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Wolseley Sales Fall 15.1% in First Half 2010

Largest decline for Wolseley seen in Ferguson subsidiary.
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Wolseley reported sales for the six months ended Jan. 31, 2010, fell 15.1% to £6.33 billion (US$9.5 billion), with the largest decline for the first half-year at the distributor’s U.S. plumbing and heating subsidiary, Ferguson. The UK-based distributor saw weakness in U.S. commercial and industrial segments.
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Profit fell 33.5% in the period to £167 million (US$251 million), mainly due to lower profitability in Ferguson.
 
Ferguson sales (making up 37% of group revenue) were down by 21.4% in local currency to $3.8 billion. Organic sales were down by 18%. Ferguson reduced its headcount by 835 in the first half of this year, and closed its Alabama HVAC operation. Over 2.5 years, Ferguson has cut 6,946 employees through Jan. 31. Trading margin was lower for Ferguson at 4.1%, compared with 5.8% through 2009.
 
Wolseley Canada local currency revenue fell by 12% to C$614 million, with organic sales decline of 6% over the prior year.
 
The company owns a 44.5% interest in Stock Building Supply. For the six months to Jan. 31, 2010, Wolseley reported its "share of post-tax losses" was $21 million. (Wolseley: Joint-Venture Deal for Stock Building Supply)
 
North America Loan Services continued to reduce the size of its portfolio; Wolseley reported it would be disposing the business in two to three years.
 
In the UK, sales fell 12%; organic sales were down 4%. Profit increased by 67.9% to £33 million; and the UK trading margin increased from 1.4% to 2.7%.
France sales were down 16.6%, and organic sales were down 11.9%.
 
Nordic region sales were down by 14.6%; organic revenue decline was 12.7%.
 
Central and Eastern Europe sales were down 16%; profit improved. Revenue from continuing businesses in this region was down 6%; organic sales were down by 4%.
 

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