Wolseley Bets on U.S. Market With Name Change

 

Last week, Wolseley, the British plumbing and heating supplier, best known on this side of pond as the corporate parent of Ferguson Enterprises, announced that it would rebrand itself as Ferguson.

That’s an end to 130 years of history, by the way, since Frederick York Wolseley opened the Wolseley Sheep Shearing Machine Co. in 1887.

Looking at the company’s financials, the move certainly makes sense to take the moniker of its dominant U.S. operation.

“Ferguson now accounts for 84 percent of group trading profit and we have decided to align the group’s name with our most significant brand in our largest market,” said John Martin, Wolseley chief executive in a press release announcing the company’s latest financials. “While the group will be known as Ferguson plc going forward we will continue to use the Wolseley name in the UK and Canada where it has strong local recognition.”

What’s more, the new Ferguson plc will report its financials in U.S. dollars starting on Aug. 1 to minimize currency volatility. The company will remain listed on the London Stock Exchange and a member of the FTSE 100, the stock exchange’s bellwether of prosperity.

In addition to the name change, Wolseley plans to exit it business in the Nordic countries and continue to transform its previously announced plans to revitalize its UK operations.

 “The UK transformation program has started well and we are making good progress clarifying our customer propositions and simplifying our logistics network,” said Martin in a statement. “We have concluded our review of the Nordic operating strategy and identified a clear and executable plan to return the business to profitable growth. However, there are few synergies with the rest of the group’s plumbing and heating businesses and we have initiated a process to exit our business in the region. We have excellent opportunities to generate attractive returns in our other businesses and we will focus resources there in the future.”

To watch a Wolseley video released to explain the name change, click here.

On March 28, Wolseley released the following company highlights cover the first half of its fiscal year:

Financial highlights

  • Revenue 6.7% ahead of last year at constant exchange rates with like-for-like growth of 3.2%.
  • Changes in foreign exchange rates increased revenue by £1,131 million.
  • Gross margin of 28.6%, 0.3% ahead of last year.
  • Trading profit of £515 million, 5.0% ahead of last year at constant exchange rates. Commodity deflation reduced trading profit by £17 million in the USA.
  • Net debt of £1,297 million.
  • Interim dividend of 36.67 pence per share, an increase of 10.2%.

Operating highlights

  • US revenue growth of 9.9% at constant exchange rates.
  • US residential and commercial markets were good, the industrial market improved slightly.
  • UK transformation program on plan and trading held up well in the first half.
  • Strong e-commerce growth with sales of £1.4 billion, now 17% of Group revenue.
  • Completed eight bolt-on acquisitions for total consideration of £271 million and two further acquisitions since the period end.

Corporate highlights

  • Decision to exit the Nordics announced.
  • Agreement to merge Tobler with Walter Meier in Switzerland as previously announced.
  • Group to change name to Ferguson plc.
  • Presentational currency to change to US dollars from 1 August 2017.
  • Frank Roach to retire on 31 July 2017 and Kevin Murphy to succeed him as US CEO as announced separately today.
  • As previously announced Mike Powell will join the Company on 1 June 2017 as Group CFO.

 

 

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