UK-based Wolseley plc has started a fundamental review” of Stock Building Supply’s impact on its overall results, which continued to suffer due to the struggling housing market in the U.S. The company may sell the unit.
In the year ended July 31, 2008, Wolseley, a global building materials and plumbing/HVAC distributor, closed 270 branches and reduced headcount by 7,100. Of those 270, 36 were at Stock and 123 were from Ferguson. Of the 7,100, 3,150 were from Stock, and 2,250 from Ferguson.
Since July 31, the company has reduced headcount by an additional 600.
“Financial discipline in terms of cost reduction and cash flow enhancement remains our primary focus to ensure the group remains compliant with our banking covenants and is well positioned for any market recovery,” said Chip Hornsby, chief executive of the group.
In the year, revenue globally was up 2% but profit fell 22%. Excluding Stock Building Supply results, profits fell 3.2%.
In North America, revenues fell 7.3% and profit was down 37.4%.
IN Europe, revenue grew 12.7% and profit was down 1.2%. The group saw tougher conditions in the UK and Ireland.
Wolseley expects U.S. commercial and industrial markets to remain stable in the next few months, although it expects “a number of markets in which the group operates to deteriorate in the short term.”
“We have continued to take action to reduce costs and drive working capital improvements in response to challenging market conditions,” Hornsby said. “While these conditions have impacted many of our businesses significantly during the year, our employees have done a good job at responding to the tough markets and we are seeing the benefits of our actions with market outperformance in many areas.”