Wolseley warns of more cost cuts

Galiform cautious on expansion plan

Building supplies group Wolseley said it had cut 6,000 jobs in the space of a year as it battles deteriorating conditions in its key markets.

The group, which employs 75,000 people worldwide, warned cost reduction measures will continue in the UK, where it has seen a "rapid" downturn in conditions.

Trading profits in the UK and Ireland fell 17% in the 11 months to June 30, including restructuring costs in Ireland of £9 million after headcount was reduced by 150 people and 13 branches were closed.

The Reading-based company, which earns around half of its annual £16 billion sales across the Atlantic, is best known for its Build Center and Plumb Center trading names.

Wolseley said overall trading profits were 28% lower in the period, with group revenues up 1% after benefiting from acquisitions.

It said trading conditions in most of its markets had deteriorated since its last update in mid-May, when it said UK profits fell by 6% in the nine months to April 30.

The US housing and repairs, maintenance and improvement (RMI) markets softened further whilst US commercial and industrial markets remained stable.

Wolseley added: "In Europe, there has been a rapid deterioration in market conditions in the UK, particularly with new housing, and many other European markets continue to soften. The group continues to focus on cost reduction and cash flow enhancement."

Chief executive Chip Hornsby added: "The deterioration in some of our key markets continues and it is likely that conditions will get tougher still.

He said the company would not pay a dividend to shareholders for the financial year to July 31, saving the company £150 million.