Wolseley to cut 800 jobs and shut 80 branches in the UK


The company plans to close 80 branches and one distribution centre, cutting 800 jobs, in an attempt to save up to £30m a year, The Telegraph reports.

The FTSE 100 firm reported pre-tax profits jumped 43 per cent from £508m to £727m for the year to July 31, following healthy growth in Ferguson, its US business. The American arm generates more than 80 per cent of the company’s trading profit, compared to 8 per cent in the UK.

Wolseley, which has been reviewing its business model, reported a UK trading profit of £74m, down £16m from last year, and attributed the loss to a decline in its core repair, maintenance and improvement markets.

Wolseley estimated that the restructuring will cost around £100m, of which £70m is cash funded by working capital efficiencies and proceeds from disposals.

Wolseley’s shares tumbled 3.49 per cent to £41.45 in morning trade.

A £40m incremental investment into refurbishment, technology and accelerating digital tools will be made in the overhaul, which will last around two to three years.

The firm said it would aim to minimise the effect of job losses.

Wolseley’s revenue rose by 8 per cent to £14.4bn while the company, which owns brands including the Plumb Center, increased its dividend by 10.2 per cent to 100p a share.

“Ferguson, our core US business… performed well and achieved good growth in residential and commercial markets, partly offset by weakness in industrial markets,” said chief executive John Martin. “Commodity deflation, principally in the US, reduced the group’s growth rate by 1.5 per cent. Ferguson continues to be the main priority for organic expansion and bolt-on acquisitions.

“Our review of UK operational strategy has identified opportunities to transform our customer propositions whilst simplifying our branch network and supporting logistics facilities to greatly improve service levels, drive availability and choice for customers and generate better returns for shareholders. Regrettably this will result in job losses which we will handle sensitively and minimise through redeployment and attrition as far as possible.

“We will remain vigilant in controlling our costs to protect profitability while investing in attractive opportunities for profitable growth. We are confident that Wolseley will make further progress in the year ahead.”