Wolseley Records £1.17B Loss for FY 2009

UK-based Wolseley plc reported sales for the fiscal year ended July 31, 2009, were £14.4 billion (US$22.9 billion), down 2.5% from fiscal year 2008. The group reported a loss of £1.17 billion (US$1.86 billion) for the period, as compared to profit of £74 million a year ago. Losses from discontinued operations – including contributions from Stock Building Supply prior to its disposal in June – were £441 million (US$700.1 million).

"Our final results reflect the harsh impact of the economic downturn on the construction industry and consequently Wolseley's business," CEO Ian Meakins said. "Overall, we remain cautious as to the outlook for our markets in FY2010, although profit trends in the second half are expected to improve."

North America Results
The results for Wolseley's North American division were significantly affected by continued weakness in the US housing market, a further slowdown in the Commercial and Industrial sector and falling consumer confidence affecting the RMI market.

Sales increased by 3.6%, reflecting a 25.3% positive impact of currency translation offsetting an organic revenue decline of 17.5%. Trading profit declined by 22.3%.

In response to the slowing market conditions, actions taken across the division have resulted in headcount reductions of 3,991 and exceptional restructuring costs of £86 million. During the year, a further 183 branches were closed across the North American network, giving a total of 1,453 locations.

Ferguson sales were down by 18.6%, with organic sales down 18.7%. Underlying trading profit, excluding property profits, was down by 40%. During the year, Ferguson reduced its headcount by 3,840, or around 18% of its total employees. Ferguson's overall branch numbers were reduced by 154 to 1,228 locations.

Wolseley Canada sales in local currency decreased by 6%, including a 6% organic revenue decline. Trading profit declined 25.6%. Wolseley Canada reduced its headcount by 387 during the year and closed 29 branches.

Europe
Reported revenue for Europe decreased by 7%, predominantly driven by an organic revenue decline of 15.4%. Trading profit decreased by 58%. Headcount reductions in Europe totaled 5,836, with 448 branches closed.

Wolseley UK and Ireland recorded a 15.8% decrease in revenue, driven by a 17.0% decline in organic sales. Trading profit declined by 68.6% compared to the prior year due to lower organic trading volumes and a loss of £30 million in Ireland. Headcount reductions totaled 3,083 and 284 branches were closed.

Across the Nordic region, revenue fell 20.6%, with organic revenue decline of 18.4%. Nordic reduced its headcount by 1,205 during 2009. During the year action was taken to exit the DT Group's DIY business in Sweden trading under the Silvan brand, resulting in the closure of 8 branches with the conversion of 3 branches to the Beijer Builders Merchant brand in Sweden. A total of 28 branches were closed in the Nordic region.

In France, sales were down 12.8% with organic revenue declining 12.9%. Trading profit was down 73%. During the year, restructuring actions gave rise to €28 million of exceptional costs to reduce headcount by 1,152 and close 56 branches.

The businesses in Central and Eastern Europe sales grew 6.3%, but were down 9.5% in constant currency due to an organic revenue decline of 8.9%. Trading profit was flat. Headcount across C&EE was reduced by 850. During the year, 37 branches were closed and 27 disposed of in C&EE.