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Wolseley reveals sharp slowdown

Plumbing and heating supplies giant Wolseley today said its UK business endured a 'challenging' April after the market slowed significantly.

The group, which trades as Plumb Center and Build Center, said the downturn became more pronounced in recent weeks, contributing to a 6 per cent fall in UK trading profits during the nine months to April 30.

Across the group, which has operations worldwide, pre-tax profits fell 30 per cent for the nine months.
Wolseley - the world's largest specialist trade distributor - also said it would continue to cut costs, with plans for the closure of 75 branches and 200 job cuts at its American plumbing supplies firm Ferguson.
Ferguson, which was acquired by Wolseley in 1982, has around 1,500 service centres. The initiatives will save £70 million a year and also include the closure or consolidation of 15 locations in Canada.

Wolseley warned further cost reduction measures will be taken in North American and Europe before the end of July.

The group has axed around 10,000 jobs in the past 18 months - equivalent to one tenth of its workforce. Around 80 per cent of the cuts have come in the US, with more "modest" reductions in Europe, the group said recently.

Wolseley's UK and Ireland business, which trades from around 1,900 sites, has in the past been protected from the economic downturn by government spending on schools, hospitals and social housing repairs and maintenance work.

But it said today that trading had become much more difficult.

Wolseley told shareholders: "In Europe, there has been a more pronounced slowdown in the UK over recent weeks and many other European markets continue to soften."

It added that the US housing and repairs, maintenance and improvement market continued to soften, but that US commercial and industrial markets had held up well.

Chief executive Chip Hornsby said he expected the challenging conditions to continue.

He added: "The cost reduction actions outlined today will enable us to restructure the business further, so that we are better positioned for the challenges ahead."