Stock Building Supply posts further losses

Wolseley, the U.K.-based global building products supplier, reported its year-end results today, posting revenues of 16.5 billion pounds (US$30.5 billion) for the financial year ending July 31, 2008. Group operating profit was US$556.5 million.

Breaking out numbers for its North American division -- including Stock Building Supply and Ferguson – Wolseley reported revenues were down 7.3 percent and profits fell 37.4 percent.

Annual revenues for the company’s Building Supply were $3.47 billion, down 24.5 percent from $4.59 billion in 2007. This reflects a 21 percent decline in same-sales stores. Stock posted a loss of $246 million for fiscal 2008, compared with a profit of $86 million the previous year. The 2008 losses include $13 million in restructuring and severance costs related to the closure of 36 branches and a headcount reduction of 3,150.

Plumbing and HVAC distributor Ferguson was the better performer of Wolseley’s two U.S. businesses, posting sales of $11.2 billion, a 1.3 percent gain over revenues of $11.0 billion in 2007. Net income was $794 million, essentially flat from the year before.

In a prepared statement, Wolseley said it was operating within its banking covenants and did not foresee any need to renegotiate loans or raise equity.

However, the U.K.-based company made it clear that it was unwilling to endure continued losses across the pond. “Although headcount in Stock has already been reduced by more than 40 percent, further deterioration in the U.S. new housing market has necessitated a fundamental review of the business, in order to reduce its impact on Group results.”

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