Wolseley CEO: It’s going to get worse before it gets better
-- Industrial Distribution, 5/30/2008 6:23:00 AM
Wolseley plc CEO Chip Hornsby told analysts on a conference call discussing the British building materials distributor's first-half results that he expects the economy to worsen before it improves, according to a transcript of the call from Thompson Financial.“[T]he U.S. is, in my view, is going to get worse before it gets better, particularly for our industry. The enormous amount of inventory that we have today in housing, particularly in markets like Florida, or Arizona, or California and Nevada, are of a huge concern,” Hornsby said, according to the transcript. “[In] Canada, [there is] a more stable set of circumstances, but certainly a concern as to what's going to trip over from over the border from the U.S. and the impact that that will have. The energy sector up there is nowhere near as vibrant as people would envision it be out of the oil sands a year ago, even with higher oil prices.”
Hornsby said conditions in Europe vary, ranging from “challenging” in Ireland, where housing starts are off about 50 percent, to “great opportunities for growth” in Eastern Europe.
“The balance of Europe, though fragile, I think it's still much more stable than what you have in the U.S.,” he said. “[A]fter doing this for nearly 30 years, this is as complex as any time I can remember.”
Wolseley ranked first on INDUSTRIAL DISTRIBUTION's 2008 Big 50 list of distributors, with 2007 sales of $31.6 billion.
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