Wolseley Share Discussion Threads

[broadwood] 09/9/2015 09:27

Goldman Sachs Wolseley PLC 09/09/2015
Reiterates
Buy Buy
0
4,690.00 5,305.00 4,196.00
615

2

[broadwood] 17/8/2015 09:09

Upgraded by Citi this morning

New TP 4725.

[broadwood] 16/7/2015 11:45

Ashtead Group and Wolseley are both gaining on the back of the rising US dollar

[broadwood] 24/3/2015 09:24

Builders and plumbers merchant Wolseley said it is on track for the full year after a double-digit increase in underlying profits in the first half, helped by record trading margins in the States and strong growth in e-commerce.
Adjusted trading profits rose 11.1% year-on-year to £390m in the six months to 31 January.

However, reported pre-tax profit sank 67% to £103m after a £245m impairment relating to acquired intangibles in the Nordics arising from the acquisition of DT Group back in 2006.

Group revenues rose 8.9% to £6.44bn, up 10.3% at constant exchange rates and 7.8% higher on a like-for-like (LFL) basis. LFL sales from the USA, its largest division with half-year sales of £3.91bn, were up 11.7%.

Meanwhile, e-commerce now accounts for 13% of group revenues at £811m.

Chief executive Ian Meakins said Wolseley delivered a "good trading performance" and the ongoing trading margin improved by 20 basis points to 6.1%.

"This was driven by the USA where all of our businesses strongly outperformed their markets and we achieved a record 7.9% trading margin," he said.

LFL revenue growth rates across the rest of the group also improved which the company said was driven by targeted investment in sales and marketing.

The company raised its interim dividend by 10% to 30.25p per share.

However, looking ahead the company expects group LFL growth to moderate to "about 6%", though constant-currency trading profits for the full year should be in line with analysts' expectations

[broadwood] 17/3/2015 16:54

Shares in Wolseley were retreating on Tuesday after solid gains the previous day, though analysts at UBS hiked their target price for the stock and gave a positive outlook ahead of the plumbers and builders merchant's interim results next week.
The bank lifted its target for the shares from 3,980p to 4,500p and retained a 'buy' rating, saying it expects Wolseley to report "solid" growth in the States when it reports on its half year on 24 March.

Like-for-like (LFL) sales are expected to have grown by 6.5% in the six months to 31 January, though UBS noted that the reported figure could be higher if the struggling French business is re-classified as a discontinued operations.

The US business, which accounts for around three-quarters of group earnings, is forecast to have increased LFL sales by 12.5% in the second quarter alone, after 12.4% growth in the first. UBS said: "Peer reporting suggests there is risk to the upside considering a relatively easy comparison basis from the prior year."

Trading profits are estimated to rise by 14% to £401m for the first half, with earnings per share up 15% at 105p.

UBS said: "Going forward, we expect more of the same: a focus on enhancing organic growth, small bolt on M&A and cash returns to shareholders. The US comps will undoubtedly get tougher and holding double digit growth will be more challenging, but we believe high single digit sales growth remains achievable into [financial years ending 2016 and 2017]."

With the shares trading at 16.1 and 14.1 times 2015 and 2016 calendar year earnings respectively, the broker admitted that the valuation is no longer depressed but still remains "attractive" compared with its peers.

[lozler] 17/3/2015 11:38

Looks like it's heading to 3800 looking at the chart, possibly even lower depending on that main market (3400-3700).

[broadwood] 02/3/2015 11:53

WARWICKSHIRE plumbing and heating giant, Wolseley, has acquired a substantial stake in a Coventry-based online bathroom retailer in an undisclosed deal.BathEmpire.com was founded in 2009 by entrepreneur Chris Li, a former finalist in TheBusinessDesk.com’s West Midlands Business Masters awards.Leamington-based Wolseley has not disclosed the full amount of its involvement but in a statement to the London Stock Exchange it said it had an option to acquire the outstanding stake in the business at a future date

[zyzzyva] 02/2/2015 15:56

Buy recommendation in Investors Chronicle = kiss of death

[broadwood] 01/10/2014 10:14

I guess fewer shares in issue theoretically means distribution of profits among a smaller number of shareholders which should increase both dividends and capital value.

Its always impossible to say what the performance of, say, Shell shares, would have been without it.

[broadwood] 30/9/2014 10:41

Final results from plumbing supplier Wolseley were in line with expectations, as a strong performance from the USA helped lift earnings almost 10%.
Revenue of the ongoing businesses was up 6.1% in the year to 31 July compared to the previous year at constant exchange rates, including like-for-like growth of 4.2%.

The US achieved 11% growth in like-for-like sales in the fourth quarter, up from 9% in the third, as businesses there continued to strongly outperform their markets. US margins of 7.7% for the full year were a company record.

Chief executive Ian Meakins defended flat like-for-like revenue in the UK as resulting from management's focus on protecting gross margins.

"We faced headwinds in Continental Europe and have continued to take actions to protect profitability," he added.

Demand in the repairs, maintenance and improvement (RMI) markets grew modestly in most countries but while residential new construction markets were good in the USA they were weak in Europe.

Profit before tax rose 52% to £698m, as the business incurred a large exceptional charge the prior year.

Earnings per share rose 9.9% 196.2p, helped also by a lower finance charges, and the board lifted the dividend by 25% to 82.5p a share, as expected.

Commenting on outlook, Meakins said: "The overall like-for-like revenue growth rate for the group since the beginning of the new financial year has been broadly in line with Q4. Overall we expect the group's like-for-like revenue growth rate for the next six months to be about 5%."

Meakins also announced a £250m share buyback, the third consecutive annual return.

Broker Westhouse said the result was "in the ball park on an ongoing basis" and was slightly surprised by the buyback, having thought this was "a possibility rather than a probability".

"Some two-thirds of analysts polled by Bloomberg had expected this - so the reaction could be more of relief than a positive surprise."

[broadwood] 30/9/2014 07:35

We are committed to generating attractive returns for shareholders by maintaining strong capital discipline. This year we have increased the dividend by 25 per cent, including a rebasing of 15 per cent announced at the half year, and the Board is recommending a final dividend of 55 pence per share which brings the total dividend for the year to 82.5 pence per share. Wolseley continues to be highly cash generative and we have adequate resources to fund future investment in the business, including bolt-on acquisitions and growth in ordinary dividends. We are today announcing a GBP250 million share buyback programme which reflects the Group's strong financial position and management's confidence in the business

Hit from forex but that should be in the price. Strong comparaters otherwise.

[scobak] 01/7/2014 14:06

This is a changed company since the 2008 crash. It is now effectively a successful american company and suffers due to reporting in sterling. I like this company and am a long term holder and will look to top up again as / when there is price weakness.

[broadwood] 01/7/2014 13:13

Credit Suisse has lowered its price target for Wolseley from 4,000p to 3,800p to reflect currency movements, but has maintained its positive stance, saying it sees "robust" growth for the heating, plumbing and building products group.

"Our core thesis on WOS remains intact, and the stock remains on the Credit Suisse Focus List, with our positive view predicated on the combination of upbeat underlying trading momentum, potential for capital returns and valuation."

[broadwood] 04/6/2014 07:20

Shares in plumber's merchant Wolseley could regain year-highs as the company cashes in on the recovering global economy, broker Prime Wealth says.

The stock, which was 64p or 1.9% up at 3374p in mid-afternoon trading on Tuesday, may re-test highs of about 3530p in the next month, Prime Senior Trader Dafydd Davies said.

Wolseley on Tuesday reported a 0.8% fall in underlying revenue to £3.05bn due to exchange rate volatility.

But it said like-for-like sales were 5.1% higher, a decent pick-up from the 3.2% increase in the first half, as 9% growth in the US and 7.5% growth in the Nordic region helped to offset declines in Canada, France, Central Europe and the UK.

Prime's Davies, who is advising clients to buy Wolseley shares, said their performance in the past year directly reflected the recovering global economy.

Davies said: "Given the group's global plumbing supplies operation turns over a hefty revenue number every quarter, a 5% rise to £3bn-plus is no mean achievement, particularly as the performance could have been significantly better were it not for unfavourable forex rates.

"However, the bullish comments from the chief executive make it clear the company remains very much in growth mode. It seems churlish to bet against the shares regaining year-highs before very long. As such, Prime Wealth rates Wolseley shares a buy."

PW

[broadwood] 23/4/2014 17:07

That would do very nicely.



Wolseley climbs on hopes of cash return to shareholders

Analysts say building materials group could return £14 a share over the next five years




Wolseley is one of the day's biggest risers so far, climbing 1.5% on the prospects for the building materials company returning cash to shareholders.

Its shares have added 51p to £34.12 after Credit Suisse raised its rating from neutral to buy with a £40 target price, saying:


Our upgrade to Wolseley is primarily focused on the potential for capital return – we see potential for £14 a share over next five years, equal to around 40% of market cap – but this must be considered alongside a robust trading outlook, a quality management team, a stock that has underperformed its peer group in the past year and a compelling valuation.

Wolseley generates the vast majority of its profit (90%) from three core geographies; the US (68%), the UK (12%) and Nordic (10%), all of which are end markets where we have an upbeat view of the midterm trading outlook - as such we see average organic sales growth of 4.5% over the next five years with margins increasing from 5.6% in 2013 to 7.6% by 2018, as a result of both operational leverage and on-going efficiency gains.

Even after accounting for the increased working capital demands of a growing business (around 12% incremental sales) and on-going capital expenditure requirements (£180m-£200m per annum) we envisage a scenario of significant surplus cash.

Wolseley states that it is, in principle, willing to consider making acquisitions but we highlight that management continually emphasizes that such deals must "meet the group's strict return criteria".

Given management's admirable adherence to stringent return on capital employed criteria we believe anything other than reasonably small acquisitions are extremely unlikely as the valuations demand by vendors at this point of the cycle are, in our view, prohibitive. As such we assume a net cash outflow for small M&A of just £200m per annum.

Accounting for all these cash movements, and including our assumption of regular, but not special, dividends we would see group net debt/EBITDA at 0.4 times this year and declining to -0.5 times by 2018, materially below management guidance.. of 1 to 2 times.

As such we see material sized special dividends as the inevitable conclusion.

We assume the group will pay a £325m (117p a share) special dividend this year, and growing every year thereafter for at least the next four years

[broadwood] 23/4/2014 07:03

Credit Suisse Wolseley PLC 23/04/2014
Upgrades
Neutral Outperform 1 4,000.00 3,361.00 4000 1

[broadwood] 04/4/2014 16:40

Held on to a decent rise.

[broadwood] 04/4/2014 08:34

Still ticking up after those results.

[broadwood] 25/3/2014 15:18

Builder's merchant Wolseley is eyeing more disposals as it bids to cash in on good trading in the US and a recovery in the UK and France.

Wolseley's Chief Executive Ian Meakins said the group was looking at selling an unidentified business in the US and was considering one or two other divestments, although he did not give details.

Any sales would follow disposals of under-performing businesses in the last few years including French plumbing business Brossette and Build Center and bathroom retailer Bathstore in the UK.

Meakins told ShareCast in an interview that the sell-offs would not involve large parts of the business and the group was happy with most of its operations.

But he added: "It's a process we go through very rigorously every year."

Wolseley on Tuesday posted an 8.8% rise in first-half trading profits to £360m on a 5.2% rise in revenue from ongoing businesses to £6.4bn, while like-for-like revenue lifted 3.2%. Pre-tax profit increased to £316m from £193m a year ago.

The group traded well in the US and benefited from a recovery in the UK and France, but still faced weakness in businesses in Austria, Canada, the Netherlands and Switzerland.

Wolseley's Swiss business is taking a hit from the strength in the country´s currency against the euro, as it faces competition from euro-denominated imports from Germany, while revenue in Austria fell.

The group has been reducing costs, but said the cuts had not involved mass job losses among its 38,000-strong global workforce.

In the UK, which makes up 15% of group revenue, like-for-like revenue rose 3.2% as more confident consumers carried out more repair, maintenance and improvement work on their homes. Staff numbers reduced by 117 in the first half to 5,835.

Wolseley also increased like-for-like revenue in France by 0.4% as the economy stabilised, although it said new construction markets remained very weak. It said the French arm had completed all significant disposals.

The group increased its half-year dividend by a quarter to 27.5p per share, which it said reflected confidence in its ability to keep generating cash strongly.

Meakins said: "I think we're confident but it's probably with a small 'c'. The signs are a lot more positive than they were 18 months ago."

[broadwood] 25/3/2014 10:02

Getting a wiggle on now.

[broadwood] 25/3/2014 08:53

Plumbing giant Wolseley jumped 61p to 3,365p when it said revenue of £6.412bn from ongoing businesses in the half-year to end-January was 5.2% ahead, including like-for-like growth of 3.2%. Profit before tax was £316m, 63.7% ahead of last year.