Wolseley to change name to U.S. brand Ferguson, reflecting regional focus
Heating and plumbing supplier Wolseley (WOS.L) is changing its name to match its U.S. brand of Ferguson, a business that accounts for 84 percent of its trading profit, and is also pulling out of the Nordic region.
Chief Executive John Martin said Wolseley, which started life in 1887 manufacturing machine tools and was involved in early motor car production, would keep its main market listing in London where it is a constituent of the FTSE 100 index.
The renaming of the parent company, subject to investor approval, alongside news that Wolseley will switch to reporting results in dollars reflects its focus on U.S. growth as Britain and continental Europe remains challenging.
"We have decided to align the group's name with our most significant brand in our largest market," Martin said.
"We will continue to use the Wolseley name in the UK and Canada where it has strong local recognition," he added.
Wolseley's shares gained over 8 percent to their highest since 2007 after the company said trading profit rose 25 percent to 515 million pounds ($646 million) in the six months to the end of January.
Martin said Wolseley would make more of its group profit in the United States over the next five years, as continuing growth in the residential and commercial markets would push the company to hire more people and buy more assets there.
"I think we'll become more American over the short term," Martin said.
Over the second quarter, U.S. like-for-like revenue growth accelerated to 6.7 percent year-on-year, the strongest percentage growth of all of Wolseley's regions.
The Nordic region accounts for only 3 percent of trading profit and the company said there were few synergies with the rest of its business.
Martin said the company would negotiate with vendors in the UK to offset an expected 3-4 percent increase in its cost of goods sold later this year.
(Reporting by Esha Vaish in Bengaluru; Editing by Louise Heavens and Keith Weir)