Plumbers and builders merchant chain Wolseley today announced that revenue and pre-tax profits have continued to fall, by 13% and 45% respectively.
The group’s interim management statement for the first quarter of their financial year showed group revenue at £3.39bn, down 13% compared to the corresponding period last year. Profit from continuing operations before tax, exceptional items and amortisation and impairment of acquired intangibles was down 45% to £76million.
In Europe, revenue for the quarter was down 10% compared to the previous year, while trading profit was down by 23%. In North America, revenue was down by 17%.
In this morning’s statement, Ian Meakins, group chief executive of Wolseley, said: “The overall trading environment continues to be extremely tough and we remain firmly focused on driving operational performance. We will continue to focus on delivering improved service to our customers, protecting share and gross margin, driving further cost reductions and delivering a good cash performance.
“At the same time, we are making good progress in evaluating our businesses to prioritise future investment.”
In Europe, trading profit was down by around 23%. Revenue for the UK and Ireland fell by about 13%, trading profit excluding £5 million of restructuring costs was up by around 17%,thanks to rigorous cost cutting, although intense competition on prices pushed the overall gross margin was around 2% lower than the same time a year ago.
The statement reports increasing signs of stabilisation in the residential and RMI markets in the UK alongside a slowing in the rate of decline in the Commercial and Industrial market.
“Trading profit in the Lightside division was marginally up in the first quarter despite a lower gross margin, and the Heavyside division is showing improving sales and profit trends. Trading profit in the Commercial and Industrial division continues to be affected by aggressive price competition and competitive tendering. The Irish market continues to be extremely challenging, although the rate of trading losses has stabilised and is broadly in line with the corresponding period in the prior year.”
The Group expects market conditions to remain challenging, particularly in the Industrial and Commercial segment, while the new build and RMI markets stabilise slowly.