Another set of results from the builders merchanting space seems to confirm a distinct cooling in the construction space.

Builder's merchant Wolseley (WOS) is among the main fallers shedding 4.7% to £36.28 after the £9.74 billion cap posted an interim management statement which points to slowing construction markets. Wolseley's first quarter like-for-like revenue in the UK declined 1.1% where markets remain challenging, as highlighted by recent economic data.


Any growth being experienced in Wolseley's markets it seems is being driven by the group's Ferguson business in the US and investors should only get involved if they are decidedly bullish on the US recovery. Gavin Jago at Peel Hunt sees the US accounting for around 80% of group operating profits in the coming year. Moderating pace of US growth however may prove problematic and while like-for-like revenues rose by 4.5% in the first quarter, this compares less favourably when set alongside 7.1% revenue growth in the fourth quarter.

Elsewhere, Wolseley's performance has been mixed with first quarter revenue declines of 3.7% in Canada and 1.2% in Central Europe being offset by the aforementioned 4.5% growth in the US and a 5.5% sales hike in the Nordic region.

A share buyback at the end of October has pushed debt up to £990 million from £805 million at the end of July.

Issue Date: 10 Nov 2015