Monday March 17, 03:34 PM
Wolseley profits collapse due to US crisis
LONDON (AFP) - Wolseley (LSE: WOS.L - news) , the world's biggest distributor of plumbing and heating products, said Monday that first-half net profits collapsed by almost 70 percent due to its exposure to the US subprime housing sector.
Net profit slumped to 65 million pounds (82 million euros, 130 million dollars) in the six months to the end of January, which compared with 209 million pounds in the same period of the group's previous financial year.
Wolseley added in an interim results statement that pre-tax earnings tumbled by 72.5 percent to 79 million pounds, due to losses at its US building materials business Stock.
Revenue advanced by two percent to 8.029 billion pounds.
"These results reflect the deteriorating US housing market and reducing consumer confidence arising from global credit restrictions," the company said in the earnings release.
"Whilst the liquidity squeeze has particularly affected the US consumer, uncertainty is also having some impact on European markets."
Looking ahead, the company gave a gloomy forecast for the remainder of 2008.
"The board expects business conditions in a number of the group's markets to become more challenging over the next few months.
"In the USA, the housing market is likely to deteriorate further."
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