Wolseley profits fall due to housing slowdown

Building materials supplier, Wolseley, has experienced a sharp fall in profits of 77% as it continues to suffer due to the housing slowdown in the US and the UK.

The company, which is one of the largest distributors of building equipment in the world, said profits for the year to the end of July fell from £634 million last year to £145 million.

In a bid to cushion itself against stagnation in the US and UK housing markets, it has written down assets and closed 270 branches since the start of 2008.

Furthermore, the group, which operates Plumb Center and Build Center in the UK, has revealed it has cancelled its final dividend to save £150 million.

A total of 7,000 jobs have already been slashed since last August.

The group’s chief executive, Chip Hornsby, said if the current economic conditions remain, a rights issue cannot be ruled out. However, the group is expected to benefit should the proposed $700 billion (£390 billion) rescue package from the American Government stabilise the housing market.

The group expects to save approximately £176 million a year through restructuring and other initiatives.

The company has a workforce of 14,000 in the UK while 1,300 staff are employed in Ireland.

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