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paper
Topic Started: May 21 2008, 09:30 PM (289 Views)
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WF Advanced Members
in tonights paper it says ,plumbing and heating supplies firm wolseley today said its uk business endured a "challenging" april after the market slowed significantly and said the downturn became more pronounced in recent weeks,contributing to a 6 per cent fall in uk trading profits during the nine months to april 30 across the group which has operation world wide,pre-tax profits fell 30 per cent for that period which means that there is no money
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wolseleyobserver

WF Advanced Members
The following appeared on the Wolseley website yesterday, which confirms this and gfives more details. the sentence about further restructuring to be announced before july looks ominous.

REG-Wolseley PLC Interim Management Statement

Released: 21/05/2008

com:20080521:RnsU9146U
.
RNS Number : 9146U

Wolseley PLC

21 May 2008

NEWS RELEASE

21 May 2008

Wolseley plc

Interim Management Statement for nine months ended 30 April 2008

Wolseley plc, the world's largest specialist trade distributor of plumbing and
heating products to professional contractors and a leading supplier of building
materials, is today issuing its Interim Management Statement for the Group's
third quarter and for the nine months ended 30 April 2008. In accordance with
normal practice, a pre-close end of year trading update will be issued on 16
July 2008.

Overview

Overall, for the Group, trading for the three months ended 30 April 2008 has
been broadly in line with the expected market conditions that were reported in
the Interim Results announcement on 17 March 2008. The US housing and repairs,
maintenance and improvement ('RMI') markets have continued to soften but US
commercial and industrial markets have held up well. In Europe, there has been a
more pronounced slow-down in the UK over recent weeks and many other European
markets continue to soften. The Group continues to focus on cost reduction and
cash flow enhancement. Since 30 April 2008, restructuring decisions have been
taken which will result in one-off costs of around �50 million to be incurred in
the fourth quarter. These restructuring actions and other business improvement
initiatives should result in annualised savings of around �70 million.

Financial performance

The financial results for the nine months ended 30 April 2008 follow a similar
pattern to the six month figures reported in March. For the nine months ended 30
April 2008, Group revenue was up 2%, trading profit(1) was 23% lower, and profit
before tax and amortisation and impairment of acquired intangibles was down
30%.

In North America, Ferguson continued to gain market share and for the nine
months ended 30 April 2008 achieved local currency revenue growth of 1%, due to
acquisitions. Organic revenue declined 3% and trading profit was 1% lower than
the equivalent period in the prior year. Stock Building Supply continued to be
affected by the US housing slow-down and saw revenue fall 25% with additional
pressure on gross margins. The trading loss for the nine month period was
US$158 million. Wolseley Canada achieved 2% constant currency revenue growth,
although trading profit was 15% lower, due to the previously announced one-off
branch closure costs.

In Europe, revenue in Wolseley UK, which includes Ireland, increased 3% in the
nine months ended 30 April 2008 and trading profit was 6% lower. The underlying
profit in the UK, excluding Ireland, was slightly higher. However, Wolseley UK
experienced a more challenging April as the market slowed significantly. In
France, the business environment has slowed further. Wolseley France increased
local currency revenue 3% in the nine month period and trading profit was 18%
lower. In the Nordic region, DT continues to see good organic growth, albeit at
a slowing rate, with revenue of �1,573 million and trading margin around 6%. In
Central and Eastern Europe ('CEE'), the expected benefits from the new IT system
in Austria have begun to be realised and the performance of the new DC in Italy
has improved. Constant currency revenue for CEE during the period was up 3% and
trading profit was around 50% lower.

The Group continues to focus on cost reduction and cash flow enhancement. Since
30 April 2008, further cost reduction decisions have been taken which will
result in one-off costs of around �50 million to be incurred in the fourth
quarter. These cost reduction actions and other business improvement initiatives
are expected to result in annualised savings of around �70 million. These
actions include the closure of 75 branches and headcount reductions of 200 at
Ferguson and the closure or consolidation of 15 locations in Canada, with an
associated headcount reduction of around 50 people. Further cost reduction and
business improvement actions will be taken in North America and Europe before 31
July 2008 and further details will be provided in future announcements
.

The rigorous focus on cash flow continues with further improvements in working
capital ratios. Spot cash to cash days(2) improved by 5.2 days from 58.2 days as
at 30 April 2007 to 53.0 days at 30 April 2008 and cash conversion(3) was more
than 150%, for the nine months ended 30 April 2008, up from 122% at the half
year. The Group continues to adopt a cautious approach to acquisitions and no
further acquisitions have been completed since the Interim Results announcement.
Capital expenditure plans have been curtailed and total capital expenditure for
the year ended 31 July 2008 is now expected to be �320 million to �330 million.
As at 30 April 2008, net debt was approximately �2,875 million, �19 million
lower than 31 January 2008, after an adverse exchange impact of �83 million.
Gearing(4) reduced from 84% at 31 January 2008 to 81% at 30 April 2008.

Since 31 January 2008, the Group has repaid a E500 million facility that matured
in March 2008, put in place two new debt facilities for $200 million and E250
million and given notice to repay, prior to 31 July 2008, the two facilities
(totalling �270 million) which have covenants of net debt to EBITDA of not more
than 3 times. The repayment of these facilities is intended to provide
additional headroom for the one-off charges that will be incurred in order to
reduce the Group's cost base for the 2009 financial year. Once these two
facilities have been repaid the Group will have committed and undrawn banking
facilities of around �900 million. The majority of these have covenants that
net debt will not exceed 3.5 times EBITDA, while the remaining facilities are
subject to no financial covenants.

Outlook

Challenging conditions in many markets are expected to continue, although the US
commercial and industrial market, which accounts for the majority of Ferguson's
business, is likely to remain stable into the next financial year. The Group's
rigorous focus on cost reduction and cash maximisation will continue.

Chip Hornsby, Group Chief Executive of Wolseley, said:

"Given the continuing tough market conditions, our response has been to take
further action to lower the cost base and improve cash flow, while continuing to
pursue our longer term strategic aims. The cost reduction actions outlined today
will enable us to restructure the business further, so that we are better
positioned for the challenges ahead."

(1) Trading profit, a term used throughout this announcement, is defined as
operating profit before the amortisation and impairment of acquired intangibles.
Trading margin is the ratio of trading profit to revenue expressed as a
percentage.

(2) Spot cash to cash days is the net of spot inventory days plus spot
receivables days less spot payables days.

(3) Cash conversion is the ratio of operating cash flow to trading profit.

(4) Gearing ratio is the ratio of net debt, excluding construction loan
borrowings, to shareholders' funds.

There will be a conference call for analysts/investors at 0830 (UK time) today:


Participant dial in numbers:

0800 559 3282 UK Toll Free

1866 239 0750
US Toll Free

+44(0)20 7138 0810
International Toll

Password: 4145890

Slides relating to the call will be available on www.wolseley.com.

The call will be recorded and available on www.wolseley.com after the event. It
will also be available for playback until midnight on 28th May on the following
numbers:

Replay Passcode: 4145890#

Replay telephone numbers: 0800 559 3271 UK Toll Free

1866 883 4489 USA Toll Free

+44 (0)20 7806 1970 International Toll

+1 718 354 1112 USA Toll

Enquiries:

Analysts/Investors:

Guy Stainer +44 (0)118 929
8744

Group Investor Relations Director +44 (0)7739 778187

John English +1 513 771
9000

Vice President, Investor Relations, North America +1 513 328 4900

Media:

Mark Fearon +44 (0)118 929
8787

Director of Corporate Communications

Brunswick +44 (0)20 7404
5959

Andrew Fenwick

Notes to Editors


Wolseley plc is the world's largest specialist trade distributor of plumbing and
heating products to professional contractors and a leading supplier of building
materials in North America, the UK and Continental Europe. Group revenue for the
year ended 31 July 2007 was approximately �16.2 billion and operating profit,
before amortisation and impairment of acquired intangibles, was �877 million.
Wolseley has around 75,000 employees operating in 27 countries namely: UK, USA,
France, Canada, Ireland, Italy, The Netherlands, Switzerland, Austria, Czech
Republic, Hungary, Belgium, Luxembourg, Denmark, Sweden, Finland, Norway, Slovak
Republic, Poland, Romania, San Marino, Panama, Puerto Rico, Trinidad & Tobago,
Mexico, Barbados and Greenland. Wolseley is listed on the London Stock Exchange
(LSE: WOS) and is in the FTSE 100 index of listed companies.

Certain information included in this release is forward-looking and involves
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by forward-looking statements. Forward-looking
statements include, without limitation, projections relating to results of
operations and financial conditions and the Company's plans and objectives for
future operations, including, without limitation, discussions of expected future
revenues, financing plans and expected expenditures and divestments. All
forward-looking statements in this release are based upon information known to
the Company on the date of this report. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise.

It is not reasonably possible to itemise all of the many factors and specific
events that could cause the Company's forward-looking statements to be incorrect
or that could otherwise have a material adverse effect on the future operations
or results of an international Group such as Wolseley. Information on some
factors which could result in material difference to the results is available in
the Company's Annual Report to shareholders for the year ended 31 July 2007.




A copy of this release, together with all other recent
public announcements can be found on Wolseley's web site
at www.wolseley.com. Copies of the presentation given to
institutional investors and analysts are also available
on this site.



- ENDS -

This information is provided by RNS

The company news service from the London Stock Exchange

END

IMSAMMATMMATBPP


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