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.
The company, which recently squeezed shareholders for £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 £72m.
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.
“We really don’t see anything positive at all in the balance of this calendar year,” chief executive Chip Hornsby said. He warned he did not expect the slump to bottom out until the second quarter of 2010.
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.
“They’ve solved one problem, but they’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,” said Sanjay Jha, equities analyst at brokerage Pali International.
Wolseley’s shares yesterday closed 18 per cent lower at £10.05.
FAST FACTS WOLSELEY
&9679; Wolseley said its net debt 30 April stood at £1.53bn, down from £2.88bn at the same time last year.
&9679; Its shares peaked at 6,180p in early 2006, but have since plunged in value.