RONA sees record second quarter
Canadian home improvement retailer RONA posted record second-quarter net earnings of C$86.2 million (US$82.1 million), up 7.7 percent from C$80 million (US$76.2 million) last year.
Sales rose 9.1 percent, to C$1.47 billion (US$1.4 billion) from C$1.35 billion (US$1.29 billion) last year. Same-store sales increased 0.2 percent at the retailer. The company also recorded a gain of C$2.4 million (US$2.29 million) related to the application of a new accounting standard for financial instruments.
In a sales environment that was “more difficult than anticipated,” RONA had attributed the sales and income increases to acquisitions it has made in the last year and “additional measures taken at the beginning of the quarter to stimulate sales and earnings growth.”
Those acquisitions included Noble Trade, Curtis Lumber and Mountain Building Centres. Additionally, the company said it has “15 acquisition opportunities under study and a very proactive recruiting approach.”
Among added initiatives in the second quarter, the retailer launched the “AirMiles” loyalty program in its network of Reno-Depot stores. The company also made “major efforts” in the area of promotional activities.
The company was optimistic about future financial conditions in Canada, noting that housings starts remain at “historically high levels” and home prices have “risen more than 10 percent since the beginning of the year.”
“A number of economists believe that the Canadian economy will grow faster than the American economy in 2007 and 2008, as long as economic activities related to natural resources remain strong and there is no major slowdown in housing construction and resales,” the company said.
RONA operates a network of 671 franchise, affiliate and corporate stores of various sizes and formats.
Toll Brothers’ revenues down in third quarter
Horsham, Pa.-based Toll Brothers, the largest U.S. builder of luxury homes, today reported a 21 percent decline in third-quarter revenue and said that mortgage market troubles may delay a recovery in the weak housing market.
Revenue came in at $1.21 billion for the quarter ended July 31, according to preliminary results, compared to $1.53 billion for the same period last year.
Backlog declined 34 percent to approximately $3.67 billion, while signed contracts dropped 31 percent to about $727.1 million. In addition, third-quarter cancellations increased 24 percent, from 19 percent the previous quarter.
“Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed,” CEO Robert Toll said in a statement. “The pace of home sales could slow further until the credit markets settle down.”
Wolseley makes two more acquisitions
Wolseley, the United Kingdom-based parent of Stock Building Supply and Ferguson, has announced two recent acquisitions in North America and Europe.
The company’s Ferguson division acquired Fire Fab, a distributor and fabricator of fire safety and suppression systems. Fire Fab, based in Minneapolis, had revenue of $12.4 million last year.
“This acquisition expands Ferguson’s presence in the growing fire protection market,” the company said in a statement.
Additionally, Wolseley’s Nordic region subsidiary, DT Group, acquired Sweden-based Save Tra Forsaljnings, a builders’ merchant with two branches in Sweden. The company had revenue of $16.5 million last year.
“This is the eighth bolt-on acquisition since DT Group joined Wolseley Group and is consistent with the plan to expand DT’s heavy side building materials footprint in the Nordic region,” the company noted.