Wolseley warns over US economic slowdown

Builders' and plumbers' merchant Wolseley has become the latest company to warn of the potential impact of challenging conditions in the US.

The group, based in Droitwich Spa, Worcestershire, runs the Plumb Center and Builder Center chains in the UK, and also has a sizeable heating, plumbing and building materials distribution network in the US.

Wolseley's executive chairman Richard Ireland said the company's US operations have suffered slightly from a slowdown in the latter part of last year.

He said its heating and plumbing business in north-western America has been hit by the slowdown in the technology sector and a weak residential market.

The company's US building materials division has seen timber prices slump to a seven-year low.

Ireland said a series of acquisitions helped to maintain sales and profits growth across Wolseley's US business, but admits that the short-term outlook is challenging.

"The industrial and commercial sectors have naturally softened in response to a slowdown in the economy since early January and, although lumber prices have increased recently, they remain at historically low levels."

Ireland adds that he is confident of further progress across the group in the remainder of the second half of its financial year.

Wolseley has reported a pre-tax profit of £167.2m before exceptionals for the six months to January 31, compared with £155.6m in the same period a year earlier. Sales rose by 14.1% to £3.5 bn.

The group's European division saw sales grow to £1.2bn from £1.1bn, with the company's UK business registering sales growth of 10% despite the effects of last year's bad weather. Trading profit rose by 12%.