Building supplies distributors Wolseley have announced the loss of 6,000 jobs worldwide since August last year following a 35% fall in global pre-tax profit.
The group are also not paying a final dividend to shareholders which will save them around £150m.
The announcement affected the already beleaguered share price which closed at 272.25p although at one point it was as low as 256.50p and by 3pm today had risen to 290p.
Trading profit in the UK and Ireland was 17% of the 11 months to June 30, according to the pre-close trading statement issued yesterday (Wednesday July 16). Profits in the United States fared even worse, however, falling 46%.
Chief executive Chip Hornsby said that it is unlikely the situation will change for the better. “The deterioration in some of our key markets continues and it is likely that conditions will get tougher still. In these unprecedented circumstances, driving cost reduction, enhancing cash flow and closely managing the balance sheet, remain key priorities.”
Sales in the UK and Ireland did increase slightly in the 11 month period and the trading profit fall of 17% was partly accounted for by one-off restructuring costs in Ireland in June of £9 million, where headcount is being reduced by 150 and 13 branches are being closed or consolidated.
Wolseley said they will continue to dispose of non-strategic businesses, having already sold three US businesses £18m in recent months.
Results for the full year ending July 31 2008 will be announced on 22 September 2008.
Editor’s blog on the subject, click here