Earnings fall at Stock, Ferguson
Wolseley, the parent company of Stock Building Supply and Ferguson Enterprises, reported an 8 percent drop in revenues for its North American division during the 11-month period ended June 30, 2008. Earnings for the division, which also includes Wolseley’s Canadian operations, fell 46 percent.
Stock’s loss for the 11-month period was $203.8 million, compared to a $104 million profit in the comparable period last year. Revenues were down by 25 percent, reflecting a 22 percent decline in same-store sales. Wolseley executives blamed the results on increased price competition and pressure on gross margin at Stock, combined with the continued slowdown in housing starts.
Ferguson has benefited from the continued strength of the commercial and industrial sectors but suffered some weakness from declines in the residential and remodeling markets, according to Wolseley. Revenues for the plumbing and HVAC distributor’s 11-month period were marginally up due to acquisitions, while organic revenue declined by 3 percent. Ferguson’s profits were 10 percent lower than in the previous year, primarily due to costs associated with the restructuring announced in May. Ferguson has closed 75 branches since that time.
In a statement about its European operations, Wolseley noted that “there has been a rapid deterioration in market conditions in the U.K, particularly with new housing, and many other European markets continue to soften. The Group continues to focus on cost reduction and cash flow enhancement.”
Headquartered in Reading, England, Wolseley is an international building materials distributor with nearly 5,000 branch operations in 28 countries. It is listed on the London Stock Exchange.