Wolseley plumbs new depths

SHARES in plumbers and builders merchant Wolseley plunged yesterday after the company revealed an 80 per cent slump in nine-month profits and warned it saw no improvement in demand this year.<br /><br />The company, which recently squeezed shareholders for &pound;1bn in a desperate attempt to prop up its debt-laden balance sheet, said pre-tax profits for the nine months to April dropped to &pound;72m.<br /><br />Wolseley, which owns Plumb Center and Build Center in the UK, said said it had cut 13,746 jobs worldwide over the period, including 2,819 in the UK and Irish Republic.<br /><br />&ldquo;We really don&rsquo;t see anything positive at all in the balance of this calendar year,&rdquo; chief executive Chip Hornsby said. He warned he did not expect the slump to bottom out until the second quarter of 2010.<br /><br />Analysts now see potential losses at its European units, which until now have been overshadowed by its problems in America which it recently offloaded in a joint venture with private equity firm Gores Group.<br /><br />&ldquo;They&rsquo;ve solved one problem, but they&rsquo;ve got another. My first impression is that, if you assume the US plumbing business made a profit, it seems to me that they probably made a loss in Europe,&rdquo; said Sanjay Jha, equities analyst at brokerage Pali International.<br /><br />Wolseley&rsquo;s shares yesterday closed 18 per cent lower at &pound;10.05.<br /><br /><strong>FAST FACTS </strong> WOLSELEY<br />&9679; Wolseley said its net debt 30 April stood at &pound;1.53bn, down from &pound;2.88bn at the same time last year.<br /><br />&9679; Its shares peaked at 6,180p in early 2006, but have since plunged in value.