Wolseley in fresh profit blow

Wolseley warned of challenging trading until the end of year 2009

Heating and plumbing giant Wolseley has warned of "challenging" trading until the end of 2009 as pre-tax profits tumbled in the first 11 months of its financial year.

The Reading-based firm saw profits slump 72% to £233 million on a constant currency basis and reported a 15% fall in UK and Irish revenues.

Wolseley said new housing markets showed signs of stabilisation, but were "unlikely to recover quickly".

The firm has cut almost 9,400 jobs in the current year - including more than 3,200 in the UK and Ireland - to cut £200 million in costs, but Wolseley said management would focus on further savings.

The Plumb Center and Build Center firm has been hit by housing slumps on both sides of the Atlantic.

It expects a slower rate of decline in repair and maintenance markets - but added that commercial and industrial business is deteriorating more quickly.

This contributed to a 17% fall in US revenues and a 16% slide across the group as a whole to £13.3 billion after allowing for currency impacts.

Trading profits in the UK and Ireland are down 75% on last year as the impact of recession follows hard on the sharp fall in house prices seen last year.

Ireland's construction market remains "severely depressed", the group added, with new housing activity around 70% below the previous year.

The Irish business made a trading loss of £20 million and Wolseley warned: "It is now widely expected that the market is unlikely to return to the levels of activity experienced in the past decade."