Trading profits at the Theale-based firm have hit £185m for the three months to October 31, up 16% on the same quarter in 2010. Like-for-like turnover is also up 5% to £3.64bn. But, like many businesses reporting decent earnings at the moment, Wolseley’s management team has chosen temperance over exuberance in its official statement. ‘Given continuing macroeconomic uncertainty, trading conditions may get tougher in the coming months,’ says chief executive Ian Meakins. ‘We will remain vigilant on costs.’
Meakins is right to be wary. Wolseley has offloaded most of its extraneous activities: French distribution division Brossette and UK-based Build Center were sold for £310m to Saint-Gobain earlier this year. Wolseley has scaled down to its bread-and-butter business and if that runs into trouble, there are no quick cash-injection options left.
But enough doom-mongering. The firm’s future actually looks extremely bright. The US operation, previously a millstone around Wolseley's neck, has now become a real money-spinner. It has contributed £1.53bn in revenues to the Q1 global balance sheet, up 10% on last year. The only leaky tap on Wolseley’s portfolio now is the UK: its supply and distribution operations in Blighty, alongside the Plumb Center and Ferguson chains, saw a decline in like-for-like growth of 3%.
But, with a whole swathe of new government building projects in the pipeline, Wolseley’s fortunes at home may be about to change. Cameron has put construction at the heart of the UK recovery programme, and Wolseley couldn’t have built better foundations to tap into the coming boom.