Wolseley sees more tough times ahead for builders

The building trade is deep in the mire and likely to remain there for at least the rest of the year.

That is the grim assessment today from building supply group Wolseley, which has endured a torrid time since the start of the financial crisis.

It unveiled a loss for the year to the end of July of £766 million as it wrote down the value of businesses and paid for thousands of job cuts.

Wolseley made a loss of £441 million on its US arm Stock, which it sold earlier this year.

Ian Meakins, the chief executive who arrived in July to replace the ousted Chip Hornsby, reckons that in the long term Wolseley is a strong business. But the rest of 2009 and at least some of 2010 are going to be tough.

"Our final results reflect the harsh impact of the economic downturn on the construction industry," he said.

Wolseley isn't paying a final dividend, a move that won't come as a surprise to investors.
The company last updated the market in July with a gloomy trading statement.

Not much has improved since then, but Meakin is pleased that margins are holding up.

He is working out which bits of the business need cash.

"We are evaluating where to prioritise investment for the future to ensure profitable growth," Meakin said.

Debt has been paid down to £959 million from the previously reported £1.26 billion. Revenues slipped 2.5% to £14.4 billion.