Wolseley profit falls 20 percent on Europe weakness

LONDON Tue Mar 26, 2013 7:40am GMT

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LONDON (Reuters) - Plumbing supplies group Wolseley (WOS.L) posted a 20 percent fall in pre-tax profit on Tuesday, dragged down by weak housebuilding markets in Europe and pricing pressure in Britain which it said would continue.

The group reported a pre-tax profit of 199 million pounds in the six months to end-January 2013, down from 250 million pounds on the same period last year. Group revenue fell to 6.28 billion pounds from 6.84 billion pounds in 2012.

Wolseley said that the markets for new homes and for repairs and maintenance in France and the Nordics had deteriorated sharply.

"We continue to see strong growth in the USA, a broadly flat performance in Canada and the UK and very weak conditions in Europe," Meakins said.

The firm announced details of its plans to restructure its French building materials business Reseau Pro, including a proposed closure of 24 loss-making branches and a proposed disposal of 88 others.

It also said that it had cut 990 jobs in Europe since August last year, shrinking its headcount there by 7.2 percent.

Wolseley continued its strong run in its core U.S. market, where home resales hit a three-year high in February and house prices jumped, adding to signs of an acceleration in the housing market recovery there.

Trading profit in the U.S. division, which accounts for more than half of group revenue, was up 29 percent on last year to 223 million pounds, with its three major business units all winning market share.

The firm increased its interim dividend to 22 pence, up 10 percent from 20 pence last year.

Shares in Wolseley have risen 10.7 percent so far this year, against a broader FTSE 100 which is up 8.15 percent.

(Reporting By Christine Murray, Editing by Brenda Goh)

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