Manufacturers
to set up Recycling Plant:
‘REPIC’
to start operations in Spring
Manufacturers are setting up a company to manage the recycling operations
under new European law which gives them responsibility for discarded electrical
and electronic consumer products. REPIC – Recycling Electrical Producers
Industry Consortium – is the working title of the company, which
will begin setting up in the Spring.
They took the decision at a special meeting in London and issued an immediate
invitation to the rest of industry: 'Come and join us.'
Twelve companies committed themselves to funding of £30,000 apiece
to get the company up and running. They are Alba; B&W Loudspeakers;
BSH Home Appliances; Glen Dimplex; Hoover Candy; In-Sink-Erator; Kohler
Mira; Merloni Elettrodomestici UK; Numatic; Philips; SMEG; and Whirlpool.
AMDEA and Intellect are helping their member companies to establish the
producer consortium which will manage all the processes required for manufacturers
to meet their obligations under the new Waste Electrical and Electronic
Equipment Directive [WEEED] from August 2005. SEAMA are also supporting
the initiative.
A final draft of the Memorandum and Articles of Association for a member-based,
not for profit company will be put before a meeting on 26 January. The
consortium will be open to producers from the domestic appliance, consumer
electronics and small appliance sectors. As defined by the Directive,
these will include import agents and some retailers, as well as manufacturers.
The REPIC company name has been registered at Companies House, and three
Web domains have been registered in it’s name. A job specification
for a chief executive officer to head up operations has been agreed, recruitment
specialists have been briefed and advertisements for the six-figure salary
package post will appear shortly. The plan is for the company to be launched
early in the new year.
As Founder Members of the Consortium, the twelve companies have agreed
to loan it £20,000 for two years. The Founder Member list will remain
open to any other company until the end of March. There will be a flat
membership fee for Founders of £10,000 – with a lower rate
for SMEs. But after the 31 March deadline, the Membership Fee will be
set at £30,000 – £6,000 for SMEs.
The government is preparing Regulations requiring all Producers to register
between August this year and June 2005, possibly surcharging those who
register after March 2005. From 1 January, DTI are proposing that these
companies will be required to provide sales data to enable market share
to be calculated to determine their responsibility for waste product.
REPIC think it likely that the registration authority may well ask which
compliance scheme the applicant intends to use, or will otherwise record
the company itself as taking direct responsibility for picking up and
treating waste product. The Consortium will not only provide recycling
services – it will also be heavily involved with the authorities
in determining total market size so as to ensure producers do not take
an unfair 'market share' burden. The reduced Founder Member fee for Epic
therefore has an added attraction to companies who have not yet applied.
The Director General of AMDEA, Peter Carver, and Intellect’s Hugh
Peltor announced the new company at a special meeting with DTI officials
in charge of implementing the WEEE Directive in the UK. They explained
that REPIC would write into its constitution commitments to high standards
of environmental good practice in all its activities.
They made clear at that meeting that the Consortium would operate on a
free market basis, and will be keen to reap the benefits of a competitive
market among logistics and treatment service suppliers.
The consortium will benefit from economies of scale and competition among
companies pitching for its business. With no shareholders to press for
good profits, the aim is to offer attractively low prices.
Over 200 other companies eligible to join REPIC will shortly receive a
letter from the trade associations, explaining the advantages of joining
and inviting them to sign up.
View
the EC Directive at the following link on the DTI website .
http://164.36.164.20/sustainability/weee/index.htm
Kitchen
Showcase 2004: Design inspiration for the Kitchen Industry
For those involved in the manufacture, design, specification, sale or
procurement of kitchens and related products, there’s only one place
to be between 1st - 3rd July 2004 - Kitchen Showcase 2004 at the Commonwealth
Institute, Kensington, London.
Back less than 12 months after its launch in September 2003, Kitchen Showcase
has more than doubled in size, and is without peer in the UK trade market.
Kitchen Showcase 2004 provides architects, interior designers, kitchen
retailers, manufacturers and property developers with the UK’s largest
ever professional showroom. A showroom boasting more than 24 state-of-the-art
kitchen sets created by leading manufacturers and designers using the
very latest materials, technology and design thinking. Quite simply a
design inspiration.
As a gathering of the who’s who of the industry, Kitchen Showcase
provides a unique environment enabling those attending to:
• research new products and developments
• identify new trends
• reach new customers
• source new suppliers
• establish new partnerships
• discuss product and design detail
In addition to the main exhibition, Kitchen Showcase offers a number of
extra features:
• Masterclass 04 – a conference and seminar programme, now in
its fourth year, featuring industry experts from around the world. This
programme allows delegates to supplement the showcase with some highly
specialist presentations.
• A free kitchen design clinic – a lively programme of debates
and presentations, less formal than Masterclass but involving contributions
from many of the main exhibitors
• An open day for consumers. In 2003 the final day was open to select
consumers and proved hugely successful with discerning customers giving
invaluable market input. 2004 will be no different.
A list of participating companies and speakers is available on request.
Kitchen Showcase 2004 runs from 1st - 3rd July 2004 at the Commonwealth
Institute, Kensington, London. 1st - 2nd July trade only, 3rd July open
to the public with advance tickets.
To
find out about exhibiting at Kitchen Showcase call Kevin John on 01803
839399 or email mailto:kevin.john@kbdmagazine.com
To register for tickets for Kitchen Showcase or the Masterclass conference
call Kevin or email mailto:kitchenshowcase@kbdmgazine.com
Fagor
UK gets a move on…
As a result of continuing expansion, Fagor UK has moved its sales office
and logistics centre to bigger premises in North London and Fareham respectively.
The new contact details for the sales office are as follows:
Fagor Appliances
Leroy House
Unit 3P
436 Essex Road
London N1 3QP
Tel: 020 7354 0044
Fax: 020 7354 0789
Email: sales@fagorappliances.co.uk
Fagor UK is a subsidiary of Fagor Electrodomésticos, a division
of the Mondragón Corporación Cooperativa (MCC) based in
the Basque Country in Spain. Founded in 1956, the Fagor Group manufactures
in three continents. It is the market leader for household appliances
in Spain, with a 24% share, and maintains subsidiaries across Western
and Eastern Europe. The company employs over 6000 people.
KBSA
Member on Radio Ulster
A KBSA retail member from Northern Ireland was interviewed on a top consumer
show on Radio Ulster. Mark Robinson of Robinson Interiors was interviewed
on the Saturday morning show, ‘On Your Behalf’, when they investigated
a listener’s complaint about a kitchen installation.
The programme looked at the problems faced by a customer who was unhappy
with the way the white carcass of her kitchen was visible below the bottom
of the oak doors. Mark was able to offer some opinions on how this could
have been caused and also had the opportunity to promote the added protection
that consumers can gain from dealing with KBSA members.
'I welcomed the opportunity to assist with this programme,'says Mark.
'It is not always possible to help resolve a dispute but it is useful
to have the opportunity to advise consumers on how they can best safeguard
the substantial investment they are likely to make when purchasing a new
kitchen.'
KBSA Chief executive Graham Hayden added, 'We are delighted that we are
able to provide the media with knowledgeable members who can make independent
observations in such cases. Mark is a well respected retailer who has
acted as an independent commentator on many other occasions.
“This kind of opportunity enables us to speak directly to the consumer
about the benefits of dealing with KBSA members. The programme generated
a number of enquiries via the helpline and the KBSA website which where
provided on Radio Ulster’s own helpline and website.'
John
Sydney Featured in Major TV Documentary
John
Sydney contemporary bathrooms fittings were featured on the recent documentary
TV programme, which followed the conversion of an old-fashioned house
in Belgravia into a £1.25m, hi tech home. John Sydney brassware
and accessories were specially selected by the Architects and celebrity
Designers for this prestigious project for their superior design and quality.
All the profits from the sale of the house went to raise funds for Children
in Need. The two bathrooms at the property epitomised the latest in sophisticated
style and included advanced shower and mixer technology from John Sydney.
Judith Gibbons, Marketing Manager at John Sydney explains: ‘The Architects
and Designers fell for our latest JS2 range of fittings for the two bathrooms,
which looked stunning against the contemporary styled sanitary ware selected.
The fact we could also supply complementing accessories, such as soap
dispensers and towel rails, was a real asset.’
The TV documentary was the culmination of a TV series, in which the celebrity
Designers had transformed houses in a variety of locations in the country,
each time up-grading until they reached a house worth over a million pounds
in the highly desirable area of Belgravia in London.
John Sydney supplied its new range of JS2 basin and bath mixers, JS2 accessories
and JS2 shower valves and The Rigid Riser Rail for the shower. All products
were provided with the standard ten year guarantee and comply fully with
WRAS guidelines.
The John Sydney Collection of bathroom fittings is sold nationally via
a selective network of bathroom dealers and specifiers.
Tel: 01827 304000
Web: http://www.johnsydney.com
DYNAMIC
SPACE® will be Focus of Blum's ZOW2004 Presentation
DYNAMIC SPACE® – the new quality of space usage and motion in
kitchens – is what fittings manufacturer Julius Blum will focus on
at ZOW 2004. In keeping with Blum’s slogan 'perfecting motion together',
the company will make the most of the show to discuss new kitchen standards
with visitors. To this end, planning and fit-out solutions will be on
display which are based on the division of kitchens into five activity
zones: provisions, storage, cleaning, preparation and cooking/baking.
Thanks
to Blum’s Zone Planner, which will be presented for the first time
at ZOW, individual furniture elements can be assigned to the correct zone
in a just a few steps. This new planning aid also shows users how to put
the space available to the best possible use. The new planner is the logical
'sequel'to Blum’s Storage Space Planner and assists professionals
in their efforts to plan kitchens. Designers can quickly establish the
individual requirements of kitchen users which are influenced by lifestyle,
size of household and requirements. As a result, five functional zones
are generated which are each a 'centre of maximum efficiency'.
By means of simple, easy-to-understand examples, Blum can immediately
demonstrate the enhanced comfort held out by these kitchens. String studies
of kitchens planned 'before'and 'after'clearly show that users need to
cover far shorter distances to do the same number of jobs if the layout
of units is correct. And the Storage Space Planner ensures that the articles
required for the individual jobs can be stored exactly where they are
needed.
The examples on display at ZOW will demonstrate how kitchen activity zones
can be equipped with suitable carcases. Blum will be presenting modern
storage space solutions for corner cabinets, sink units and large toe-kick
or plinth pull-outs. The ingenious combination of Blum’s standard
TANDEM pull-out components is not the only thing that makes these solutions
convincing. A further strong point is the multitude of possibilities of
differentiation which allow solutions to be adapted to individual furniture
designs. Then there are special features such as BLUMOTION – the
perfect motion that closes doors and drawers gently and quietly –
which produces an emotional response every time it is used. Users are
fascinated by the feather-light glide and silent closing action of drawers,
pull-outs and cabinet doors even when fully laden.
To Blum and partners, 'perfecting motion together' means communicating
the diverse benefits held out by DYNAMIC SPACE® in terms of improved
ergonomics and comfort in such a way that end users are filled with enthusiasm
– so much so that the old 'straight jacket'of only considering cost
becomes unimportant!
Tel: 01908 285700
Fax: 01908 285701
Web: www.blum.com
Adding
a Country Feel with Pippy Oak
Although
there has been a lack of traditional finishes as contemporary styles become
increasingly popular, BLP UK Ltd have not forgotten this important market
and have recently introduced a new Pippy Oak veneer for their MDF wrapped
profiles and profile framed doors.
The veneer which has a light tan colour with small tight clusters of knots
(where the word pippy is derived), is a highly valued feature by master
craftsmen for its decorative appearance.
BLP UK Ltd are one of the UK’s leading profile wrapping manufacturers
and have years of experience in the veneer industry. These sections from
BLP give the furniture manufacturing industry the opportunity to introduce
this popular traditional style into their ranges offering an excellent
alternative to solid wood.
Barry Berman, Sales and Marketing Director for BLP said 'We have all got
carried away with the new modern/contemporary look that is being introduced
from Italy and Germany, but we must not forget the traditional market
which is still very popular in the UK'.
Since the introduction of the new Pippy Oak, BLP is already receiving
orders and as contemporary styles come and go, finishes such as Pippy
Oak will be around for a long time.
Telephone: 01302 794254
WEB: www.blpuk.com
Armeg
Innovation at Interbuild 04 - a 'Bit' Special
Age old problems associated with drilling through porcelain tiles are
set to become a thing of the past when Armeg unveils its latest creation
at Interbuild 2004.
The
innovative manufacturer of power tool accessories will use the event at
the NEC from April 25 to 29 to showcase its brand new PTC (Porcelain Tile
Cutters) Drilling Range.
Armeg Sales and Marketing Manager Scott Devonshire said: 'Working in conjunction
with end-users, Armeg has developed a high performance series of cutters
that create small diameter fixing holes and large diameter piping and
through holes.
'Before the PTC existed, a plumber could walk into a freshly tiled bathroom,
take one look at the walls and walk straight back out saying that there
was no chance of him drilling through the tile.
'Any job, no matter how large or small would be held up while a tiler
or plumber attempted to drill through and on many occasions, the tiles
themselves would be broken through the heat generated by poor and unusable
alternatives.
'But now this new application is becoming huge throughout the world as
porcelain tiles become more and more popular thanks to the quality of
their production and life expectancy.'
Scott added that the product has already been endorsed by Villeroy &
Boch and had received numerous testimonials from grateful end-users by
solving a serious and time-wasting problem.
Armeg has received many awards for product innovation over the years for
the development of time saving solutions for professional tradesmen.
Such products as the EBS (electrical box sinker) and SBC (solid board
cutter) are two examples that have been recognised by the trade.
The company has also won a Best of the Best award from the Governments
Smart Funding scheme for being one of their top 10 innovators.
Armeg is just one of around 1,000 companies who will be exhibiting at
the 50th Interbuild this year.
Entry is £20 on the day but free to anyone who registers in advance
either online at http://www.interbuild.com
or by calling the Registration Hotline on 0870 429 4558.
http://www.armeg.com/index.html .
ASFI
Welcomes More New Members
Originally formed for the purpose of providing an exhibition for UK supplies
companies, ASFI – The Association of Suppliers to the Furniture Industry
is now a strong trade Association with a portfolio of attractive benefits
including:
•
Generous discounts for exhibiting at the biennial ASFI Exhibition
• Inclusion in the widely distributed ASFI directory
• Credit protection through fortnightly credit reference reports
• Availability of government assistance on export activities
• Grants to assist in exhibiting at overseas trade shows
• Free Business Support Helpline
• Low cost personal and family Medical Insurance Scheme
• E commerce assistance though UK Online
• Representation on BSI committees developing standards
• Inclusion on the ASFI product database and website
• Preferentially booking rates at Thistle Hotels
• Quarterly Trade Talk Newsletter
With over 200 members, companies that have recently been welcomed into
the Association include:
SCF Hardware, Jowat (UK) Ltd, Lord Distribution Ltd, SMI Hardwoods, Nycholwood
Ltd, Walker Bros (Elland) Ltd, Mallinson Ltd, Carlisle Brass Ltd, Barton
Products Ltd.
Everyone in the furniture supplies industry should be interested in ASFI’s
activities. If you would like to know more about becoming a member or
would like more information on the ASFI Supplies Show, 10-13 October,
NEC, Birmingham
T: 01332 265511
http://www.asfi.co.uk/
mailto:info@asfi.co.uk
Interiors
of Harrogate Celebrate 2003 Sales Sucess
Interiors Of Harrogate reached over £2m turnover for the year ending
December 2003 (excluding fitting charges). Directors Paul and CathyWhiers
puts this increase in turnover down to good sales designers and consistent
quality suppliers
Interiors of Harrogate is a kitchen retailer with 800 sq ft showroom,
employing three full time kitchen designers. It has been established 10
years and specialises in selling Edwin Loxley, Hacker and Callerton kitchens
The retailer he has only just taken possesion of the showroom next door
and is installing a Daval bedroom studio and a kitchen appliance centre
Contact: Paul Whiers
mailto:paul.whiers@btconnect.com
01423 528885
http://www.harrogateinteriors.co.uk/kitchens.html
Everything
Bar the Kitchen Sink
RoofWright
has developed new ideas for kitchen/dining room extensions with its 21st
century 3D conservatory software.
On a laptop in front of the customer, using either a standard template
or the freehand editor, RoofWright makes it simple to create the required
extension shape and size. Especially with the kitchen diner extension
in mind, RoofWright has introduced new roof cladding choices of tiles,
slates and wooden shingles.
A new Window and Door editor allows the user to show the customer on screen
exactly how windows and doors will look from any angle, in any position,
open or closed. Frames can be split horizontally and vertically with multiple
apertures and, of course, selections made of glazing design and colours.
Evaluation copy from http://www.roofwright.com
or 0161 426 1120
Williams
Knows how to Offer the Best in New Refrigeration Solutions at Hotelympia
Williams
Refrigeration - part of Aga Foodservice Equipment (AFE) – is joining
forces with its sister companies on the largest single stand at Hotelympia
2004. The company says that the wide range of quality refrigeration equipment
on display is set to reinforce Williams’ position as the leading
refrigeration solutions provider to the UK and global market. (STAND N3130,
North Hall, ExCEL LONDON, 23 - 27 Feb 2004).
Williams
will be showcasing its ‘Know How’ through the range of refrigeration
solutions on display which include reach-in cabinets, counters, blast
chillers, coldrooms and bakery solutions, offering performance and energy
efficiency.
Williams says it has an understanding of the needs of the foodservice
industry and as such will be launching five pioneering products at Hotelympia.
A Williams Rapid Bottler Chiller which can chill 48, 330ml bottles in
less than 30 minutes, is aiming to be a big hit with the fast moving bar,
pub and hotel, restaurant sector where customer demand can often outpace
the bar’s capability to satisfactorily chill beers in the required
time, especially in the summer months. Similarly, Williams has also developed
a Rapid Glass Chiller, to be launched at Hotelympia, which can chill,
in just three minutes, a basket of glasses straight from the glasswasher
ensuring customer satisfaction every time.
Williams Refrigeration will be further highlighting its product innovation
with the new Induction Hob Counter, combining refrigeration teamed with
an induction hob, ideal for quickly heating small quantities of sauces
and other ingredients offering even more flexibility in the kitchen.
Tim Smith, Managing Director, Williams Refrigeration, comments: 'Hotelympia
is an exciting time for Williams Refrigeration as we can directly demonstrate
to our customers the width and breadth of our innovative, market-leading
refrigeration solutions. The product range on display will offer something
new for everyone and because we also understand the importance of value
for money solutions, both at the time of purchase and through the whole
life of product, we also offer professional advice, sales service and
technical support.
'Our
ongoing mission is to make it easier to do business with Williams,' says
Tim, 'which will be further enhanced with a new quotation package and
coldroom design software both simplifying and speeding up the processes
of coldroom design and production of quotations.'
A key focus for Williams customers in 2004 will be refrigeration products
that offer energy savings and which consider environmental impact, as
Tim says: 'Our engineering team has developed enhanced refrigeration systems
on all our products to offer increased energy efficiency while recognising
the importance of balancing this with performance. This ensures that our
equipment continues to comfortably handle the practical rigours and operation
of modern kitchens while ensuring food safety at all times.'
Williams will be showcasing cabinets with half doors and drawers which
offer increased energy efficiency as well as its Glycol Secondary Refrigeration
System which is proving to be of great interest to customers. It will
once again be on show at Hotelympia as it delivers fast pull-down temperatures,
saving on energy while offering enhanced operational efficiency.
More details on Williams’ extensive range of products from commercial
refrigeration to bakery equipment including a wide range of Gastronorm
cabinets and Reach-in and Roll-in Blast Chillers and local distributors
are available on free phone 0800 526 517
http://www.williams-refrigeration.co.uk
Hemscott makes Topps Tiles its 'Share of the Week'
Hemscott,
the financial analyst, has made Topps Tiles its 'Share of the Week in
in its first email newsletter of the year: 'What a year it's been for
Topps Tiles. The shares in the ceramic tile and wood flooring group have
doubled over the past 12 months as investors latched onto what looks like
a sustainable growth story and re-rated the shares.
This week's annual meeting provided more good news - like-for-like sales
are up 16% since September, even after stripping out the contribution
from faster-growing new stores.
The question now is whether all the good news is in the price, with the
shares trading on a forward price-earnings ratio of 17. Steve Frazer weighs
up the pros and cons.That Topps Tiles is a genuine growth story is not
in question. But, having issued an impressive update on trading today,
can the highly-rated shares provide investors with a reasonable rate of
return.
It is not every day that investors stumble across a genuine growth story
but that is exactly what Topps Tiles is. From profits of 5.6m just five
years ago, this year investors can expect over £22m at the pre-tax
level, if analysts at broker Seymour Pierce have called it right.
The broker raised its forecasts for both this year and next this morning
on the basis of Topps' upbeat update on recent trading. At its AGM the
company told shareholders that trading had gone "extremely well"
in the first 14 weeks of the current year. Not 'arf, like-for-like sale
are up 16% since the end of September, and that's after stripping out
the contribution from faster growing new stores.
However, while most might have expected today's good news to fuel another
surge in the share price, the reality is that the stock is down 9p to
591p at midday. Dig into the recent past, however, and this potential
mystery becomes crystal clear.
Since the beginning of December the shares have risen 12%, while since
the last year ended (at the end of September) the rise is an even more
astonishing 33%. Rewind still further and you'll discover that the shares
have more than doubled over the past 12 months, although that does include
the very pit of a three year bear market, in March.
Is it therefore any wonder that some investors may have taken today's
New Year good news to lock-in some well-earned profits.
That said, those that did may come to regret their decision because the
long-term growth prospects for Topps remain attractive. Growth in the
tiles market continues to outperform the rest of the home improvement
sector for a number of reasons.
For example, in spite of the 'come back to carpet' campaign, people are
still switching to hard floor coverings from shag-piles as many of us
Brits chase the 'continental' style of living. Also, there are an increasing
number of rooms in households where tiles are appropriate, like second
bathrooms, extended kitchens and conservatories. Finally, underfloor heating
is also driving demand.
Analysts at Altium Securities reckon the tile retail market is growing
at around 18% a year, and will continue to do so for the next three. Yet,
while Topps may be the UK's leading specialist, it still commands no more
than 17% market share. That will increase over the coming years and the
company is already beginning to strangle many smaller independents.
Add to this the company's aggressive expansion drive, where it plans to
open 24 new outlets this year. The doors have already been flung open
on five. The ultimate target is 350 nationwide compared to its current
200. And the real beauty is, all this planned development should be self-funded
by strong cashflows.
Last year (albeit a 16 month period after changing its year end) the company
generated £15.2m against £4.6m in the previous 12 month period.
That's still almost three times as much, even on a comparable basis. Such
strong cash creation will allow Topps to not only meet its expansion needs,
but to feed the dividend in line with earnings growth.
Wolseley
plc Pre-Close Period Trading Statement for Interim Results
Wolseley plc, the world's largest specialist trade distributor of plumbing,
heating and building materials products, issues its regular trading statement
prior to entering its close period. The interim results for the 6 months
ending 31 January 2004 are due to be announced on 22 March 2004. Business
conditions in the group's principal markets have been broadly in line
with comments made in our AGM statement on 21 November 2003. However,
the UK and US distribution businesses have performed strongly, outperforming
their local markets.
On a constant currency basis, and including the effect of acquisitions,
group sales and trading profit for the five months ended 31 December 2003
are up by 25.2% and 26.5% respectively, compared to the equivalent period
in the prior year. After currency translation, group sales were up 23.1%
and trading profit up by 24.4%. The adverse currency translation effect
on trading profit was pounds Sterling 2.9 million. Overall, for the five
months to 31 December 2003, the group has seen a slight increase in the
trading margin compared to the equivalent period in the prior year.
Further details of market conditions in each of the group's business segments
are set out below.
North American Plumbing and Heating Distribution
The picture in the USA continues to vary both geographically and by market
sector but overall the business is performing strongly. Sales in local
currency in the US plumbing operations for the five months to 31 December
2003 are up by more than 10%, and trading profit is up by more than 20%,
on the prior year. Virtually all of the growth is organic.
The industrial and commercial sector remains the weakest segment and is
unlikely to show any significant improvement before the second half of
2004. Housing related activity has held up well, although, as previously
reported, there has been more emphasis on entry level housing compared
to high end housing. The repair and remodelling market remains strong
and is becoming an increasingly important element of overall construction
spend in the USA.
An improvement in the net margin for the five months to 31 December 2003
compared to the same period last year was achieved principally due to
increased throughput at the distribution centres and focus on organic
growth, despite the costs of the integration of previously acquired US
plumbing operations. A new distribution centre at Richland in the State
of Washington was opened in November 2003. The business remains on track
to achieve a 6% trading margin in this financial year, a year ahead of
schedule.
The Canadian market is recovering well from SARS, power cuts and forest
fires. Wolseley Canada has outperformed the market generally and in local
currency terms achieved a double-digit increase in sales over the same
period in the prior year. Trading margin, however, was slightly down as
a result of acquisitions and investment in infrastructure in order to
sustain future growth.
US Building Materials Distribution
Encouragingly, aggregate US housing starts remain robust and the inventory
of unsold houses at around 4.1 months, compares favourably to the long-term
average of around 6 months. However, the wide regional variations, previously
reported, continue in this business with certain markets still softening.
Commodity lumber prices, which directly affect approximately 40% of Stock
Building Supply's product range, recovered in the period largely due to
supply problems resulting from forest fires in Canada and a weaker US$.
For the five months to 31 December 2003, average lumber prices of $340
per thousand board feet were 20.6% up on the prior comparable period average
of $282 per thousand board feet. Higher lumber and structured panel prices
have had the effect of increasing Stock's local currency sales by $178
million (16.1%) in the current five-month period compared to the same
period in the prior year.
The restructuring of this business to achieve improved market focus and
reduce the cost base is on track. These measures are still expected to
achieve cost savings of $5 million in this financial year and $10 million
in 2005.
Overall, mainly due to lumber and structured panel price increases and
acquisitions, sales in US$ were up more than 20% for the first five months
and trading profits were up more than 30% compared to the same period
in the prior year. Organic growth of more than 3% was achieved in the
first five months.
European Distribution
The UK has been the most positive of the European markets which the group
services, in the current financial year where demand in the repairs, maintenance
and improvement sector remained strong. Despite the weakness in the industrial
and commercial markets, Wolseley's UK operations recorded double-digit
sales and trading profit growth in the first five months, with organic
growth of more than 6%. The trading margin maintained the upward trend
of the second half of the last financial year.
The markets across the Continental European businesses continue to be
broadly flat and are likely to remain so for the remainder of this financial
year. However, the majority of the group's businesses are showing sales
growth. Profit growth was achieved in France, Italy and Luxembourg.
Sales in Brossette, France, were up on last year mainly as a result of
acquisitions. The benefits from an improvement in public works programmes
compensated for the effects of the poor industrial environment. The trading
margin improved slightly.
Both Pinault Bois & Materiaux ("PBM"), which was acquired
on 7 July 2003, and Tobler, which was acquired on 1 December 2003, performed
in line with expectations. Good progress is being made in identifying
and delivering synergies between PBM and other Wolseley group companies.
Financial
The group's financial position remains strong with group gearing, as at
31 December 2003, of around 55% at current exchange rates (compared to
46.6% at 31 July 2003). The higher gearing reflects acquisition spend
of pounds 67 million in the five months to 31 December 2003 and increased
working capital necessary to support strong business growth. The interest
charge is higher than the corresponding period in the prior year, reflecting
the acquisition spend partly offset by lower interest rates and additional
cashflow.
Outlook
Prospects for further good progress in the second half are encouraging.
Whilst the translation effect of the weak US$ impacts upon the reported
results, the underlying performance of the group remains strong despite
mixed market conditions. These factors are unlikely to change significantly
in the short term although as the US economic recovery continues to gather
pace, this should present further opportunities for growth. The Wolseley
board is confident that the group's strong financial position, combined
with its strategy to deliver value enhancing opportunities from organic
and acquisitive growth, will continue to stand the group in good stead
over the long term.
Charlie Banks, Group Chief Executive of Wolseley said:
'We are delighted with the first five months performance and we are optimistic
about the prospects for the remainder of the financial year. The underlying
performance of the group remains strong demonstrating the resilience of
our business arising from our wide geographic spread and broad product
base. With a tight focus on costs and a strong balance sheet, Wolseley
is well placed to deliver its growth strategy both organically and through
bolt on acquisitions.'
Exchange Rates
The average profit & loss account translation rate for the first five
months was $1.6654 to the pound 1 compared to $1.5696 for the comparable
period last year, a fall of 5.8%, and euro 1.4297 to the pound 1 compared
to euro 1.5736 a rise of 10.1%. Should the exchange rates between the
US$ and the pound, and the euro and the pound, remain at the January forward
rates ($1.8453 and euro 1.4351) then the averages for the year as a whole
would be $1.7704 and euro 1.4328 and this would have the effect of reducing
sales and trading profit for the first five months of the year by a further
pounds 132.8 million and pounds 7.4 million, respectively.