Wolseley UK’s trading profit has been hit as a result of the economic slowdown.
In its interim management statement for the nine months to April 30, 2008 Wolseley stated that the trading profit for its UK business declined by 6 per cent.
The statement also highlighted April as a challenging month and said the market had slowed significantly. Wolseley France was harder hit, with trading profit dropping 18 per cent in the same period. The financial results for the group as a whole were similar, with the US housing market continuing to decline. Group trading profit was 23 per cent lower over the period.
Wolseley has engaged in considerable cost-cutting measures, particularly in the USA. Group chief executive Chip Hornsby indicated this would continue.
“Given the continuing tough market conditions, our response has been to take further action to lower the cost base and improve cash flow, while continuing to pursue our longer term strategic aims,” he said.
“The cost reduction actions outlined today will enable us to restructure the business further, so that we are better positioned for the challenges ahead.”
These actions include the closure of 75 branches and redundancy for 200 staff at US plumbing supplies subsidiary Ferguson and the closure or consolidation of 15 locations in Canada, with about 50 people made redundant.
The heating and plumbing giant is expected to announce further cost reductions in North America and Europe before July 31, 2008 and said it would provide further details in upcoming announcements.