Cost cutting will continue at materials firm as housebuilding crisis knocks 77% off profit

Credit crunch-hit Wolseley has managed to improve its turnover by 2%, but pre-tax profit at the firm has plunged by 77%.

The materials group, which is heavily exposed to the US housebuilding market, has had to reduce its headcount by as much as 7,700 to stay in the black.

In its annual results, the group said that “aggressive cost cutting” had allowed its turnover to rise to £16.5bn in the 12 months to 31 July 2007, up from £16.2bn in 2007.

During that time, Wolseley restructured its business to achieve savings of £47m, but at the expense of 270 branches and 7,100 jobs. Since the year end, it has reduced its headcount by a further 600. The group's fortunes have been severely affected by the downturn in the market, with pre-tax profit falling 77% from £634m to £145m.

In its results, Wolseley said that “the group will continue to focus on the necessary cost reduction and cash maximisation actions appropriate in difficult markets, to achieve increased productivity and efficiency, with further restructuring being undertaken”.

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