WOLSELEY chief financial officer John Martin is set to step into the top job at the heating and plumbing products supplier when current CEO Ian Meakins exits later this year.
Simon Nicholls is leaving aerospace and defence business Cobham to take up the same at role at Wolseley; news that sent shares in Cobham down 3% [CHECK] on the news.
Nicholls will stay at Cobham until a successor is found and is expected to join Martin at Switzerland-based Wolseley later this year, will be paid an annual salary of £530,000. Martin will receive £860,000.
A step up for Nicholls – Cobham boss Bob Murphy said the move places among the “top 40 FTSE plc financial leaders” – he joins a business delivering a double-digit increase in profits but one that is facing significant headwinds in its industrial business in the US and the Nordic regions.
Currently, the US contributes around 75% of Wolseley’s profits and some two thirds of revenue. Yet in its latest quarterly performance update, it confessed that its industrial unit, responsible for some 15% of its North American revenue, continues to be impacted by a weak oil and gas sector and the strength of the US dollar.
Nicholls, brings a strong pedigree. Before taking up his Cobham role, he was group finance director at engineering business Senior and spent nine years at building materials company Hanson in a series of finance roles before he became CFO for Hanson North America in 2003.
Cobham chairman Gareth Davis said he was pleased to have attracted someone of Nicholls’ “calibre and expertise”.
“I am confident Simon’s operational skills and experience will make a significant contribution to the future development of Wolseley,” Davis said.
At Cobham Nicholls helped drive a strategy aimed at taking FTSE 250 company away from its historical reliance on military markets. Cobham’s nascent plans to steer away from relying too heavily on government defence budgets is clearly a bold move given that about 60% of its current income stream is derived from defence – a third of which comes from the US military – and the remainder is commercial,
“The day after I joined in May 2013, the chief executive Bob Murphy brought in a new head of strategy and over the next few months we went through a redesign of the whole strategic planning process,” he told Financial Director in October last year.
“Rather than thinking about Cobham as an aerospace company and about what we can do with aerospace,” enthuses Nicholls, “we thought about it more as technology-based communications company.”
Nevertheless, there is unlikely to be a change of strategic direction at the business. In the Evening Standard chairman Gareth Davis has signalled that a move back to the UK was not one of the businesses “immediate priorities”, while Canaccord Genuity analyst Aynsley Lammin told Reuters he doesn’t expect any “significant change in the strategy”.
“Our focus on investing in our market leading businesses, commitment to developing our people and dedication to customer service has underpinned our success and will remain hallmarks of our business,” said Martin.FACTS * FIGURES
Wolseley Revenue Q1
Wolseley Trading Profit Q1
Regional Analysis: Revenues Q1
Central Europe: £105m