Wolsley acquisitions since start of year now at £436m while trading profit jumps 20%.
Building materials supplier Wolseley has spent £14m on five acquisitions, bringing total spend on acquisitions, since the beginning of the financial year, to approximately £436 million.
This month, PBM in France acquired materials firm Charpentes Calonge ('CC') and builders merchant Bigmat Boismat ('Boismat') from Daniel Leroux. Also this month, Tobler in Switzerland acquired pipe distributor Friosol from PanGas. In November, Ferguson acquired South Tahoe Plumbing Supply ('S. Tahoe') from B. G. Solley and M. Solley and this month, Ferguson has acquired the assets of US heating supplier Colgan Distributors, Inc. and Colgan Cabinets, Inc. ('Colgan').
The group, which is due to announce interim results on 21 March, said that business conditions in the group's principal markets had been broadly in line with comments made in the AGM statement on 17 November 2005.
The group's results for the first five months to 31 December 2005, prepared under International Financial Reporting Standards (IFRS), show a strong increase in sales and profits driven by high rates of organic growth in North America and recent acquisitions.
Including the effect of acquisitions, group sales for the five months to 31 December 2005 were up by approximately 25% and trading profit up by approximately 20% on the same period in 2004.
Although Europe remains slow, the US businesses enjoyed a strong start to the year and this encourages us for the months ahead
Group chief executive Charlie Banks
The group's trading margin for the five month period is slightly lower than the equivalent period in the prior year primarily due to commodity price gains last year as well as the impact of acquisitions and additional investments in the business to position the Group for further growth.
Wolseley UK, including Ireland, increased sales by more than 5% and achieved positive organic growth. Trading profit is marginally higher. In view of continued consumer caution, the first five months have proved to be more challenging than the prior year although the commercial sector, including government spending, continues to show a positive trend. The trading margin was slightly lower due to acquisitions and the initial costs of the new distribution centre infrastructure. The new national distribution centre in Leamington Spa is on schedule to be opened by September 2006.
In total, the 22 acquisitions completed to date are expected to add approximately £697 million to group turnover in a full year. Goodwill and acquired intangibles related to these 22 acquisitions is estimated to be around £148 million.
Charlie Banks, group chief executive of Wolseley, said: "We have seen another strong performance for the Group as a whole over the first five months of the year. Although Europe remains slow, the US businesses enjoyed a strong start to the year and this encourages us for the months ahead. Furthermore, the acquisitions and other investments we have made position us well for further growth in the second half."