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Wolseley seeks £1billion in rights issue

Wolseley said today it will raise £1 billion in a rights issue after the firm announced an £880 million operating loss for the six months to 31 January.

The building supplies firm said it will raise £270 million with the placement of 225 million new shares at 120 pence per share.

An additional £781 million will be raised by issuing 11 new shares for every five they already own at a price of just 40 pence each.

The firm’s half year results showed revenue up 3.2 per cent to £8.2 billion from £8 billion the previous year.

Wolseley’s reported a pre-tax profit of £97 million down 61.4 per cent on the previous year.

But after exceptional items of £262 million and impairments of £800 million the firm reached a loss of £880 million.

Wolseley had a net debt of £2.48 billion as at 31 January but total committed debt facilities of £4.3 billion give the firm a liquidity headroom of £1.6 billion.

Chief executive Chip Hornsby said: “Our markets have been hit hard in recent months and in response we have continued to take prompt and decisive action to reduce both costs and debt.

“Following the completion of the comprehensive financial restructuring announced today, the company’s balance sheet will be substantially strengthened.

“In addition, the clear focus on those core markets where Wolseley has built leading positions will enable the group to maintain investment in our key most profitable markets and remain strongly positioned to capitalise on future market recovery.”