Over 2,300 jobs are to go at builders merchant group Wolseley as pre-tax profits fall 45%. Around 2,000 of the job losses will be in the UK where 200 merchant branches are to close.
Sales in the UK and Ireland were 10% down for the period with trading profit falling a massive 65%.
The heavyside building materials brands, such as Build Center and Brooks (Ireland), suffered from the rapid deterioration in new housing, while in the lightside division Bathstore, the consumer bathroom brand, saw “a significant deterioration” in sales in the first quarter. Plumb Center, on the other hand, has so far managed to hold up well, as have the Commercial and Industrial business.
During the first quarter, the company reduced headcount by 170, at a cost of £6m with expected savings of £8m a year. Today’s programme of job cuts and closures is expected to save a further £80m a year and cost around £45m. The restructuring will be phased in over the next few months.
The group expects markets to continue to decline, “given the impact of the turmoil in financial markets on the broader world economy and the construction industry”.
In addition to the focus on continuing cost reduction, the Group will pursue selective actions to reduce debt to ensure it remains compliant with its banking covenants.