Insider Media Limited

Wolseley has swung back into the black in its latest year-end results with a pre-tax profit of £391m. The Leamington Spa-based heating and plumbing specialist said it now planned to make a capital investment of £160m, including the creation of 90 new stores.

Wolseley recovered from its £328m loss in 2010 after selling off two of its divisions and securing revolving credit facilities worth £820m.

For the year to 31 July 2011, the company posted revenues of £13.5bn, a 3 per cent increase on its 2010 year-end sales of £13.2bn.

Trading profit was £622m, a 38 per cent rise on last year.

Headline earnings per share soared 93 per cent, from 74p in 2010 to 143p, while adjusted net debt was reduced by £490m over the year.

During the course of the year, Wolseley sold off its Electric Center and Brossette businesses in a £310m deal. This morning, it said the disposal was "largely completed".

In August, the company obtained revolving credit facilities totalling £820m, consisting of European and US funding.

Five small bolt-on acquisitions were made by Wolseley over the 12-month period in the USA and Denmark.

Ian Meakins, chief executive, said: "Our ongoing focus on market share gains, protecting gross margins and tightly controlling cost led to a £172m improvement in trading profit and trading margins 120 basis points ahead. Our disposal programme is now substantially complete, enabling us to focus on our great businesses in attractive markets."

Wolseley said it now planned to make a £160m planned capital investment, which would introduce 90 new stores to the market.

Meakins said: "The business is highly cash generative and borrowings are at a ten-year low. We expect to increase investment in the business where we can generate good returns. Operationally, we will remain focused on improving the service to our customers and developing our strategy to gain market share and protect margins. In the current environment, we will remain cautious on the cost base."