Wolseley seeks to offload French business as trading proves tough

 
Joseph Millis
Plumbing supplies giant Wolseley said yesterday it was considering exiting its remaining building materials business in France, where trading has proved tough.

The British company, which runs the Plumb Center and Ferguson chains in the US and Britain, said the French business generated revenue and trading profit of £577m and £7m respectively in the year ended 31 July 2014.

It had net assets of approximately £130m.

Wolseley operates in France under Reseau Pro, Panofrance and Silverwood brands.

Shares in the UK plumbing and building materials supplier responded positively to the announcement that the group had started to explore “exit options” for the remainder of the French business, rising 2.6 per cent.

Wolseley has been facing an uphill struggle in France and central Europe for some time.

At its first quarter results in November, the company said like-for-like revenue in the region fell by 9.3 per cent in the face of weak economic conditions.

The company also said at the time that its French wood solutions business had been classified as “held for sale”.

The London-listed firm, which is the world’s biggest distributor of plumbing and heating products, added the announcement was part of its ongoing restructuring.

“The group… has decided to explore exit options for its remaining building materials business in France,” it said in a brief statement to the London Stock Exchange.

Westhouse Securities analyst Alastair Stewart commented: “We see the business as having been a thorn in its flesh for years – so this looks positive. But we think it will be a tough time to sell a French business given the construction outlook in the country.”