Wolseley pre-tax profit £480m lower at £150m

Wolseley has made a pre-tax profit of £150m despite “tough markets” around the globe. Turnover increased to £17bn.

Wolseley is the world’s largest specialist trade distributor of plumbing and heating products. It is also a builders’ merchant.

The group’s latest financial year covers the 12 months to 31 July 2008.

In the previous period, turnover of £16bn gave Wolseley a pre-tax profit of £630m.

The latest profit would have been higher but for exceptional costs running to £76m.

Divisional analysis shows that Wolseley’s UK and Ireland division recorded a turnover of £3.2bn, up 1%. Trading profit was 17% lower. The restructuring cost of £12m resulted in the closure of 13 branches and 150 redundancies in Ireland.

Chip Hornsby, chief executive, said: “The results for Wolseley UK reflect tougher trading conditions in Ireland throughout the period combined with an increasingly difficult UK housing market, as the year progressed.

“New housing starts in the UK slowed in the final quarter in response to the lower availability and increased cost of mortgage financing.

“Deteriorating consumer confidence also affected the RMI market.

“Government expenditure on social housing, health and education remained positive.”

Globally, Wolseley shed 7,100 jobs during the period and closed 270 branches. Since the financial year-end there have been a further 600 job losses.

The group’s net debt runs to £2.5bn. Gearing (i.e. the ratio of debt to assets) stands at 74% having been even higher, at 84% in January 2008.

Wolseley said that it has committed and un-drawn banking facilities available to the tune of £2.1bn and has no need for additional back-up until after August 2011.

The drop in the level of profit, from £630m to £150m, hasn’t worried Wolseley’s board when it comes to handing shareholders a dividend – the latest figure runs to £220m, up from the figure of £200m in the previous year.