View the article online at http://citywire.co.uk/money/article/a529495
Wolseley among FTSE fallers after giving cautious profit outlook
The world's largest heating and plumbing distributor posted revenue gains of 5%, but has a cautious outlook for next year.
Shares in Wolseley (WOS.L), the world’s largest professional heating and plumbing distributor, shed 46p, or 2.9%, to £14.90 after the firm presented a cautious outlook for the coming year and issued results showing a 5% rise in revenues.
The company, which operates in 25 countries, today reported an annual pre-tax profit of £391 million, a turnaround from a loss of £328 million last year, with revenues up 5% to £13.56 billion.
Despite the strong performance, which was better than analysts expected, chief executive Ian Meakins said: ‘Recent economic forecasts have weakened, and over time this is likely to have an impact on our markets.’
Sam Cullen, an analyst at Jeffries, said that despite this cautious outlook the company had ‘significant firepower’ to help keep the group moving forward.
‘Results were slightly better than expected – sales up 3%, while trading profit increased 38%. While like-for-like growth rates moderated in the fourth quarter, as expected, the group continued to take share in its major markets. As increased economic uncertainty threatens to weaken markets, we support management’s continued drive for self-help and the plans to re-invest in the business.
‘Though August and September saw similar sales trends in the fourth quarter, management has issued a note of caution moving forward, highlighting the likely impact of recent economic forecasts.’
Other engineering and construction groups also posted falls on the stock market today. Construction and support services company Carillion (CLLN.L) shed 5.5p, or 1.7%, to 322.8p after releasing an interim management statement predicting strong full-year earnings growth and end-of-year net debt to fall below £125 million. The group acquired Carillion Energy Services, the UK's largest supplier of heating and renewable energy, for £298.4 million in April 2011.
Andrew Gibb, analyst at Investec, said: ‘A solid trading update from Carillion, with earnings on track to grow strongly in 2011 and the medium term outlook maintained. Outsourcing opportunities in the UK continue to build and now account for a major proportion of the current bidding activity and pipeline.’
Luxury interior furnishings group Walker Greenbank (WGB.L) also took a hit, losing 0.03p, or 0.06%, to 46.22p. Its half-yearly results show revenues up 11% to £37.4 million, while profits before tax have increased 13% to £2.04 million. The group has increased its dividend from 15p to 20p as growth has been seen in markets in Russia, Japan and China.
Heritage Oil (HOIL.L) slid 5p, or 2.23%, to 219p. The company has gained access to the Libyan oil industry with its acquisition of 51% of Sahara Oil Services Holdings, which has a licence to work in the country, for $19.5 million.
Phytopharm (PYM.L) dropped 0.12p, or 1.75%, to 7p. It reported that it has been granted funding to evaluate Myogane, a drug being developed to fight glaucoma.
Among today's winners is ITM Power (ITM.L), which was up 4p, or 12.12%, to 37p. The clean fuel company announced that its fuel-cell project focusing on air and hydrogen power cells was successful, and the company is now looking to the automotive industry and other fuel supply partners.
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- Walker Greenbank PLC (WGB.L)
- Phytopharm PLC (PYM.L)
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