Wolseley posts solid first half earnings

Wolseley Plc posted a 16% rise in first half profits as strong US sales offset slower growth in its European markets.

The world's biggest building supplies company said half year revenue for the financial year increased to £6.8bn, a 3% advance from the same period in 2011 and a 5% jump on a like-for-like basis.

For the half year ending in January, the group's trading profit rose 13% to £310m, with underlying trading profit up 16% to £318m. The group also lifted its half-year dividend by at third to 20p per share.

"Wolseley has delivered another decent performance, despite challenging economic conditions in Europe," said CEO Ian Meakins."Good cash flow has enabled us to continue to reduce net debt and to invest for future growth. We have completed a number of value-enhancing acquisitions in the US and Nordics and they are being integrated promptly. An attractive and sustainable dividend is an important element of shareholder returns and we have raised the interim dividend to 20 pence per share, 33 percent ahead of last year reflecting our confidence in the business."

Wolseley said US trading, which generate around 45% of group revenues, rose 9% in the period while markets in the UK, which comprise around 15% of group revenues, declined 3%.

Wolseley said it will continue to practice operating efficiencies and remain focused on improving customer service, increasing market share and protecting its gross margins. It will continue to invest selectively in the business where it can exploit growth opportunities and generate good returns.