Wolseley chips away at £1.4bn debt
PLUMBING and heating specialist Wolsley reported today that profits are continuing to tumble as it struggles to cope with the global recession.
The firm, which has its UK headquarters in Ripon, said that profit before tax, amortisation and impairment of acquired intangibles from continuing operations was down 60% for the 11 months ended June 30. Revenue fell by 16%.
However, net debt has been reduced by £108m to £1.4bn following a raft of cost cutting measures including redundancies and store and depot closures.
In May, Wolseley confirmed it was to shut its Ripon distribution centre in an effort to save costs and that a further 270 staff would lose their jobs.
All of the group’s European operations have witnessed declining economic activity in the period but Wolseley’s markets in the Nordic region and the UK and Ireland have generally shown greater levels of decline than markets elsewhere in continental Europe.
A further raft of job losses have been announced in France, Ireland, Sweden and the US.
Wolseley, which is now headed by new chief executive Ian Meakins, said that restructuring actions would continue with the goal of saving £200m for the year ending July 31, 2009.
But it warned that it expects market conditions to continue to deteriorate with trading remaining challenging until at least the end of the year.
In Europe, revenue in the UK and Ireland deteriorated, principally as a result of the accelerating rate of decline of the commercial and industrial markets in the UK and continuing market challenges in Ireland.
The lightside business gained market share, with recent like for like sales trends in the heavyside business now being held in line with the market.
However, the UK new residential construction market is showing signs of stabilisation, although commercial and industrial markets continue to decline.
“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,” Wolseley said in a statement.
