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US uncertainty bites into building group’s profits
There were contrasting fortunes this month for two of the support service sector’s sizeable plumbing related plays, with blue-chip group Wolseley having announced 3,000 job cuts in North America, after being hit by the slowing housing market.
Flagging consumer confidence, twinned with the effects of the deleterious US dollar, are making trading tough for the FTSE 100 building and plumbing giant, whose share price lingers in the doldrums. Its US business suffered a 30 per cent profits reversal for the three months to October. Led by chief executive Chip Hornsby, the Reading-based company says it will reduce its headcount by 1,700 and plans 1,300 further cuts later, a move that should yield combined annual savings of £60 million across the Pond.
Wolseley, known for its Plumb Center and Build Center brands, saw profits wane 15 per cent during the quarter, although in Europe profits increased more than 15 per cent, buoyed by good performances from the UK and the Nordic region.
Meanwhile, FTSE 250 peer BSS, a distributor of plumbing, heating and ventilation equipment, reported a near-24 per cent jump in first-half profits and looks on track to meet second-half projections. Pre-tax profits for the half to September increased from £21.3 million to £26.3 million at the Leicester-based concern, with chairman Peter Warry flagging up ‘an excellent first half with record sales, profit and cash flow’.
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