Wolseley pre-tax profit plummets 80%

Published:  01 May, 2009

THEALE: Builders' and plumbers' merchant, Wolseley Plc, posted an 80% drop in its nine-month pre-tax profit to £72m. The national merchant stated that …

it saw no signs of recovery this year. The announcement sent its shares down by 16%.

According to chief executive Chip Hornsby there were also no signs on the horizon of the slump bottoming out until Q2 of 2010.

Wolseley's woes began in earnest in 2008, The merchant axed 3500 jobs in the third quarter, with one third of those at its US plumbing supplies business, Ferguson.

Three hundred and thirty jobs went in the UK. Out of its total 63 000 workforce, the company has so far cut 13 750 jobs. It did not rule out more to come.

Market analysts and investors were concerned that Wolseley is losing market share.

A recent call on shareholders for £1bn 1 billion helped the company's balance sheet. Wolseley said that its net debt on 30 April was £1.53. This was £2.88bn down from the same time last year.

"This is far and away the most challenging and largest drops we've ever experienced for this length of time," said Mr Hornsby.

The company's trading profit in the UK and Ireland was 75% lower than last year.

Statistics issued from Eurostat show construction output fell 10.5% in EU countries in March on the previous year.

Worst performers were Spain, falling by 20.3% year-on-year and the UK, which fell by 15.2%.

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