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Wolseley sees profits plunge by 34 per cent

HOUSEBUILDER supplier Wolseley yesterday warned that the economic environment remained volatile, as it posted a sharp drop in half-yearly trading profit.

The FTSE 100 group’s trading profit slipped 33.5 per cent to £167m in the six months ended 31 January 2010, compared with £251m in the same period of the previous year.

First-half revenue was also down by 15.1 per cent to £6.3bn from the previous year’s £7.4bn, with the group’s US Ferguson business posting a 21 per cent decline to $3.88bn.

Wolseley warned that the economic environment continued to provide “limited visibility”, and it remained cautious due to credit conditions, levels of foreclosures and the unemployment rate.

The sombre outlook came despite the group slashing its pre-tax losses by almost half thanks to an aggressive cost-reduction programme.

Wolseley, the world’s largest builders’ merchant distributor, reported pre-tax losses of £261m in the six months to 31 January 2010, compared with £464m the previous year and enjoyed improved trading in the UK, Nordic, Central and Eastern European markets.

However, weak conditions persisted across France, while commercial and industrial markets in the US continued to decline, the group added.

Cost reductions in the first half, including a headcount reduction of 746, saved a further £11m a year.

The group sold off its Irish interests earlier in January. Chief executive Ian Meakins said: “Market conditions remain challenging, though we are now seeing stabilisation in many of our markets.”

He added: “Against this backdrop, the group will continue to focus on an improved service to customers.”