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Wolseley hit by housing downturn | Wolseley hit by housing downturn |
(10 minutes later) | |
Building materials giant Wolseley has seen profits drop 77% after being hit by the US and UK housing slowdown. | Building materials giant Wolseley has seen profits drop 77% after being hit by the US and UK housing slowdown. |
Pre-tax profits for the year to 31 July fell to £145m ($266m) from £634m a year ago, and Wolseley said conditions in many of its markets may get worse. | Pre-tax profits for the year to 31 July fell to £145m ($266m) from £634m a year ago, and Wolseley said conditions in many of its markets may get worse. |
As well as a slowdown in the UK, the US housing slump, where it makes about half its sales, has also hit profits. | As well as a slowdown in the UK, the US housing slump, where it makes about half its sales, has also hit profits. |
The world's biggest distributor of plumbing materials said it had cut 7,700 jobs since since last August. | The world's biggest distributor of plumbing materials said it had cut 7,700 jobs since since last August. |
Profits before one-off costs, which included restructuring costs and branch closures, fell 30% to £527m. | Profits before one-off costs, which included restructuring costs and branch closures, fell 30% to £527m. |
The firm made 7,100 of the job cuts in the financial year, with a further 600 since then. | The firm made 7,100 of the job cuts in the financial year, with a further 600 since then. |
Investors cheered | |
Wolseley - which runs Plumb Center and Build Center in the UK - said it had no plans to raise extra funds or to renegotiate covenants held with banks. | Wolseley - which runs Plumb Center and Build Center in the UK - said it had no plans to raise extra funds or to renegotiate covenants held with banks. |
But it said these remained options should market conditions deteriorate dramatically. | But it said these remained options should market conditions deteriorate dramatically. |
Chief executive Chip Hornsby said that controlling costs and cash flow was the priority to ensure the firm was "well positioned for any market recovery". | Chief executive Chip Hornsby said that controlling costs and cash flow was the priority to ensure the firm was "well positioned for any market recovery". |
About £176m a year is expected to be saved through restructuring and other initiatives, the firm said. | |
Wolseley shares rose 7% in early trading - with investors cheered on guidance that it was likely to remain within its banking covenants. | |
The company employs 14,000 people in the UK and 1,300 staff in Ireland. |
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