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Wolseley Lays Off More Employees

December 17, 2007
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READING, United Kingdom - Wolseley plc issued an interim management statement coinciding with its annual general meeting, delivering a three-month report for the period ended Oct. 31. As a group the company’s revenue increased 5 percent, but its trading profit was down 12 percent. Ten bolt-on acquisitions were completed between Aug. 1 and Nov. 28. In Europe, revenue was up 25 percent and trading profit increased 15 percent.

In North America, revenue was down 10 percent and trading profit dropped 30 percent. To help adjust cost base operations in the United States, the group laid off 1,700 people and the company is planning on another 1,300 reductions in its second quarter.

According to Modern Distribution Management, in total to date, the layoffs represent one-third of Stock Building Supply workforce and 10 percent of the Ferguson workforce. While the global liquidity squeeze has had some impact on European consumer confidence, the effect has been principally in the United States.

According to the company, sales trends over this period in both North America and Europe have been difficult to interpret and have not been consistent from month to month.

Action is also being taken to streamline central management resources to focus attention on specific opportunities within each continent and to accelerate decision-making in response to local market conditions. As a result, Adrian Barden’s, chief business development officer, and Larry Stoddard’s, CEO, positions have been eliminated. The initiatives in relation to private label, managing the group’s expense base, and developing the supply chain will now be the responsibilities of the North American and European continental structures.

The company’s overall results have been affected by the slowing U.S. housing market, low consumer confidence following uncertainty relating to liquidity in global financial markets, and the weakness of the dollar.

“The group continues to take swift and decisive action in the more challenging business conditions. Although sales trends and the outlook are uncertain, we remain committed to our strategy,” said Chip Hornsby, group CEO of Wolseley. “While keeping a tight control on costs, we will continue to invest to create competitive advantage. 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.”

For more information, visit www.wolseley.com.

Publication date: 12/17/2007

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