Builders merchant Wolseley has returned to an annual profit after improving margins and seeing sales rise by three per cent.
Wolseley (WOS), which is headquartered in Leamington Spa, has posted a pre-tax profit of £391 million for the year to July 31 – compared to a pre-tax loss of £328 million last year.
The improvement in profitability came after revenues grew from £13.2 billion in 2010 to £13.6 billion.
The FTSE 100 company was boosted by an improvement in trading margins, which increased to 4.6 per cent from 3.4 per cent the previous year.
Chief executive Ian Meakins said: “We continued to grow our business and revenue growth trends in August and September have been similar to the fourth quarter last year. However, recent economic forecasts have weakened and over time this is likely to have an impact on our markets.
“Wolseley is in good shape: we have strong market positions in large attractive markets with an effective business model and significant opportunities for growth.
“The business is highly cash generative and borrowings are at a 10 year low. We expect to increase investment in the business where we can generate good returns. Operationally, we will remain focused on improving the service to our customers and developing our strategy to gain market share and protect margins. In the current environment, we will remain cautious on the cost base.”
The group revealed its adjusted net debt had fallen from £1.2 billion to £705 million across the period.
The company has completed five small bolt-on acquisitions in the USA and Denmark since last year and agreed a refinancing deal worth £822 million.