Wolseley falls as it mulls sale of French unit

City A.M. Reporter
PLUMBING and building supplies group Wolseley said yesterday it may shut its French business because of the difficult market conditions hitting trade in continental Europe, sending its shares lower.

Wolseley said it would “explore strategic options” for its operations in France, where it intends to start a consultation process with its employees.

“It now looks as if Wolseley is about to grasp the nettle and exit its operations in France,” said Seymour Pierce analyst Kevin Lapwood.

“A sale is unlikely in our view as had it been possible, it would have happened already. We therefore believe the company will opt to close a significant part or all of the French business.”

Wolseley’s French business, which includes do-it-yourself chain Reseau Pro and kitchen retailer Solutions Cuisines, accounts for around 10 per cent of group revenues.

It holds assets worth some £500m and generated sales of £1.3bn in its last full year. In the three months to the end of April its revenues in France fell 6.1 per cent.

“In light of this review the appropriate carrying value of these [French] assets will be assessed at year-end and this is likely to give rise to a non-cash impairment charge,” Wolseley said.

Businesses around Europe have been hit by the Eurozone debt crisis, which has dented consumer confidence.

The company, which operates the Plumb Center and Ferguson chains in the UK and the US, said it had incurred one-off restructuring costs of around £20m since 1 August 2011.