WOLSELEY saw its shares take a hit yesterday after the company reported a £245m write down and admitted it would see revenue growth slow in the coming year.
The plumbing supplies company said challenging market conditions in Scandinavia were behind a £245m impairment charge arising from the acquisition of DT Group in 2006.
The six-month results were a tale of two halves for the company, which saw ongoing growth in the US construction sector offset by a moribund performance in Europe.
Wolseley saw strong group revenue growth in the six month period ending 31 January, up 10 per cent on a constant currency basis. The main driver of growth was the US where the company derives over three quarters of its profits, which saw revenues increase by 13 per cent.
Growth elsewhere was lacklustre, with the UK recording just under two per cent revenue growth and central Europe contracting by 1.5 per cent, dragged down by market pressure and competition. France added to losses after discontinuing operations in the country led to an operating loss of £59m. The firm further warned group margins were likely to suffer in the coming six months, leading to a decrease in the rate of revenue growth to six per cent.
Overall pre-tax profits collapsed year- on-year from £312m to £103m. Despite announcing a 10 per cent increase in the dividend, shares closed down 2.66 per cent to 4,098p yesterday.