Pre-tax profits at building supplies giant Wolseley dropped 60 per cent for the 11 months to the end of June 2009, the firm revealed today.
The firm announced the profit fall in a trading statement to the stock exchange today, and said it sees no sign of recovery for the rest of 2009.
Wolseley said that while there were signs the UK new homes market is picking up, the commercial and industrial sectors are getting worse.
Wolseley’s debt has reduced by £108 million to £1.4 billion at the end of June.
Bosses said they had decided to sell the Belgian, Slovakian and Czech businesses and that cost cutting would save just under £200 million this year.
The disposal of the Belgium, Slovakia and the Czech Republic has followed a strategic review of the Central Europe business.
Over the past two years Wolseley has reduced its global workforce from 80,000 to 50,000.
Wolseley’s new chief executive Ian Meakins replaced Chip Hornsby earlier this month after a tumultuous year.
In a rights issue, the company raised over £1 billion from shareholders to shore up its balance sheet as it battles the downturn in the property and construction sectors.
The firm said: “Market conditions will continue to deteriorate with trading remaining challenging until at least the end of the calendar year.
“The new residential markets are showing signs of stabilisation but are unlikely to recover quickly.
“Cost reductions actions that have already been taken in fiscal year 2009 which will result in an incremental benefit in fiscal year 2010 of £192 million.
“Management will focus on achieving further cost reductions and strong cash flow generation and will position the business to drive competitive advantage through enhanced customer service.”