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Wolseley revenues for the six months ended Jan. 31, 2008, increased 2% to £8.02 billion (US$16 billion at current exchange rates) Profit fell 23.1% for the period primarily due to losses at Stock Building Supply in the U.S.
Where Stock is concerned, the market has deteriorated considerably. It's beyond anything that we've experienced, in my view, since World War II. If you look at housing starts, they've dropped from 2.2 million to under 1 million. We're in a situation where we've made significant headcount and cost reductions,"said Chip Hornsby, Wolseley CEO.
"Now we've got to be able to begin to anticipate what's going to happen next, particularly where that organization is concerned. So we've gone in and begun to look at it more from a strategic standpoint and surgically, region by region, to determine exactly, not only what our objectives are in the short term, but also longer term. There are markets that we really don't think will return to any level of normal housing starts even beyond this cycle.
"Where Ferguson is concerned, it's a matter of going in and trying to anticipate what's going to happen next, particularly with the markets outside of the residential sector that they've been involved with in the past."
In the first half, Wolseley cut 4,000 employees, excluding acquisitions. In the past 18 months, headcount has been reduced by 10% -- or around 10,000.
In the U.S., the group reduced headcount by 5,250, about one-third of the work force. At Ferguson, headcount was reduced by 2,700, or about 12%.
U.S. housing continued to negatively impact Wolseley's North American division.
Ferguson sales rose by 3.2% to $5.5 billion due to acquisitions. Organic revenue was down 2.7%. Profit was up by 4.9% to $350 million.
Ferguson's total branch numbers increased by 36 to 1,453 locations.
Stock Building Supply sales fell 25.7% to $1.8 billion, reflecting a 22.8% decline in sales volumes. Stock reported a loss of $89 million.
Stock's branch numbers reduced by 22 during the first half to 286 locations.
Wolseley Canada sales in local currency increased by 3.7% to C$684 million, including 2.3% organic growth. Branch numbers in Canada were reduced by 3 to 257.
Europe revenue in sterling increased by 15.8%, of which 0.5% was from organic growth. Recent acquisitions accounted for (12.3%) of revenue growth, including DT Group in the Nordic region which was acquired in September 2006. Profit increased 1.4%.
Hear what Chip Hornsby, CEO, had to say about the results on Wolseley's Web site by clicking here.