Wolseley PLC
13 December 2001
NEWS RELEASE
13 December 2001
Wolseley plc
AGM Trading Statement
Wolseley is issuing a trading update in advance of the statement to be
presented by the Chairman at the Annual General Meeting to be held at 12 pm at
the London Underwriting Centre tomorrow, Friday 14 December 2001.
Summary
Despite the continued uncertainties following the events of 11 September,
Wolseley has made a sound start to the current financial year. The group has
seen no significant changes to the outlook as stated in the September
Preliminary Results announcement.
For the four months to 30 November 2001, group sales are up over 15%
(including acquisitions) on the corresponding period in the previous year.
After excluding the effect of the remaining manufacturing activities disposed
of in February of this year, the increase in the group's sales is over 17%.
Operations
The UK market (which accounts for over 20% of group sales) continues to hold
up well, particularly in the Repairs, Maintenance and Improvement ('RMI')
sector. UK sales are up over 15% on the prior year for the first four months.
However, sales in the continental European businesses (which account for
approximately 10% of group sales) are marginally down on the prior year
against the background of slowing economies, particularly in France.
In North America (which accounts for approximately 68% of group sales) the
regional trading pattern remains variable. There has been no sign of any
significant deterioration in overall activity levels since 11 September. Sales
in the North American plumbing and heating operations for the first four
months are approximately £254 million (26%) up on the previous year
principally due to the effect of acquisitions in the prior year. Cumulative
like for like sales per day trends for the first 4 months are broadly flat
compared to the prior period.
Sales in the US building materials business are approximately 9% higher than
the prior year. Average lumber prices (which directly affect approximately
10% of total group sales) for the first four months were approximately 5% up
on the equivalent period last year although lumber prices as at 30 November
are back in line with where they were a year ago. Recent statistics relating
to housing starts, housing transactions, and inventory of unsold houses
support the continued resilience of the US new residential housing market
(which directly affects approximately one third of group sales). Whilst the
industrial and commercial market has softened, the pipeline of projects is
expected to enable demand to continue at current levels for the foreseeable
future.
Acquisitions
Acquisition activity has slowed given the current economic uncertainties and a
reluctance of vendors to reduce, accordingly, prices of businesses available
for sale. Four acquisitions have been completed so far in the current
financial year for a combined consideration, including debt, of approximately
£14 million, including estimated goodwill of approximately £5.5 million. In a
full year, these acquisitions are expected to contribute additional sales of
approximately £53 million.
Financials
Net borrowings, excluding construction loan borrowings, as at 30 November
2001, are approximately £690 million giving gearing of around 45%. The group's
interest charge for 2001/2 will benefit from interest rate reductions during
this calendar year.
Outlook
Business conditions in the UK are expected to remain stable in the short term
whereas continental Europe seems likely to remain soft. No significant pick
up in activity levels in North America is expected until after the first
quarter of next year.
Providing there are no significant changes in our current business
environment, we expect to see continued progress over the remainder of this
financial year for the group as a whole.
-ends-
This AGM Trading statement contains certain forward-looking statements as
defined under US legislation (Section 21E of the Securities Exchange Act of
1934). By their nature, such statements involve uncertainty; as a
consequence, actual results and developments may differ from those expressed
in or implied by such statements.
ENQUIRIES:
Wolseley plc Brunswick
Group Ltd
tel: 01905 777200
tel: 020 7404 5959
Charles Banks - Group Chief Executive
Steve Webster - Group Finance Director Sophie Fitton
Jacqueline Sinclair-Brown - Director of Corporate Communications Andrew Fenwick
(mob: 07889 433872)
There will be an analyst conference call at 0830hrs (GMT):
European Dial in: + 44 20 8240 8244 / 8243
US Dial in: 00 1 800 482 2239
Password: Wolseley
NB: By dialing this number, you will be requesting participation in any
discussions of the matters referred to in the analyst's presentation and of
any other matters raised at the presentation (including matters raised in
questions or referred to in the answers to questions).
There will be playback available after 1300hrs (GMT):
European Dial in: + 44 20 8288 4459
Code: 619330
US Dial in: 00 1 800 625 5288
Code: 1391912
A headline video with Charles Banks can be viewed on www.cantos.com from
0700hrs. (GMT).
www.wolseley.com
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