Wolseley reported increases in first half profit, revenue and like-for-like growth
Foreign exchange movements and cost cutting helped the results come in ahead of forecasts
The Share Centre recommends Wolseley as a 'buy' for medium risk investors seeking growth
As Wolseley reports its first half results Graham Spooner, investment research analyst at The Share Centre, explains what it could mean for investors:
"This morning, Wolseley, the world's leading supplier of plumbing and heating products, reported a 25% increase in first half profit, as growth in the United States outweighed the tougher trading conditions the group faces in the UK and the Nordics.
"Moreover, the company highlighted that revenue over the period was 6.7% ahead of last year at constant exchange rates, with like-for-like growth of 3.2%. The market seems to have reacted well to the update with shares up more than 7% in early morning trading, hitting a five year high.
"Interested investors may be interested in noting that in the update today, the group confirmed its plans to change its company name to Ferguson Plc, subject to shareholder approval. The move is seen to reflect the importance of its US business changing company, which importantly accounts for 84% of group profit.
"The good news continued for investors as the company said there would be a 10.2% increase in the dividend to 36.67 pence per share. Combine that with the fact further progress is expected in the second half, investors have a lot to be optimistic about.
"We remain positive on the stock, which is up 50% over the last year, and we continue to recommend Wolseley as a 'buy' for medium risk investors geared for growth – although we would advise investors drip feed into the shares. We would also highlight the need to remain focussed on the US economy, as a result of its exposure to the region."