:59 RNS Director/PDMR Shareholding
03Nov16 08:56 RNS Director/PDMR Shareholding
31Oct16 02:42 RNS Total Voting Rights
19Oct16 11:58 RNS Annual Financial Report
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Europe remains weak; onus again on the US

  • 11 Nov 16

Wolseley reported FY16 results (year ending 31 July) slightly ahead of our estimates. Despite commodity price deflation (-1.5% impact on the top-line) and weak industrial business in the US (-10% lfl yoy, 12% of US revenue), the company’s lfl revenue was up 2.4% (vs our estimate: 2.5%). Strong consumer demand in the US residential and commercial markets (jointly contributing c.73% of the US revenue) safeguarded 4.1% organic growth in the region (vs our estimate: 4.3%; c.66% of group revenue). In the UK (c.14% of group revenue), sluggish RMI activity/competitive heating market resulted in a 1.6% organic revenue decline ( Q4: -2.1% vs our estimate of -1.3%; Q3: -0.4%) The Nordic region, contributing c.13% to group revenue, clocked 0.6% lfl growth (vs our estimate: 0.8%) during the year. However, the negative momentum sequentially continued in the fourth quarter (Q4: -2.3%, Q3: -2.6%; Q2 16: +2.4%, Q1 16: +5.5%) due to challenging macro-economic conditions, especially in Denmark and Finland. Reported revenue increased by 8.5% (vs our estimate: 6.5%) on the back of FX tailwinds (+4.3%; largely due to the depreciation of the GBP vs the USD) and a positive scope effect (+1.8% yoy). Despite a better gross margin (+30bp yoy; a better mix of higher value-add products/services and improving purchasing terms), the trading margin remained flat at 6.4% (+30bp vs our estimate) due to continued investment in estate, technology and brand building. As expected, management announced a UK turnaround plan with a target of £25-30m in annual savings over the next three years (80 branches and one distribution centre will be closed, resulting in c.800 job losses). Also, a review of the operating strategy in the Nordics has been initiated. The company completed 16 bolt-on acquisitions for £113m during the year (EV/sales multiple: 0.6x) and plans to invest a further £300m in FY2017. A final dividend of 66.7p was also announced by management, bringing the total to 100.0p per share (+10.2% yoy).

Breakfast Today

  • 28 Sep 16

"How to solve the dilemma of ultra-low interest rates? The question was being posed again yesterday by members of both the ECB and the Fed. The Governor of the Central Bank of Ireland, Philip Lane, went as far as calling for a ‘forceful pursuit of stimulus’ in order to return interest rates to more normal levels, while Vice Chairman, Stanley Fisher, added that the economy is better off when there is ‘a price for using money’. They are simply reflecting the common desire to stimulate inflation to return interest rates and growth trajectories back to more historical trend - not that they have any chance of forming a consensus on how to do it, nor appear to embrace the reality that the dramatic changes to world order being created through the drive into new technologies means the old ways of doing things and predictable economics have probably gone forever. One hope the markets had had was that the Saudi-Russia proposal to cap oil production might succeed, but Iran’s stated determination to ramp-up production until it hits 4.2m bbl/day appears to have blown apart any idea of OPEC reasserting a binding quota system before its meeting in Algiers closes today, leaving oil traders to shift their focus to the Organisation’s next scheduled meeting in November instead. US equity markets, however, looked beyond these concerns to focus on positives from technology and consumer stocks, as well as some modest recovery in the over-sold banking sector, leaving all principal indices to close quite firmly up led from the start by the NASDAQ. Asia by contrast was marked down across the board, with the Nikkei in particular hurt by weaker oil prices, while banking sector jitters also reached its shores and sentiment toward export-related shares continued to be knocked by Yen strength. This mixed picture leaves London and Europe in an undecided mood for this morning’s opening, with the FTSE-100 seen opening around 10 points higher. No major UK macro data is due for release this morning, although traders will be listening out for closing statements from OPEC’s 2-day meeting, a press statement due from ECB President, Mario Draghi and a speech from the IMF’s Christine Lagarde. Later this afternoon, Fed Chair, Janet Yellen, is due to make her Testimony, while member Kashkari is also scheduled to make a statement. Corporates due to release earnings reports include Moss Bros (MOSB.L), Sainsbury (SBRY.L) and Smiths Group (SMIN.L), while today SAB Miller (SAB.L) shareholders are due to vote on their proposed merger with Anheuser Busch InBev." - Barry Gibb, Research Analyst

Performance meets estimates; patchy start for Q4

  • 03 Jun 16

Wolseley reported Q3 FY16 numbers broadly in line with our estimates after our last report on 1 June. The lfl revenue growth was up 2.8% (our estimate: +2.8%), driven by robust growth in the US (lfl: +5% vs our estimate: +4.5%; c.80% of trading profit) but once again knocked down by commodity deflation (-1.4% impact on the group’s lfl revenue growth), weak industrial business in North America (now accounts for 13% of US revenue vs 15% in 2015) and sluggish RMI activity in the UK (lfl: -0.4%, although better than our estimate of -2%; c.8% or trading profit). In the Nordic region, sluggish construction and DIY activity and the tax break reduction in Sweden led to a 2.6% decline in organic revenue growth (vs Q2 16: +2.4%, Q1 16: +5.5%; our estimate: +3.5%). Furthermore, the lfl growth was flat in Canada (+0.1% vs our estimate: -1.5%; growth in Blended branches and waterworks was offset by weak industrial business) and Central Europe (-0.2% vs our estimate: -4%; challenging conditions in Finland eroded the growth from Denmark and Sweden). The reported revenue was up 10.8%, underpinned by new acquisitions and favourable currency movements (contributing +1.7% and +4.8% to the group’s revenue). The gross and trading margin improved by 40bp and 30bp on a yoy basis (at 28.4% and 6.4%; 30bp ahead of our estimates), once again driven by the ongoing work on pricing compliance and moving the business mix towards higher margin channels. The review of the UK operating model is expected to be complete by August 2016. Wolseley completed five bolt-on acquisitions during the quarter with annualised revenue of c.£23m. Management reported lfl revenue growth of 1% (much lower than the consensus estimate of 2.5-3%) in the weeks since the third quarter ended 30 April 2016, triggering c.6% decline in the stock price on 1 June 2016. However, the company still expects the trading profit outlook for the full year to be in line with analysts’ expectations of c.£920m at CER.

Weakness continues in Q2, H2 promises a better picture

  • 01 Jun 16

Wolseley reported H1 FY16 results below our estimates. In Q2, the lfl revenue growth declined sequentially for the fourth straight quarter, clocking +2.3% (vs our estimate: +4.2% and management guidance: +4%), pinned down once again by weak industrial demand in North America (the adverse impact of low oil prices, a stronger USD and destocking by manufacturers; accounts for c.15% of US sales and c.10% of Canada) and ongoing sluggishness in the UK’s RMI activity (lfl growth: -2.9% vs Q1: -1.1% and Q4 15: +3.1%; c.15% of group revenue). Despite stronger prior year comparatives, steady commercial and residential activity (both new build and RMI) led to 4% lfl growth in the US (vs +4.5% in Q1 16, +12.5% in Q2 15; c.80% of trading profit) and modest growth in Blended branches pushed Canada into positive territory after a gap of four quarters (Q2 16: +0.6% vs -3.7% in Q1 16; c.5% of trading profit). In H1, the reported revenue was up 5.9%, underpinned by new acquisitions and favourable currency movements (contributing +2.1% and +1.3% to the group’s revenue). Although the gross margin improved by 40bp yoy (on the back of ongoing work on pricing compliance and moving the business mix towards higher margin channels), the ongoing trading margin declined by 10bp to 6.0% in H1 (4.9% in Q2 16; -50bp vs Q1 15) on the back of higher investment in IT, marketing and commodity deflation (-3.8% impact on trading profit vs -1.4% in the top line). Wolseley completed two acquisitions during the quarter with annualised revenue of c.£13m. The group completed the sale of remaining French building material business in March 2016. An interim dividend of 33.28p per share was paid in April 2016. The company expects trading profit, i.e. EBITA for FY16, to be in line with the current consensus of analysts’ expectations (c.£921m).