Results round-up: Wolseley, AA, Ladbrokes Coral, Card Factory

Plumbing and heating supplier Wolseley on Tuesday unveiled a name change, withdrawal from the Nordics and a fall in half year pre-tax profits.

The company said it would now be called Ferguson, in recognition of the US division that now pulls in 84% of group trading profit. It would still be using the Wolseley name in the UK and Canada for its more established operations.

Pre-tax profits for the period fell to £328m from £367m as revenues rose 24.5% to £8.46bn, boosted by £1.1bn due to the Brexit-battered pound. The profit fall came after a £102m impairment charge on the Nordic operation and exceptional costs of £124m.

There was a 10% rise in the in interim dividend of 36.67p a share.

Wolseley said it was now pulling out of the Nordics due to lack of synergy with the rest of its businesses.

"Like-for-like revenue growth since the end of the period has been about 4.5% for the group and 5.5% in the USA. Commodity deflation has been negligible in this period. We continue to execute our strategy of investing in profitable growth and expansion where appropriate while keeping tight control of the cost base. We expect the group to make further progress in the second half," the company said.

Shareholders will vote on the name change on 23 May 23. The company is also altering the group's presentational currency to dollars from sterling "to remove the largest driver of translation volatility and provide greater transparency of the underlying performance of the group".

AA

Vehicle membership services provider AA posted its results for the year to 31 January on Tuesday, with trading revenue up 1.6% at £940m.

The FTSE 250 firm said trading EBITDA was up 0.2% at £403m, while its trading EBITDA margin was off 60 basis points year-on-year at 42.9%.

Operating profit fell 4.4% to £284m.

AA swung to a profit after tax, however, at £74m compared to a loss after tax of £1m as reported a year ago, with basic earnings per share improving to 12.2p from a 0.2p loss per share.

Adjusted basic earnings per share were down 0.5p, however, at 21.3p.

Cash conversion was off at 92% compared to 101%, while dividends per share improved 3.3% to 9.3p.

The company said its net cash flow after dividends turned positive for the year at £42m, compared to net outflows of £136m in the prior year.

On the operational front, AA said its roadside revenue grew 2.5% to £742m, with paid personal members improving in numbers to 3.34m from 3.33m, reversing a long-standing decline.

Its retention rate rose to 82% despite an increase in insurance premium tax, and new business volumes grew 14%.

The average income per member grew 1.3%, which the board said was a result of improved ancillary sales as price increases were deliberately contained while its members were affected by the increase in insurance premium tax.

Ladbrokes Coral

In its first full-year results as a merged company Ladbrokes Coral reported profits near the top end of forecasts and increased synergy targets, although the government's triennial review due in late spring remains a major cloud on the horizon.

The government has indicated that they will be pursuing a mandatory horse racing levy payment of 10% on all channels from April 2017. Another looming threat is an industrywide investigation by the Competition & Markets Authority into customer terms and conditions applied in the betting and gaming sector.

Trading since the year end has seen mixed sports results, with a run of "exceptionally customer friendly" Italian football results hitting European revenues and margins, but the company said total group net revenue was still 2% ahead of last year and so it remained on target for the full year.

The integration of the two businesses is now expected to produce cost synergies of nearer £100m by 2019, upgraded from the initial guidance of £65m.

For the 2016 calendar year, the company, which was finally formed when the merger was completed in early November, generated pro forma combined revenue of £2.35bn, which was an 11% increase on the previous year.

Earnings before interest, tax, depreciation and amortisation grew 14% to £380m and operating profits surged 22% to £264.3m.

In a January trading statement the company said it expected these profits to be in the range of £275-285m, but after disposing of 360 shops and adjusting for amortisation the range moved down to £256-266m.

Underlying earnings per share were reported at 6.6p, reflecting a 10% increase on 2015 after adjusting for a prior year one-off tax credit.

A proposed final dividend of 2p means the full year dividend was flat at 3p.

Net debt finished the year at £1.1bn, just over 2.8 times proforma EBITDA

Card Factory

Card Factory’s full year revenue increased as new store openings matured and it hiked its dividend, although it was affected by the overall slump in the retail sector.

For the year ended 31 January, revenue rose 4.3% to £398.2m compared to the previous year.

However, like-for-like revenue growth fell to 0.6% from 3% in 2016, while store LFL growth fell to 0.4% from 2.8%, due to lower levels of footfall in the retail market.

The FTSE 250 company benefitted from a good Christmas period which cumulative LFL sales growth for the fourth quarter returning to the expected historic range of 1% to 3%.

Underlying Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 3.8% to £98.5m and underlying operating profit rose 3% to £87.8m.

Underlying pre-tax profit was up 3.8% to £85.1m.

But basic earnings per share fell 1.1% to 19.3p, but the company did declare a final dividend of 6.3p, up 5% , the total dividend per share was 9.1p, a 7.1% increase, and a special dividend of 15p was paid last November.