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UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of building materials, reported revenues from continuing operations were down 1.5% - down 16% on a constant currency basis - to £13.25 billion (US$21.86 billion). Trading profit from continuing operations was down 47%.
The company has completed its review of the Central and Eastern European markets, and has decided to focus on countries in that region where it has built sufficient scale, established leading market positions and can deliver an appropriate financial return. As a result, Wolseley decided to sell its Belgium, Slovakin and Czech Republic businesses. It will retain a presence in Switzerland, Austria, Luxembourg, Denmark, Holland and Italy.
Action also has been initiated to strengthen the leadership in Austria and Italy and these businesses will be further restructured.
North America Results
Ferguson local currency revenues declined 17%, as a result of the continued decline of the U.S. commercial and industrial market. Underlying trading profit, excluding property profits, was down by around 35%.
Wolseley Canada posted trading profit more than 20% lower as the residential markets continued to soften.
Revenue in the UK and Ireland deteriorated more than 15% with trading profit 75% lower than the prior year, principally as a result of the accelerating rate of decline of the commercial and industrial markets in the UK and continuing market challenges in Ireland. The Irish construction market remains severely depressed with new housing activity around 70% lower than the equivalent period in the prior year.In the eleven months to 30 June 2009, the Irish business made a trading loss of £20 million.
In France, the business saw decreased local currency revenue of around 10% in the eleven month period and trading profit approximately 70% lower.
The Nordic markets continued to deteriorate in May and June although the rate of deterioration is beginning to slow with volumes around 20% lower than the prior year. DT saw local currency revenue down around 20%.
In Central and Eastern Europe, local currency revenue was down around 10% and the business incurred a loss in the period. In June 2009, Wolseley disposed of Wasco-Anbuma, a carbon and stainless steel pipe business based in Belgium to local management.
Stock Building Supply
On July 1, Stock announced it had completed its financial restructuring and emerged from Chapter 11 bankruptcy protection. As per the terms of the original transaction, and following completion of the recapitalization, the $100 million DIP facility provided by Wolseley was cancelled. Wolseley has no remaining finance commitments in relation to the joint venture. The loss from associates before exceptional items but after tax for the period from 6 May to 30 June relating to Wolseley's 49% holding in Stock Building Supply was around £10 million.
Stock's construction loans business was excluded from the sale to The Gores Group. For the 11 months ended June 30, 2009, this activity incurred a trading loss of £23 million but earned £8 million in interest income.