reports
- Denise Molina
Impressive U.S. Revenue Growth While Margins Still Flatlining; Shares ...
With nine months of its fiscal year now in the bag, Wolseley seems to be successfully growing its U.S. market share but at the expense of margin expansion. Organic revenue grew 9.4% in the U.S. and 6% at the group level in the first three quarters of the year. Since 2011, the company has maintained average organic U.S. revenue growth of nearly 8%--very solid. Nevertheless, the company’s margin has not benefited from the top-line growth, with U.S. trading profit margin flatlining at 8% since 20...
- Denise Molina
U.S. continues to deliver on growth but not on margin.
Along with its first-half results, no-moat Wolseley announced its plan to exit the Nordic region due to the lack of synergies. As we have always been sceptical of the value of carrying these low-margin businesses that lacked distribution and product overlap with its main U.S. business, we were happy to see this announcement. The Nordic business makes up 12% of group revenue but only 3% of trading profit and has had a shrinking top line to boot. We will be reviewing our model for the eventual exi...
- Denise Molina
Wolseley Continues to Shed its International Assets; Good News to U.S....
Along with its first-half results, no-moat Wolseley announced its plan to exit the Nordic region due to the lack of synergies. As we have always been sceptical of the value of carrying these low-margin businesses that lacked distribution and product overlap with its main U.S. business, we were happy to see this announcement. The Nordic business makes up 12% of group revenue but only 3% of trading profit and has had a shrinking top line to boot. We will be reviewing our model for the eventual exi...
- Denise Molina
We believe no-moat Wolseley is overvalued.
Wolseley’s first-quarter fiscal 2017 is tracking in line with 2016 and mildly ahead of our full-year forecasts for revenue growth and trading profit margin. Revenue growth increased just under 2% on an organic basis, with the 3% decline in international masking the 4% growth at Ferguson, and the group trading profit margin was 7%. We maintain our estimates and GBX 3020 fair value estimate with only one quarter of results. In the U.S., Wolseley's largest market, the net implications from the re...
- Denise Molina
Wolseley Inching, but Not Quickly Enough, Towards a Concentrated Portf...
Wolseley’s first-quarter fiscal 2017 is tracking in line with 2016 and mildly ahead of our full-year forecasts for revenue growth and trading profit margin. Revenue growth increased just under 2% on an organic basis, with the 3% decline in international masking the 4% growth at Ferguson, and the group trading profit margin was 7%. We maintain our estimates and GBX 3020 fair value estimate with only one quarter of results. In the U.S., Wolseley's largest market, the net implications from the re...
- Denise Molina
Welcome Restructuring of U.K. Business for No-Moat Wolseley; Shares Ov...
Central to our investment thesis and no-moat rating for Wolseley is the drag from the firm's international business, an underperformer lacking synergies with the star in its portfolio, Ferguson in the U.S. Because of this, we welcome the news of a planned restructuring of the firm's U.K. business as well as a review of the Nordic business. The company reported full-year 2016 results with growth in group operating expense outpacing revenue growth, at 6% and 4% on a constant currency basis, respec...
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