Wolseley’s pain worsens in a tough building market

If the US and Britain are coming out of recession, someone has forgotten to tell Wolseley.

The stricken taps and radiators group, the world's largest plumbing supplies company, said today revenues have slumped 20% to £3.4 billion in the three months to the end of October and trading profit has collapsed 46% to £104 million.

That isn't much improvement on its full-year results when Wolseley admitted sales had dived 16% and trading profits had crashed 52%.

"The overall trading environment continues to be extremely tough," said Ian Meakins, the new chief executive, a Brit brought in from the bureau de change group Travelex after shareholders had decided they had had enough of American Chip Hornsby's attempts to turn Wolseley round.

Meakins said its industrial and commercial businesses are still deteriorating while its operations supplying the new-build and home improvement markets are only moving towards what he called stabilisation.

The picture is poor in the US, Wolseley's largest market, which is supposed to be coming out of recession faster.

In the UK, where Wolseley trades as Plumb Center to the trade and as Bathstore on the High Street, revenues are down 13% though trading profits are up, reflecting the hundreds of jobs culled this year and last.

There was better news on the housebuilding front, however, as Bovis Homes indicated it is coming out of the slump. Bovis said in the 12 months up to last weekend reservations have shot up 83% .

It said that over the year it has sold 2178 homes compared with 2023 in the previous 12 months, though it admitted legal completions are down marginally at 1800.

It also said it is seeing incremental rises in prices for new homes, indicating confidence is returning.