Interim statement reveals slump in US housing market hits Wolseley's profits although trading in Europe remains strong

The Wolseley Group has seen pre-tax profits drop by almost 15% as it continues to see business hit by the housing slowdown in the US.

An interim management statement released by the company said revenue had risen by 5% against the three months to 31 October last year, but that pre-tax profits were down “almost 15%” owing to challenging conditions in the US.

Trading profits in the North American division of the company were almost a third (30%) lower than at the same time last year, while turnover is down by 10%.

Wolseley has made 1,700 redundancies in the US, and anticipates making a further 1,300 before the end of the year.

The collapse in the American market has been offset by strong trading conditions in Europe, where turnover has improved by 25% and trading profit by 15%.

The European performance has been bolstered by 10 ‘bolt-on’ acquisitions worth £170m made in the course of the year. The group expects the firms to add £219m to group turnover by the end of the full year.

Chip Hornsby, group chief executive, said: “We remain confident that with our size, scale and financial strength, we will emerge from this slowdown as a stronger competitor with an excellent platform for future growth.”