BUILDING supplies firm Wolseley is poised to exit one of its biggest trading regions due to continued difficult trading conditions.
The Pipe Center and Plumb Center owner said it is exploring its "strategic options" in France, where it has more than 5,000 staff and generates revenues of £1.3 billion a year through brands including Reseau Pro.
In its most recent update, Wolseley said underlying revenues in France declined by 6.1% and quarterly profits fell £6 million as new construction markets weakened and government stimulus activity came to an end.
Seymour Pierce analyst Kevin Lapwood said: "A sale is unlikely in our view as had it been possible, it would have happened already.
"We therefore believe the company will opt to close a significant part or all of the French business."
He said this will incur significant costs but it will allow Wolseley to concentrate on its North American operations and revitalising the UK business.
Wolseley shares were 3% lower today as it admitted its end-of-year accounts will include a write-down on the French business.
It said: "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."
Wolseley generates £5.5 billion a year in revenues from Ferguson and Build.com in the United States and £2.4 billion from the UK.