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Wolseley shares have sprung a nasty leak this morning, plumbing 6-week lows to test the 200-day moving average. This comes as investors react to Q3 results which have failed to inspire after management divulged organic revenue growth having slowed markedly since the end of the reported quarter and pre-announced restructuring costs needing to be 33% higher after challenging market conditions resulted in merely flat like-for-like quarterly performance in the UK and Central Europe. The latest Brexit poll suggesting a surge by the Leave campaign adds to an uncertain outlook for Wolseley growth which may be making matters worse, offsetting margin growth, guidance in-line with market expectations and decent 5% revenue growth for the key stateside geography (65% of group revenues; 89% trading profits) where commercial and residential strength helpfully countered well-flagged industrial weakness. Anybody got a mop?
Mike van Dulken, Head of Research, 1 Jun
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