Wolseley’s £217.8m shopping spree in the last six months produced results this week as the company revealed a 35% jump in pre-tax profit to £287.2m.
The building materials company has been hot on the acquisition trail, snapping up 13 companies in the first half of the financial year.
In the UK, Wolseley just missed out on buying DIY chain Wickes last year, which was sold to rival Travis Perkins for £950m.
The UK was the best performing part of the business in Europe, driven by the demand in the repair, maintenance and improvement sector, as well as growth in social housing sector.
“The commercial sector, including government spending, and the industrial markets are showing signs of improvement,” said Charles Banks, group chief executive.
Against a slowdown in residential construction, Wolseley’s UK turnover rose 13.6% to £1.15bn and profit increased more than 15%.
The US business accounts for 60% of the FTSE-100 company’s turnover but it has a mere 9% market share. Banks is keen to improve on this, capitalising on the fragmented nature of the sector.
Overall, group turnover rose 10.4% to £5.3bn. Banks said the strong results were because of a solid economy in the UK and US. “It is more a case of steady growth than boom,” he said. “Unemployment is low in the UK, but also historically low in the US. In the US interest rates are low, and historically low in the UK.”
He said Wolseley intended to exploit its international presence. “As long as economies keep chugging away, we are going to take advantage of them,” said Banks. In the UK, he said, risks included the potential loss of consumer confidence. But he said the company had achieved organic growth so far.
The board recommended an interim dividend of 8.8p a share, up 13%.