British construction products supplier Wolseley Plc said trading profit rose 39 percent in the first quarter, helped by revenue growth in the US and Canada as well as cost control measures.
Most markets continued to grow in the first quarter and the Group’s trading performance was slightly ahead of management expectations. Whilst demand has improved in most countries, pricing competition has remained intense, said chief executive Ian Meakins.
The supplier of plumbing and heating products, which recently announced its intent to reallocate its tax residence to Switzerland, posted a trading profit of 159 million pounds for the three months ended Oct. 31, versus 114 million pounds a year earlier.
Gross margin of 27.0 percent was 0.2 percent ahead of last year.
The company, which derives over 80 percent of its revenue outside the UK, said revenue rose 2 percent to 3.47 billion pounds ($5.47 billion) and like-for-like (LFL) revenue increased 4 percent.
In the US, revenue rose 10 percent and LFL revenue went up 6 percent. Canada generated revenue 16 percent ahead of last year, 7 percent on a like-for-like basis.
In the UK, revenue fell 4 percent, but LFL revenue rose 5 percent, with the difference being due to the disposal of businesses. Revenue in France and Central Europe fell 8 percent and 10 percent, respectively.
The company said net debt as at Oct. 31 was 681 million pounds, compared with 1.22 billion pounds in the same period of last year.
In September, Wolseley announced restructuring proposals that will create a new group holding company which will be UK listed, incorporated in Jersey and will have tax residence in Switzerland.
At that time, the group said establishing an international holding company corporate structure will help provide more certainty in its taxation position.
Shares of Wolseley, a FTSE-100 constituent, ended Monday's trading at 1,830 pence on the London Stock Exchange.