Chip Hornsby today quit as chief executive of Wolseley, the struggling building materials group, with immediate effect in the wake of an 80 per cent fall in annual profits and a forced £1 billion rights issue.

Wolseley's shares rose over 5 per cent in early trading, up 58p at £11.84 following the announcement.

Mr Hornsby, a 31-year veteran of the construction materials business, has been with Wolseley since 1982 and had led the company since August 2006. He will be replaced by Ian Meakins, the former chief executive of Travelex Holdings, the foreign exchange business, who will become Wolseley's chief executive on July 13.

Mr Meakins also ran Alliance UniChem until the chemist chain merged with Boots in 2006.

Mr Hornsby's departure comes after Wolseley reported in May an 80 per cent fall in annual pre-tax profits to £72 million.

In March, it raised £1 billion from existing investors in order to avoiding breaching its banking covenants. The company's debt bill, then £2.5 billion, has been reduced to £1.5 billion.

Wolseley, which specialises in building and plumbing materials, has been very badly hit by the credit crunch, in large part because of its exposure to the North American housing market, where the sub-prime mortgage crisis originated.

Since 2007, under Mr Hornsby's tenure, Wolseley has axed almost 20,900 staff, including 3,269 UK jobs.

More than 1,000 jobs have gone at Ferguson, the American plumbing supplies operation where Mr Hornsby used to work. Almost 3,500 people lost their jobs across the Wolseley group in the three months from February to the end of April.

As part of efforts to reduce its exposure to the US, Wolseley earlier this year sold off its majority stake in Stock, which was loss-making, to Gores, the private equity company.

John Whybrow, Wolseley's chairman, said Mr Hornsby had made a "significant contribution" to the group, during "some extremely difficult market conditions".

He highlighted Mr Meakins track record in improving business performance at some of his previous companies.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive