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Wolseley reports on thousands of UK job cuts

In the nine months to April 30, 2009, restructuring in UK and Ireland included headcount reductions of 2,819 workers, according to the plumbing and heating firm's interim management statement, published today.
Wolseley's cost-cutting included the closure of four UK distribution centres and linked job losses to reduce 'overcapacity in the UK'.

As previously reported 269 staff are being made redundant - 133 job cuts at Chorley distribution centre, 76 at Didcot distribution centre and a further 60 jobs at transport outbases supporting the depots. Wolseley's distribution centre in Henfield will be shut and six people are affected by the closure of a small distribution centre in Ripon.

In the UK & Ireland, restructuring is expected to deliver cost savings of £71 million for the year ending July 31, 2009, bringing annualised benefits totaling £133 million

The group's interim statement said: 'Most of Wolseley's markets have continued to weaken in March and April against the background of deteriorating economic conditions. All of the group's European operations have witnessed declining economic activity in the period. Wolseley's markets in the Nordic region and the UK and Ireland have generally shown greater levels of decline than markets elsewhere in continental Europe.

'In Europe, revenue in the UK and Ireland continued to deteriorate principally as a result of further weakness in the RMI and a recent softening of the commercial and industrial markets. The Irish construction market, in particular, remained severely depressed with activity over 70% lower than the equivalent period in the prior year. Revenue for the UK and Ireland decreased by 15% in the nine months ended April 30, 2009 and trading profit was 75% lower than the equivalent period in the prior year'.

The group previously reported its aim to cut costs in Ireland by making 180 job losses.

For the nine months ended April 30, 2009, group revenue of £12,100 million was up 0.2% but down 15% on a constant currency basis. Trading profit of £189 million was 58% lower.

Recent capital restructuring raised approximately £1 billion net of expenses. The total group's headcount reductions is 13,746 - saving the group £316 million for the year ending July 31, 2009. (This brings total annualised benefits of £511 million).

Chip Hornsby, group chief executive of Wolseley, said: 'Recent trading has proved extremely challenging and we continue to anticipate this will be the case until at least early 2010. In the circumstances our drive for tighter cost control and strong cash generation remains a key area of focus for the group. These actions, coupled with the group's recently strengthened financial position through the capital raising and exit of stock, leaves Wolseley well placed both to meet the current challenges and to capitalise on a future market recovery.'
28 May 2009

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