Wolseley hit by housing slowdown

Wolseley has seen a rapid downturn in UK market conditions.

Building materials giant Wolseley has said its trading profit has fallen 28% in the past 11 months and warned market conditions in the UK may get worse.

As well as problems in the UK, the US housing slump has also hit profits as Wolseley makes half its sales there.

The world's biggest distributor of plumbing materials said it had cut 6,000 jobs since August last year.

The group, which operates Plumb Center and Build Center in Britain, has also axed its final dividend to cut costs.

The deterioration in some of our key markets continues and it is likely that conditions will get tougher still Chip Hornsby, Wolseley chief executive See Wolseley's share price

Wolseley said it was taking actions to ensure that it did not break its banking agreements.

Tough times

The company, which employs 75,000 people worldwide, has already cut about 10,000 jobs over the past 18 months, most of them in the US.

Wolseley's chief executive Chip Hornsby warned the company would continue its cost cutting plan in the UK, where the economic climate had worsened.

"The deterioration in some of our key markets continues and it is likely that conditions will get tougher still."

In its trading update, the Reading-based group said trading profits in the UK and Ireland fell 17%.

In Ireland, Wolseley has shed 150 jobs and closed 13 branches in the past few months.

"Slumping property markets are clearly taking their toll," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.

"The fallout from the housebuilders is rippling out to the secondary building and plumbing merchants such as Wolseley."