Meyer to axe 500 jobs in cost-cutting drive

MEYER INTERNATIONAL, the builders' merchants, said yesterday that it would cut 500 staff - about 4 per cent of its workforce - in an attempt to drive down costs further.

News of the reductions came as the group, which mainly trades under the Jewson label, unveiled a 7 per cent gain in pre-tax, pre-exceptional profits to pounds 40m in the six months to September. Analysts said that the performance was at the lower end of expectations. Meyer shares dropped 18.5p to 384p.

Alan Peterson, the chief executive, said that 200 jobs would go from accounting and administrative centres, a further 200 from its Jewson branch network and the balance from its Graham chain.

Meyer bought 170-outlet Graham group, a smaller rival, in August for pounds 270m. About 50 of the stores will be rebranded under the Jewson banner, 110 will be retained where they are seen to have a strong brand following, and 10 will be closed.

"We are pleased to have been at the forefront of the consolidation process in the builders merchants' sector," Tony Palmer, chairman, said. "The benefits accrued from the Graham acquisition will be one of the key drivers ... in the next two years."

About pounds 17m in integration costs would be spread over this year and next, yielding savings of pounds 21m a year from 2002.

Meyer said it was its alliance with J Sainsbury - it has a presence in two of Sainsbury's Homebase stores - was progressing well.