Wolseley, the British parent of Stock Building Supply, saw its yearly pre-tax net income fall 17.6 percent, to 634 million pounds (US$1.3 billion) from 769 million pounds (US$1.55billion), primarily because of lower demand in its U.S. business, the company said.
Revenue rose 14.6 percent to 16.2 billion pounds (US$32.7) from 14.16 billion pounds (US$28.6) last year. Sales growth primarily was driven by bolt-on acquisitions and the company’s expansion in the Nordic region, an area that performed better than expected. Earlier this year, Wolseley expanded its Nordic region DT Group with the acquisition of Swedish building supply company Save Tra Forsaljnings.
“Recent events relating to the subprime market in the U.S. and the subsequent concerns over liquidity in global financial markets have created uncertainty,” the company said in a statement. “It is too early to assess whether these trends will continue.”
The company went on to say that while it believes “there are no signs yet of any upturn in the U.S. housing market,” commercial and industrial markets, as well as the European building supply market, are expected to remain strong.
In July, Wolsley announced it would close 24 Stock Building Supply locations, leading to the reduction of 370 employees. The company earlier closed 22 Stock branches and reduced its headcount at the division by 4,500.