Wolseley (LSE: WOS.L) fell 92 pence, or 4%, to 2,236 pence this morning after warning that it may have to write down the carrying value of certain European operations.
The FTSE 100 company, which is the world's largest specialist trade distributor of plumbing and heating products, confirmed that it is to explore "strategic options" for its operations in France. At the 2011 year-end, the division employed net assets of 500 million pounds, of which 136 million pounds was goodwill.
Wolseley also admitted the "difficult market conditions" it had experienced throughout Europe had continued. In particular, trading conditions in Denmark were said to remain "challenging" and have prompted a review of a further 393 million pounds of goodwill.
As this morning's news and share-price reaction shows, Wolseley's exposure to cyclical markets can sometimes bring nasty surprises to unfortunate shareholders.
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