Getting back on form.
Wolseley soars after upgrading profits
Published: 25 February, 2010
READING: Wolseley enjoyed a stellar day on the stock market yesterday after the plumbing and building materials supplier told investors that it was performing ahead of expectations.
The good news followed more than two years of turmoil. According to the Telegraph newspaper, Wolseley said it was achieving "better than expected cost efficiencies".
As a consequence, the company said trading profits before exceptional items for the year to July 31 would be ahead of the consensus forecast of £326m.
As well as cutting more costs than expected, Wolseley's pre-exceptional profits will be boosted because restructuring costs have grown to such an extent that they will be classified as an exceptional item.
Andy Brown, an analyst at Panmure Gordon, said: "With cost cutting very much a feature across the sector it is likely that others will have done well also. Trading remains challenging so we do not expect to be upgrading the rest of our forecasts."
Wolseley had been forced to cut more than 20 000 jobs in the past three years as its business slumped in the face of the financial crisis and a crisis in housing markets, especially in the US.
The company had to raise £1bn from shareholders to bolster its balance sheet and made a £766m pre-tax loss last year.
Chief executive Chip Hornsby left the business last June, and was replaced by Ian Meakins, former boss of foreign exchange group Travelex.