Building materials company blames "weakness" in market for drop to £72m and predicts trading conditions will remain tough into next year.
Pre-tax profit at Wolseley plc, which owns the Plumb Center and Build Center chains, was down 80% to £72m for the nine months ended April 30.

The company blamed the drop, which was revealed in its interim management statement, on "further weakness in the RMI and a recent softening of the commercial and industrial markets".

The group, which recently tapped shareholders for an extra £1bn in a rights issue, has made a number of job cuts across the UK and Ireland in a cost reduction exercise. Wolseley rationalised its UK supply chain to "reduce overcapacity", closing distribution centres in Didcot, Chorley, Henfield and Ripon, which resulted in 270 redundancies.

In the 9-month period, Wolseley has cut 2,819 jobs in the UK and Ireland and almost 10,930 from its operations worldwide. These "restructuring actions", it claims, will deliver cost savings of £316m for the year ending July 31, 2009 - £511m on an annual basis.

The group sees no signs of recovery in the short-term and anticipates that "trading conditions will remain challenging until at least early 2010. Further job cuts are also to be expected at Wolseley, with the company stating that it will "continue to drive further cost reductions and take measures to maximise cash flow, where appropriate".

Wolseley group chief executive Chip Hornsby said: "In the circumstances our drive for tighter cost control and strong cash generation remains a key area of focus for the group. "

He added: "These actions, coupled with the group's recently strengthened financial position through the capital raising and exit of stock, leaves Wolseley well placed both to meet the current challenges and to capitalise on a future market recovery."