Recession is plumbing the depths at Wolseley.
No let up in market gloom for Wolseley
Published: 20 November, 2009
LEAMINGTON SPA: UK housebuilders posted encouraging trading updates, reporting a stabilisation of sales and house prices. National merchant Wolseley, however, warned that its market conditions remain taxing, as the company reported weaker first-quarter sales and profits.
Wolseley saw revenue fall 13% to £3.4bn across its European and American markets, with profit before exceptional items, tax and other charges, at £76m.
Steve Webster, the company's chief financial officer said: "We expect markets to remain challenging for the rest of the financial year.
"You can tell from what we're saying about the industrial and commercial market, we do expect that to get worse before it gets better."
Wolseley shares fell 50p to £13.23 on news that net debt for the last quarter was £1.22bn, up from £959m at the end of July. Wolseley was launched a £1bn rights issue earlier this year and made a £766m pre-tax loss for the 12 months to the end of July. The company has shed 30 000 out of 80 000 staff in the past two years in an effort to cut costs.
Chip Hornsby, chief executive, stepped down in July, replaced by Ian Meakins, the former chief executive of foreign exchange business Travelex and pharmaceutical company Alliance UniChem.
Mr Meakins said: "The overall trading environment continues to be extremely tough and we remain firmly focused on driving operational performance." Wolseley has seen improvement in the residential sector and is making cost savings. Mr Meakins launched an evaluation of its businesses to prioritise future investments, but has no plans for disposals.