Chip Hornsby stepped down yesterday as chief executive of Wolseley, the world’s biggest supplier of plumbing and heating equipment, after thousands of job losses, an 80 per cent fall in pre-tax profits and a £1 billion rights issue.

The departure of Mr Hornsby, who has been in the post since August 2006, follows almost two years of difficulties at the group. It has cut more than 20,000 jobs, including more than 3,000 in the UK since the autumn of 2007 and the abrupt downturn in the construction industry.

Ian Meakins, a former chief executive of Travelex, will take over from Mr Hornsby next month. Analysts said that the departure had been expected given management’s handling of the company’s £2.5 billion debt pile earlier in the year.

Some investors are understood to have been disgruntled that a cash call was not made earlier than April, when Wolseley asked the market for £1 billion. One analyst said: “Chip Hornsby has paid the price for the rights issue — you have to have a scapegoat. There was poor handling of the rights issue. There was pressure to do it. When they did do it, it was a strong move, but they did it too late.”

The rights issue preceded the sale of Wolseley’s majority stake in Stock, the loss-making American building materials company, to Gores, a private equity group, in May. Wolseley said that both measures had strengthened the group’s financial position significantly.

However, in an interim trading statement last month, Wolseley said that challenging trading conditions in the American residential, commercial and industrial sectors had contributed to an 80 per cent fall in annual pre-tax profits to £72 million. Activity in Europe had also declined, with business in Britain, the Republic of Ireland and Scandanavia hit hardest.

Mr Meakins, 52, a Cambridge educated father of three, will receive an annual salary of £775,000. He spent two years as chief executive of Travelex and was head of Alliance UniChem between 2004 and 2006. He started his career as a brand manager at Procter & Gamble, before joining Bain, the management consultantancy.

In 1988, he joined Kalchas Group, another consultancy, as founding partner, before spending 12 years at Diageo. Mr Meakins said: “I look forward to getting to know the business and working with employees to help manage through the current tough conditions.”

Mr Hornsby joined Wolseley Group in 1983, when it acquired Ferguson, and has spent more than 31 years in the construction materials distribution industry. Wolseley shares closed up 32p, or 2.8 per cent, at £11.58.

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