Profit fall hits Wolseley shares

Plumb Centre, one of Wolseley's businesses

Wolseley's share price

Shares in building materials group Wolseley have fallen 30% after the firm reported a big fall in profits and a substantial increase in its debts.

In a trading update, the firm said its pre-tax profit for the five months to 31 December had fallen by two-thirds compared with a year earlier.

In addition, its debt had increased by 22% since last summer to �3bn, caused in part by currency fluctuations.

Wolseley said it had also suffered from the continuing housing market downturn.

The firm's main UK businesses include Plumb Center and Build Center.

'Continuing declines'

Wolseley's said the rise in its debt had been caused mainly by �557m of losses stemming from currency movements. Since last summer, the pound has fallen sharply against both the dollar and the euro.

The company also warned that its financial performance would continue to decline until consumer confidence returned, and banks were more willing to lend to households.

Wolseley has cut about 15,000 jobs since mid-2007.

"We must seek to ensure the business is well positioned to benefit when the markets in which we operate begin to recover," said chief executive Chip Hornsby.

In September last year, Wolseley announced a 77% fall in annual profits, saying it had been hit hard by the housing downturns in both the US and UK.