Plumbing and heating products distributor Wolseley has said that the difficult market conditions in Continental Europe in the third quarter have continued and it is now exploring strategic options for the future of its businesses in France.
"Wolseley's strategy is to focus on businesses where it can establish leading positions in attractive markets and consistently generate good returns for shareholders. In this context, we have decided to explore strategic options for the future of our businesses in France," the firm said on Tuesday morning.
The French division generated £1.3bn of revenue in the year to July 31st 2011, with employed net assets of £500m including £136m of goodwill.
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"In light of this review the appropriate carrying value of these assets will be assessed at year-end and this is likely to give rise to a non-cash impairment charge. This announcement is being made in order to enable us to commence consultation with our employees in France."
Wolseley said that it is continuing to take actions to reduce its cost base and has incurred one-off restructuring £20m of costs since August 1st 2011, in line with previous guidance.
"In Denmark, where we have strong market positions, trading conditions have remained challenging and we will review the carrying value of goodwill and intangible assets of £393 million associated with this business. This is also likely to give rise to a non-cash impairment charge."
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