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Wolseley, the FTSE 100 building materials supplier, is to change its name to Ferguson plc and quit the Nordic region.
The British company’s transformation announcement came as the company reported trading profit rose 5 per cent for the six months ending in January, and a change of leadership at its key US business.
Ferguson’s current CEO, Frank Roach, is to be replaced by Kevin Murphy, the company’s chief operating officer. Mr Roach is retiring after 40 years with Ferguson.
The group overall has struggled in tough market conditions in Europe, particularly in Scandinavia. Meanwhile, its US business Ferguson has swelled to comprise 84 per cent of group profit.
John Martin, CEO, commented:
We have concluded our review of the Nordic operating strategy and identified a clear and executable plan to return the business to profitable growth. However, there are few synergies with the rest of the Group’s plumbing and heating businesses and we have initiated a process to exit our business in the region.
Its US business, accounting for some three quarters of revenue, continued to grow, with revenue up 5.5 per cent in the States versus 4.5 per cent for the rest of the group.
The group reported residential and commercial markets in the US “remained good and industrial markets improved but were still negative”.
But its other territories fared worse: “There was little growth in the UK heating market. Nordic markets overall were weak, though there has been some recovery in the last two months.”
The group said foreign exchange translation boosted revenue by just over £1bn, but that it will henceforth report in US dollars.
The plumbing and heating specialist faced price deflation and stiff competition in the UK last year.
In September, Wolseley announced it would spend £100m closing 80 UK branches and one distribution centre, triggering some 800 redundancies.
But share prices have risen on expectations of continued momentum in Wolseley’s US business. Analysts at Barclays earlier in March raised their price target for the stock to £56, some 11 per cent above the level at the time.