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Wolseley profits drop by more than 75 pc

Building supplies giant Wolseley today announced a sharp fall in profits but said it remained confident it will meet its banking covenants this year.

Faced with a significant deterioration in trading conditions, the Build Center and Plumb Center owner reported bottom-line pre-tax profits of £145 million for the year to 31 July, compared with £634 million a year earlier.

The period included £76 million of restructuring charges, including from 270 branch closures and a 7,100 reduction in headcount, mainly in north America.

Another 600 roles have been removed since the start of the new financial year, while property and business disposals of £46 million have been realised.

Chief executive Chip Hornsby said the actions taken so far left the group well placed to meet its banking covenants over the year.

A group statement said: "Accordingly, the board has no plans to raise equity or renegotiate banking covenants, although these remain options should market conditions deteriorate very dramatically."