Published: 16 June, 2009
NEW YORK: Stock, the second largest US builders' merchant formerly owned by Wolseley, is not expected to return a profit until 2013 despite plans to close almost half its outlets.
In May Wolseley sold the division to a private equity group but retains a 49% stake.
According to court documents relating to Stock's Chapter 11 bankruptcy hearing, Stock will be loss-making until 2013 even if it doubles its revenues during the period.
The forecast four-year return to profitability is a measure of the depth of problems within the US construction and house building sector.
Stock's core timber business collapsed because of the decline in US house building. Housing starts have dropped from an annualised figure of 1.5m at the beginning of 2007 to 458,000 in April, according to the US Census Bureau.
Under projected income statements filed to the court, Stock predicts cumulative net losses of £65m until 2013 when it expects to make a £21.4m profit.
US house builder confidence slipped this month. The National Association of Homebuilders' index of homebuilder sentiment fell back to from 16 to 15 despite predictions of an upturn.
US construction spending has improved slightly with the housing drop focused in the south, the biggest housing market in the US, which declined 3 points, while all other regions notched modest gains. David Crowe, NAHB's chief economist, said: "As expected, the housing market continues to bump along trying to find a bottom."