Wolseley profits fall 25 per cent

21-01-2008

Wolseley profits fall 25 per cent
Plumbing and heating distributor Wolseley suffered profits "down almost a third" in the last five months of 2007, it has revealed.

The subprime mortgage collapse in the US and resulting 'credit crunch' have hit many businesses as consumers are able to spend less.

Wolseley is no exception. A trading statement released today said: "Results continued to be affected by the worsening US housing market, low consumer confidence arising from global credit restrictions and the weakness of the US dollar."

The fall in earnings marks the company's worst performance in more than five years. It has seen its share price lose nearly half of its value over the last 12 months.

The statement recognised that market conditions were likely to worsen and said Wolseley would continue action to cut costs.

The building material distributor has reduced its workforce by about one-fifth over the past 18 months.

"We have acted decisively and rapidly in response to the challenging market conditions to take cost out of the group and will continue to do so," said Chip Hornsby, chief executive at Wolseley.

"We remain committed to our strategy and are confident that with our size, scale, financial strength and operating efficiencies, we will emerge from this slowdown as a stronger group with an excellent platform for future growth.”

The Reading-based company's share price has slimmed down nearly 5.5 per cent from yesterday's close to 677p in early trading.

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