Wolseley's trading profits decline 58% to £189m

BUILDING SUPPLIES company Wolseley, which operates the Brooks, Tubs and Tiles and Heat Merchants chains here, has said Ireland, Britain and the Nordic countries have shown sharper levels of decline than the rest of Europe.

In a trading statement for the nine-month period to the end of April, the company said revenues were flat at £12.1 billion, but down 15 per cent on a constant currency basis.

Its trading profits fell 58 per cent to £189 million, and pretax profit, before exceptionals, amortisation and impairments, was down 80 per cent at £80 million, or 88 per cent in constant currency.

The company said it saw no signs of recovery this year.

It described the Irish construction market as “severely depressed”, with activity levels over 70 per cent lower than at the same period a year ago.

It said revenues for the UK and Ireland decreased by 15 per cent during the nine months to April 30th, while trading profit was 75 per cent lower.

The company, which cut 180 jobs from its Irish operations earlier this year, said it expected overall market conditions to continue to deteriorate in the short term.

“We really don’t see anything positive at all in the balance of this calendar year,” chief executive Chip Hornsby said on a conference call.

Any signs of the slump bottoming out would not be seen until the second quarter of 2010, he added.

Analysts and investors expressed concern that Wolseley was losing market share and showing weakness in France and the Nordics, which until now have been overshadowed by its problems in the United States, where the company put its stock unit into a joint venture with private equity firm Gores Group while retaining a 49 per cent stake.

A recent call on shareholders for £1 billion has helped prop up its debt-laden balance sheet, and Wolseley said its net debt at April 30th stood at £1.53 billion, down from £2.88 billion at the same time last year.