Materials group Wolseley has suffered a drop in profit after being hit by the slowdown in the US housing market and a series of one-off costs.
In a trading statement issued before its interim results, Wolseley said its pre-tax profit for the five months ended 31 December 2006 was down 14% on the corresponding period in the previous year. The group’s trading margin was also lower, primarily owing to lower margins in the UK and North America.
In its statement, Wolseley said its fall in profit reflected one-off costs and higher interest charges relating to recent acquisitions and increased interest rates.
The group said it had also been affected by the continuing slowdown in the housing market and lower lumber prices in the US.
Group turnover increased 15% over the period. Wolseley UK had a turnover growth of 20%, but the firm said trading profit in the region was “only slightly up”.
Chip Hornsby, who succeeded Charlie Banks as group chief executive in August, said: “The group continues to outperform in most of its principal markets. The current actions being taken to adjust the operational cost base, while continuing to invest in the business, will position the group for sustained growth and margin improvement.”
Wolseley is due to publish interim results for the six months ending 31 January 2007 in March.
The firm’s share price was barely affected by the announcement, rising by less than 1% to 1351p.