Wolseley, the parent company of U.S. plumbing distributor Ferguson, has announced plans to move its official headquarters to Switzerland in order to reduce its tax burden in England. If approved by shareholders, the London-based firm would create a holding company called “New Wolseley” but continue to employ nearly 10,000 people in the U.K.
New Wolseley would still be listed and traded on the London Stock Exchange, according to the proposal.
Based on earnings in the last financial year, the move would save the company about 23 million pounds (US$36 million), company executives said in a conference call.
In tandem with the Sept. 27 announcement, Wolseley released its financial earnings for fiscal 2010. The global supplier of building materials narrowed its losses to 340 million pounds (US $538 million), compared with 1.17 billion pounds (US $1.85 billion) for fiscal 2009. Revenues were reported at 13.2 billion pounds (US$20.8 billion) for fiscal 2010, which ended July 31, 2010, a 9% drop from revenues of 14.4 billion pounds (US$22.7 billion) a year ago.
According to Wolseley’s financial statement, it retains a 44% interest in Stock Building Supply, which it sold to the Gores Group in 2009. “The [company’s] share of the after-tax losses of the business in [fiscal 2010] amounted to 13 million pounds (US$20.5 million),” Wolseley said. “In light of the level of ongoing losses generated by the business, the group has concluded that its investment is impaired and has written off the carrying value of 41 million pounds. The group has no requirement to fund any investment in the future.”
As for Ferguson, one of the largest distributors of plumbing and HVAC equipment in the United States, revenue was down by 11%, the company said. Reported earning were 239 million pounds (US$377 million), down 70 million pounds (US$110.6 million).