Wolseley continues to struggle as profits slump

| November 18, 2009 | 0 Comments

Wolseley, which is the world’s largest supplier of plumbing and heating equipment, today reported a 45% fall in underlying profits in the three months to the end of October.

The company has been badly hit by the housing market downturn and warned that its struggles continue after revenue slumped 13% to £3.4 billion in the three month period.

The plumbers’ merchant said it expects that debt will be down at the halfway point of its financial year (end of January) and will continue to decline into next year.

The group’s chief executive Ian Meakins said: “The overall trading environment continues to be extremely tough and we remain firmly focused on driving operational performance.”

Last year, the severe downturn forced the company to eliminate more than 10,000 jobs in a drastic cost-cutting exercise in order to prevent further losses.

In light of its problems, the company raised £1 billion from shareholders in April by issuing new shares in a rights issue.

In Europe, revenue for the three month period was down 10% compared with a year ago, while trading profit was down by 23%. In North America, revenue was down by 1%.

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