Leading shares are in the red, but Wolseley is bucking the trend.
The building materials group has jumped 117p or nearly 3% to £41.36 after it said third quarter revenues were up 16.6% to £3.3bn and its trading profit was up 29.1% to £195m. US sales were slower, partly due to the weather, but held up well under the circumstances and in Europe there was good growth in the UK and the Nordic region. Barclays said:
Wolseley’s trading profit in the third quarter was easily better than our expectations due to strong like-for-like growth, good margins and some one-off benefits. This has left management comfortable with full year consensus trading profit of £864m. The encouraging features from our point of view are that growth in the US continues to hold up well and that an improvement in like-for-like growth in the UK and the Nordics has not come at the expense of margin this quarter. Wolseley is our top pick in the sector as we believe there is a multi-year opportunity for the business to gain market share across the USA. This would consolidate its leading position, dampening the cyclicality of its business and help deliver double-digit earning per share growth for several years.
It expects like for like sales growth over the next six months of 6% and full year profits to be in line with expectations.
It also made a couple of small acquisitions in the US with total revenues of £31m.
Overall the FTSE 100 is under pressure, with continuing concerns about Greece despite late night discussions including Germany, France, the IMF and ECB, designed to come up with new proposals to break the deadlock.
Investors were also nervous ahead of the latest EU inflation figures, which if stronger than expected, could cast doubt on the continuation of the ECB’s QE bond buying programme.
Elsewhere British American Tobacco is down 84p at 3508.5p and Imperial Tobacco is off 64p at £32.42 after Canadian smokers were awarded C$15.6bn in damages.
