Strong US performance boosts H1 profits at Wolseley

Builders and plumbers merchant Wolseley said it is on track for the full year after a double-digit increase in underlying profits in the first half, helped by record trading margins in the States and strong growth in e-commerce.Adjusted trading profits rose 11.1% year-on-year to £390m in the six months to 31 January.However, reported pre-tax profit sank 67% to £103m after a £245m impairment relating to acquired intangibles in the Nordics arising from the acquisition of DT Group back in 2006.Group revenues rose 8.9% to £6.44bn, up 10.3% at constant exchange rates and 7.8% higher on a like-for-like (LFL) basis. LFL sales from the USA, its largest division with half-year sales of £3.91bn, were up 11.7%.Meanwhile, e-commerce now accounts for 13% of group revenues at £811m.Chief executive Ian Meakins said Wolseley delivered a "good trading performance" and the ongoing trading margin improved by 20 basis points to 6.1%."This was driven by the USA where all of our businesses strongly outperformed their markets and we achieved a record 7.9% trading margin," he said.LFL revenue growth rates across the rest of the group also improved which the company said was driven by targeted investment in sales and marketing.The company raised its interim dividend by 10% to 30.25p per share.However, looking ahead the company expects group LFL growth to moderate to "about 6%", though constant-currency trading profits for the full year should be in line with analysts' expectations.