PROFITS AT the multinational owner of builders’ merchants and DIY chains, Brooks and Tubs And Tiles, were down 75 per cent in the five months ended December 31st, the company said yesterday.
British-based Wolseley said in a statement yesterday that trade continued to deteriorate in November and December, while weakening sterling has increased debt.
Wolseley added that revenues during the period increased 3 per cent, but they were down 10 per cent after factoring in the impact of exchange rates.
Profits before tax, once-off items and writedowns were down 66 per cent, and 75 per cent in constant currency terms.
The group said that net debt has risen to £3 billion (€3.17 billion) since the end of July, primarily because exchange rates have increased the burden by £557 million.
“However, net debt is expected to lower at January 31st 2009 due to an expected working capital inflow, but will be dependent on exchange rates at that date,” the statement noted.
Wolseley also pointed out that its projections show that the group will still have met all its repayment obligations on January 31st, the halfway point of its financial year.
The firm operates in 27 countries, including Ireland and employs 75,000.
Last year, Wolseley Ireland revealed that the construction slowdown had forced it to cut 150 jobs from its 1,200-strong workforce, and to close 13 branches.
Since July, it has cut 7,500 people from its payroll around the world, which it says will result in annual savings of £237 million.
There will be a once-off charge of £208 million to cover the cost of the lay-offs and restructuring.
The company said that it expects economic conditions to deteriorate in the short-term, and warned that it is unlikely to see improvement in its markets until those conditions stabilise.
“Until consumer confidence returns and availability of finance for customers projects improves, the group expects performance in North America to decline,” it said.
“The group also expects conditions in the UK to continue to deteriorate, with performance in continental Europe also likely to remain under pressure as consumer sentiment is . . . affected by macro-economic conditions.”
