The group, which is the world’s largest specialist plumbing and heating distributor, has been hit by the downturn in the construction market both in the UK, the United States and other key markets.
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This will be phased in over the next few months and will result in a headcount reduction of around 2,000, subject to employee consultation, alongside more than 200 branch closures and consolidations. It will involve exceptional costs of £45mill.
In total the company will cut 2,300 jobs across its global operations on top of the 5,000 job losses announced earlier this year.
Chip Hornsby, chief executive, said the cuts had to be made to ensure the company survived financially and could meet its banking covenants.
He said: “In these unprecedented circumstances, the key priorities remain driving cost reduction and enhancing cash flow to ensure the Group remains compliant with its banking covenants.”
The company cannot rule out further cutbacks. The statement said: “Action will continue to be taken to appropriately size the Group’s cost base over the remainder of the financial year. In addition to the focus on continuing cost reduction, the Group will pursue selective actions to reduce debt to ensure it remains compliant with its banking covenants.”
The statement did note that some elements of the UK business were bucking the sharp downward trend seen with its heavyside building materials brands Bathstore, which is geared to consumer markets.
The company said: 'Plumb Center continues to show resilience, with more than two thirds of revenues relating to the residential RMI market and, in particular, the heating segment which remains relatively robust.
“The Commercial and Industrial businesses continue to hold up well. The gross margin is slightly up on the first quarter of the prior year, but there are increasing signs of pricing pressure.”
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