Life has been good for Wolseley the worlds largest distributor of heating and plumbing products, and life has been good for their shareholders. Wolseley parent company to Plumb Center, Build Center and Parts Center are making it big in North America.
Three-quarters of the companies sales are in North America and it has benefited hugely from the boom in building new American homes. But the recent fall in the value of the US dollar and the prediction that the US housing boom has come to an end has sent the stock market pundits into a frenzy over their current share value.
However under the cautious leadership of chief executive Charlie Banks, Wolseley has provided a series of textbook examples of how to buy businesses that dovetail well with the group’s present operations and yeald excellent returns for shareholders.
This is likely to continue, fuelled by Wolseley’s cash flow. One estimate suggests the company could spend more than £4 billion over the coming four years and still cover its interest bill eight times over! Wolseley meanwhile is moving increasingly into the repair and maintenance work, which does depend on new houses being built.
The company has operations in 11 other countries. On top of its involvement in domestic appliance spares and plumbing and heating, it is also a major distributor of other building materials such as timber and paving. (Source – Mail on Sunday)