RNS Number:0435Q
Wolseley PLC
23 September 2003
23 September 2003
NEWS RELEASE
Preliminary Results for the Year Ended 31 July 2003
Wolseley plc announces record results for the seventh consecutive year
Summary of Results
Financial highlights
* In constant currency terms:-
- Group sales up 8.5%
- Group trading profit(1) up 6.9%
- Group pre-tax profit, before goodwill amortisation, up 9.4%
- Earnings per share, before goodwill amortisation, up 9.1%
* Currency translation has reduced group sales by #393.8 million (4.9%)
and group trading profit by #21.7 million (4.7%)
* As reported, in sterling (after currency translation effect):-
- Group sales up 3.2% to #8.2 billion (2002: #8.0 billion)
- Group trading profit up 1.9% to #472.9 million (2002: #463.9
million). Operating profit, after goodwill amortisation, up
1.3% to #443.0 million (2002: #437.2 million)
- Group pre-tax profit, before goodwill amortisation, up 4.2% to
#455.9 million (2002: #437.4 million). Profit before tax up 3.7%
to #426.0 million (2002: #410.7 million)
- Earnings per share, before goodwill amortisation, up 3.9%
to 56.69 pence (2002: 54.58 pence). Basic earnings per share up 3.1%
to 51.53 pence (2002: 49.96 pence)
- Continued strong free cash flow(2) up from #248.0 million to #268.7
million
- Total dividend for the year increased by 12.2% to 21.2 pence per
share (2002: 18.9 pence)
- Strong financial position with gearing(3) of 46.6% and interest cover
of over 26 times
- Working capital to sales ratio of 15.4% (2002: 16.0%), achieving the
group's target of 15.5% a year ahead of plan
(1) Trading profit, a term used throughout this announcement, is defined as
operating profit before goodwill amortisation. Trading margin is the ratio
of trading profit to sales expressed as a percentage.
(2) Free cash flow is cash flow from operating activities less depreciation,
tax, dividends and interest.
(3) Gearing ratio is the ratio of net borrowings, excluding construction loan
borrowings, to shareholders' funds
Operating highlights
* Strong organic performance, relative to the market, in European
distribution and North American Plumbing and Heating distribution divisions.
* Continued improvement in trading margin achieved in almost all of the
Continental European businesses and in the North American Plumbing and Heating
distribution division.
* Total acquisition spend incurred for 2003 of #513 million should
generate more than #1 billion per annum of incremental sales in a full year.
* Branch network expanded by 494 locations to 3,449 as at 31 July 2003
(2002: 2,955).
* US Building Materials' restructuring on track to generate cost savings
of $5 million in 2004 and at least $10 million per annum from 2005 onwards.
Outlook
* The underlying performance of the group remains strong against a
background of mixed and uncertain market conditions, which are unlikely to
change in the short-term.
* Outlook for the UK market remains favourable whilst Continental Europe is
expected to remain flat.
* US markets are likely to show a mixed pattern, both by sector and
geography. US residential housing and RMI (repairs, maintenance and
improvement) markets are expected to hold up well while industrial and
commercial is unlikely to show any improvement until at the earliest the
second half of 2004.
* There has been a slow start to the financial year in Canada, although it
is expected that the overall environment will remain positive.
* The group is well placed to deliver enhanced value from organic and
acquisitive growth opportunities.
* Additional investment in the group's infrastructure over the next
financial year will create opportunities for achieving synergies and
leveraging the group's international strengths while supporting the group's
objective of achieving double-digit sales and profit growth.
Charles Banks, Wolseley plc Group Chief Executive said:
"We are delighted to report our seventh consecutive year of record results
despite the mixed economic environment in the USA and Continental Europe. We
have made considerable progress across the group with the majority of our
operations performing well in their respective markets with a particularly
strong end to the financial year. We have spent a total of #513 million on
acquisitions, including Pinault Bois & Materiaux ("PBM"), all of which will
further strengthen our market positions, increase diversity and enable us to
move forward with confidence."
This news release contains numerous forward looking statements, concerning
future economic conditions and other factors which are beyond the control of
Wolseley. For more detail on the factors which could cause actual results to
differ materially from those discussed in this release, see our annual report on
file with the US Securities and Exchange Commission.
SUMMARY OF RESULTS
As at, and for the year
ended 31 July
2003 2002 Change
Sales #8,221.0m #7,967.6m 3.2%
Operating profit
- before goodwill amortisation #472.9m #463.9m 1.9%
- goodwill amortisation #(29.9)m #(26.7)m
Operating profit #443.0m #437.2m 1.3%
Interest #(17.0)m #(26.5)m
Profit before tax
- before goodwill amortisation #455.9m #437.4m 4.2%
- goodwill amortisation #(29.9)m #(26.7)m
Profit before tax #426.0m #410.7m 3.7%
Earnings per share
- before goodwill amortisation 56.69p 54.58p 3.9%
- goodwill amortisation (5.16)p (4.62)p
Basic earnings per share 51.53p 49.96p 3.1%
Dividends per share 21.2p 18.9p 12.2%
Net borrowings #826.7m #545.6m
Gearing 46.6% 34.1%
Interest cover (times) 26x 16x
ENQUIRIES:
Wolseley plc Brunswick Group Ltd
tel: 0118 929 8700 tel: 020 7404 5959
Charlie Banks - Group Chief Executive
Steve Webster - Group Finance Director Sophie Fitton
Guy Stainer - Head of Investor Relations Nina Richmond
An interview with Charles Banks, Group Chief Executive and Steve Webster, Group
Finance Director, in video/audio and text will be available from 0700 (GMT) on
www.cantos.com
There will be an analyst and investor meeting at 0930 (GMT) at UBS Presentation
Centre, 1 Finsbury Avenue, London EC2. A live audio cast and slide presentation
of this event will be available at 0930 (GMT) on www.wolseley.com
There will be a conference call at 1500 (GMT):
UK/European dial-in number: +44 (0) 20 7162 0186
North American dial-in number: +1 334 4204 950
Password: Wolseley Results
The call will be recorded and available for playback until 30 September 2003 on
the following numbers:
UK/European replay dial-in number: +44 (0) 20 8288 4459 Access code: 853762
North American replay dial-in number: +1 334 323 6222 Access code: 853762
23 September 2003
NEWS RELEASE
Preliminary Results for the Year Ended 31 July 2003
Wolseley plc announces record results for the seventh consecutive year
Announcement of Preliminary Results
Wolseley is pleased to announce another set of record results. These were
achieved despite challenging business conditions in a number of markets,
including the USA and Continental Europe, and the adverse impact of currency
translation. Organic growth within the European distribution and North American
Plumbing and Heating distribution divisions was particularly strong relative to
the market. A continued improvement in trading margin was achieved in almost all
of the group's Continental European businesses and in the North American
Plumbing and Heating distribution division.
On a constant currency basis, group sales increased by 8.5% and trading profit
by 6.9%. Currency translation has had a significant impact on the group's
reported sterling results for the year compared to the previous year, reducing
group sales by #393.8 million (4.9%) and group trading profit by #21.7 million
(4.7%). The effect of US dollar depreciation has been to reduce translated US
profits by #23.7 million (8.7%) compared to 2002. US dollar denominated profits
accounted for around 55% of the group's trading profit. The strengthening of the
Euro has partly mitigated the currency effect, with Euro denominated profits
accounting for around 12% of the group's trading profit.
After taking account of currency translation, group sales increased by 3.2% from
#7,967.6 million to #8,221.0 million. Trading profit rose by 1.9% from #463.9
million to #472.9 million. After deducting goodwill amortisation of #29.9
million (2002: #26.7 million), the reported sterling operating profit increased
by 1.3% from #437.2 million to #443.0 million.
Net interest payable was reduced to #17.0 million (2002: #26.5 million),
reflecting lower interest rates, a further reduction in the working capital to
sales ratio and the trading cash flow generated by the group during the year.
Interest cover is over 26 times (2002: 16 times).
Profit before tax and goodwill amortisation increased by 4.2% from #437.4
million to #455.9 million. The increase in earnings per share before goodwill
amortisation was 3.9%.
European Distribution
Of the European markets in which the group operates the UK remained the most
positive whilst markets in Continental Europe were broadly flat.
Sales for the division increased by 17.4% from #2,517.5 million to #2,956.7
million, including #258.1 million (10.3%) which relates to acquisitions. The
organic increase in sales was 4.6%. Trading profit rose by 12.7% from #171.4
million to #193.2 million.
The divisional trading margin reduced from 6.8% to 6.5% of sales, due to a
reduction in the UK and French trading margins. The UK trading margin reduction
was, as previously reported, due to the move to two new distribution centres.
UK
Wolseley Centers took advantage of a strong UK market where the principal driver
was the RMI (repairs, maintenance and improvement) market which was buoyed by
strong consumer demand against the backdrop of lower interest rates, low
unemployment and house price inflation. Despite the weakness in the industrial
and commercial markets and the lack of any real evidence of the promised
increase in government spending, UK sales increased by 12.6% to #1,888.8
million, including organic growth of 6.9%. Each of the four divisions improved
their gross margins compared to last year, Lightside being the strongest
business performer.
The move to two new distribution centres during the course of last year and the
first half of this year had the expected adverse impact on costs (including
one-off costs of #1.6 million in 2003). In addition, 153 new locations were
added during the year taking the total for Wolseley Centers to 1,372. The
significance of these investments will be reflected in future trading, both in
terms of supporting continued growth and in the generation of further
operational efficiencies. These efficiencies were reflected in an improved
margin in the second half of the year, with the prospect of further margin
improvement in the future. The trading margin for the year as a whole was 7.6%
compared to 7.8% in 2002 and the working capital to sales ratio showed a
significant improvement due to a focus on inventory management.
France
The French construction market was flat during the year with high levels of
unemployment continuing to have a negative impact on consumer confidence.
Local currency sales in Brossette were slightly up on last year due mainly to
acquisitions and four new branch openings. Confronted with poor market
conditions, Brossette has undertaken an exercise to reorganise its branch and
management structure, which will be carried out in the financial year to July
2004.
Pinault Bois & Materiaux ("PBM") contributed Euro112.0 million (#74.4 million) of
sales relating to the period between the acquisition date of 7 July 2003 and the
year end. PBM will make a significant contribution to sales and profits in 2004,
offering new opportunities for growth and synergies within the group.
Integration benefits are expected to be generated by a diversification by
product, by customer and by geography and from the use in both PBM and Brossette
of the 'branch within a branch' concept which has been so successful in the UK.
Rest of Europe
The group's other Continental European operations made good progress and all
improved their trading margins, despite uninspiring markets. In Austria the new
housing market was flat and increased competition put pressure on prices
resulting in OAG's sales falling marginally. However, due to strong cost
control, trading profit was up 3.8%. Good progress is being achieved in Hungary
with sales up 13% in local currency, while sales were down slightly in the Czech
Republic. In Italy, last year's new branch openings helped performance in a flat
market in which Manzardo increased sales by 10.3% and trading profit by nearly
50%. CFM, in Luxembourg, increased sales by 1.7% in a construction market which
has fallen 5% in recent months. Trading profit increased by 8.0% and the trading
margin reached 6.0% for the first time. The deteriorating economy in The
Netherlands has affected the construction project and the new housing market
but, despite this, Wasco has made progress expanding its product range and
developing its offering to the more profitable RMI market. The spares business
performed particularly well with growth in sales of more than 35%.
The division has made progress in implementing its European strategy to manage
the businesses in a more cohesive way. Further investment is planned over the
next year to put in place the infrastructure necessary to obtain cross-BORDER=
"0" synergies, facilitate the sharing of best practice and accelerate the
benefits from the growth opportunities that exist. This year a further 467
branches were added to the European network, giving a total of 2,266 locations
at 31 July 2003 (2002: 1,799).
North American Plumbing and Heating Distribution
Business conditions for the group's North American Plumbing and Heating
Distribution operations continued to vary both geographically and by market
segment.
Due to the adverse impact of currency translation, sales of the division were
down by 1.1% from #3,592.4 million to #3,551.5 million. Trading profit increased
by 0.7% from #200.7 million to #202.2 million.
Currency translation reduced divisional sales by #294.9 million (8.2%) and
trading profit by #16.6 million (8.3%).
Both the US and Canadian businesses increased market share and showed strong
sales and profit growth in local currency terms. Local currency sales in the US
rose by 6.8%, mostly due to the full year effect of the acquisition of Clayton
in 2002 and 0.3% organic growth against a market that fell by around 2%. In
Canada, local currency sales increased by 14.5%, of which 6.1% was organic
compared with a market that increased by around 2%.
Ferguson
Despite a sluggish US economy that included continued weakness in the commercial
and industrial segments, Ferguson produced strong results due to the continued
strength in the RMI and housing markets, the successful integration and
performance of the Clayton Group and positive progress with the integration of
Familian Northwest. The markets of Texas, upper midwest, northwest, Atlanta and
Denver were particularly weak, whereas Southern California remained strong
throughout.
Local currency trading profit for the US plumbing operations increased by 10.1%
reflecting an increase in the gross margin as a result of continuing benefits
from the distribution centre network, strong cost control and acquisitions. The
distribution network will be further boosted with the opening of the Richland
distribution centre, in the State of Washington, in November 2003. The trading
margin, at 5.7%, was ahead of the prior year's margin of 5.6%. This upward trend
is consistent with the objective of achieving a 6% trading margin in 2004, a
year ahead of the original schedule.
Wolseley Canada
The Canadian residential market was buoyant throughout the year, enabling
Wolseley Canada to produce strong organic sales growth. Despite continued
weakness in the British Columbia market, new management achieved a promising
improvement in profitability. The business achieved double-digit organic sales
growth in the HVAC/R (heating, ventilation, air conditioning and refrigeration)
market against the background of a declining market. Local currency trading
profit in Canada rose by 15.5%, with a slightly increased trading margin.
There was a net increase of 21 branches in North American Plumbing and Heating
Distribution from 940 to 961 locations at 31 July 2003.
US Building Materials Distribution
The performance of the US Building Materials division ("Stock") was negatively
impacted both by currency translation and by lower lumber prices. While sales
were marginally ahead of last year in local currency terms, reported sales were
#1,712.8 million, down 7.8% (2002: #1,857.7 million), with currency translation
having caused a reduction of #161.0 million (8.7%). Trading profit was #77.5
million (2002: #91.8 million), down 15.6%, with a currency impact of #8.3
million (9.0%). An increase in the gross margin as a result of more value added
sales partly mitigated the effect of the lower lumber prices, but the trading
margin ended at 4.5% compared to 4.9% in 2002 due to the division having to
handle greater volumes of lumber at lower average prices. Net average monthly
working capital was reduced from 86.6 days in 2002 to 74.0 days this year,
primarily as a result of the successful negotiation of improved vendor terms.
In local currency, sales were up 1.0% to $2,732.3 million (2002: $2,706.5
million). Closed branches, following the reorganisation of operations in Utah
and Idaho, reduced sales by $51.1 million whilst the incremental impact of
acquisitions added $111.7 million of sales.
Commodity lumber prices, which directly affect around 40% of Stock's product
range, fell 8.3%, compared to the previous year's average, to $287 per thousand
board feet (2002: $313). This had the effect of reducing sales by $77.9 million
(2.9%) and trading profit by $13.2 million (9.9%). Like-for-like sales volumes
were higher in the year with organic growth from on-going branches up around 1%.
Housing has generally been a bright spot in the US economy over the past year.
The levels of new residential housing starts, which typically account for around
90% of the activity in this division, remain strong overall at around 1.6
million starts. Although there has been a short-term trend towards lower value
housing, the inventory of unsold new homes at less than four months, compared to
the longer term average of around six months, further demonstrates the overall
strength of the housing market. There continues to be significant variations in
regional housing markets with certain areas where Stock operates having seen
notable weakness, in particular, Atlanta, Detroit, South Florida and
Raleigh-Durham. Other markets such as Los Angeles, Tampa, Salt Lake City and
Minneapolis offset some of the weakness.
Stock is in the process of adjusting its management structure and approach in
response to changes in its market to take better advantage of its size,
technology and acquisition opportunities. This corporate re-engineering project
("NOVA"), is on track and should produce cost savings of $5 million this
financial year and at least $10 million per annum thereafter. The company is
reorganising around markets rather than individual locations and is moving from
25 regions to 10 districts this financial year. Stock also plans to increase the
number of value-added products and services being offered and increase the
penetration of the RMI market.
There was a net increase of 6 locations in the division during the year to bring
the total to 222 as at 31 July 2003 (2002: 216).
Senior Management Changes
John Whybrow, having previously been deputy Chairman, was appointed Chairman
on 13 December 2002 in succession to Richard Ireland. Andrew Hutton, Chief
Executive of Wolseley Centers and Building Distribution Northern Europe,
retired on 31 July 2003, after some nine years on the board. Gerard Legtmann
was appointed to the Wolseley Board as Chief Executive Europe on 15 August 2003,
responsible for the European Distribution division. Adrian Barden was appointed
as Managing Director of Wolseley Centers on 1 August 2003. Gareth Davis joined
the Board as a non-executive director on 1 July 2003.
Final Dividend
The board is recommending a final dividend of 15.6 pence per share to be paid to
shareholders registered on 3 October 2003. Future dividend payments will be made
earlier than in prior years, with the interim dividend to be paid around the end
of May and the final dividend paid around the end of November, commencing with
the payment of the proposed final dividend on 1 December 2003. The total
dividend for the year of 21.2 pence per share is an increase of 12.2% on last
year's 18.9 pence. Dividend cover is 2.4 times. The increase in dividend
reflects the board's confidence in the future prospects of the group and its
strong financial position. The dividend reinvestment plan will continue to be
available to eligible shareholders.
Financial Review
Net interest payable of #17.0 million (2002: #26.5 million) reflects lower
interest rates on the group's borrowings and a lower working capital to sales
ratio of 15.4% compared to 16.0% in the prior year, achieving the group's target
of 15.5% a year ahead of plan.
The effective tax rate is unchanged at 28%. It is expected that this will be the
rate for at least the next two financial years, provided the geographical
contributions to profits remain broadly similar and there are no significant
changes to tax legislation.
Before goodwill amortisation, earnings per share increased by 3.9% from 54.58
pence to 56.69 pence. Total (FRS 3) earnings per share were up by 3.1% to 51.53
pence (2002: 49.96 pence). The average number of shares in issue during the year
was 579.1 million (2002: 577.1 million). Shareholders' funds increased by #174.3
million (10.9%) from #1,599.9 million to #1,774.2 million.
Net cash flow from operating activities increased by #23.6 million (4.0%) from
#584.1 million to #607.7 million due to an improvement in working capital,
partly offset by the translation effect of a weaker dollar on the cash flows of
the US businesses. Net capital expenditure increased #11.4 million (11.8%) on
the prior year to #108.2 million reflecting continued investment in the
business.
Acquisition spend, including deferred consideration, amounted to #512.5 million
(2002: #160.3 million). Three additional acquisitions, for a combined
consideration of #14.0 million, have been completed since 31 July 2003, two in
the North American Plumbing & Heating division and the other in US Building
Materials. Further details regarding acquisitions are included in note 5.
Primarily due to the acquisition of PBM in July 2003, net borrowings, excluding
construction loan borrowings, at 31 July 2003 amounted to #826.7 million (2002:
#545.6 million), giving gearing of 46.6% compared to 34.1% at the previous year
end. Free cash flow increased from #248.0 million to #268.7 million (8.3%).
Construction loan receivables, financed by an equivalent amount of construction
loan borrowings, were #176.2 million at the end of the financial year, compared
to #171.4 million at 31 July 2002. The increase is due to an expanding loan book
partly offset by the weaker US dollar.
Return on gross capital employed, including goodwill, is 16.7% in 2003 (2002:
16.7%), more than 4% ahead of the group's weighted average cost of capital.
The unamortised balance of acquisition goodwill in the balance sheet as at 31
July 2003 is #686.8 million (2002: #502.7 million). The increase reflects the
acquisition spend in the current year, primarily PBM.
There has been no significant change during the year concerning asbestos claims.
The estimated liability, which is fully covered by insurance, is not material to
the group's financial position. Insurance cover significantly exceeds the
estimated liability and is a multiple thereof. There has been no profit and loss
account charge in this, or any prior financial year, relating to asbestos claims
and no such charge is expected to arise in the future.
Note 6 sets out the pension deficit as at 31 July 2003 of the group on an FRS 17
basis. Had FRS 17 been fully adopted at that date, shareholders' funds would
have been reduced by #108 million.
Outlook
The underlying performance of the group remains strong against a background of
mixed and uncertain market conditions, which are unlikely to change
significantly in the short-term.
In the UK, the RMI market will continue to be the main driver of growth with
increasing benefits arising from the expected expansion in government spending.
The upward trend in the second half UK trading margin is expected to continue.
Continental European markets have been difficult and are likely to remain flat,
but the group expects a continuation of the trend seen over the last year with
the group's businesses generally outperforming local markets and achieving a
modest improvement in sales and profitability.
US housing demand is expected to remain strong unless there are significant
increases in levels of unemployment and/or interest rates. Regional variations
are likely to continue but the positive fundamental drivers of demand should
help to underpin the sustainability of the housing market. Activity in the
remodelling sector is likely to be boosted by the positive impact on RMI from
the tendency for more Americans to stay at home. The industrial and commercial
sector is unlikely to improve until at least the second half of 2004.
In Canada the SARS epidemic, the power outages in Ontario and the recent forest
fires in British Columbia have had an adverse short term impact on the economy
and, consequently, the Canadian business has made a slower than expected start
to the financial year. However, it is expected that the overall environment will
recover and remain positive.
The group is well placed to deliver value enhancing opportunities from organic
and acquisitive growth.
Additional investment in the group's infrastructure over the next financial year
will create opportunities for achieving synergies and leveraging the group's
international strengths while supporting the group's objective of achieving
double-digit sales and profit growth.
Exchange Rates
The average profit and loss account translation rates for the year were $1.595
to the #1 (2002: $1.457), a fall of 8.7%, and Euro1.504 to the #1 (2002: Euro1.609), a
rise of 7.0%.
This News Release contains certain forward-looking statements as defined under
US legislation (Section 21E of the Securities Exchange Act of 1934). By their
nature, such statements involve uncertainty; as a consequence, actual results
and developments may differ from those expressed in or implied by such
statements.
GROUP PROFIT AND LOSS ACCOUNT
--------- ---------
Year to Year to
31 July 2003 31 July 2002
--------- ---------
#m #m
Turnover (note 3)
Continuing operations 8,022.9 7,967.6
Acquisitions 198.1 -
--------- ---------
8,221.0 7,967.6
========= =========
Operating profit before goodwill amortisation 472.9 463.9
(note 4)
Goodwill amortisation (29.9) (26.7)
Operating profit
--------- ---------
Continuing operations 431.4 437.2
Acquisitions 11.6 -
--------- ---------
443.0 437.2
--------- ---------
--------- ---------
Profit on ordinary activities before interest 443.0 437.2
Net interest payable (17.0) (26.5)
--------- ---------
Profit on ordinary activities before tax 426.0 410.7
Taxation
Current tax charge (118.0) (108.1)
Deferred tax charge (9.6) (14.4)
--------- ---------
(127.6) (122.5)
--------- ---------
Profit after tax (attributable to ordinary 298.4 288.2
shareholders)
Dividends (123.1) (109.2)
--------- ---------
Profit retained 175.3 179.0
========= =========
Earnings per share
Before goodwill amortisation 56.69p 54.58p
Goodwill amortisation (5.16)p (4.62)p
--------- ---------
Basic earnings per share 51.53p 49.96p
--------- ---------
Diluted earnings per share 51.12p 49.46p
Dividends per share 21.20p 18.90p
Translation rates
US dollars 1.5951 1.4569
Euro 1.5039 1.6085
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
--------- ---------
Year to Year to
31 July 2003 31 July 2002
--------- ---------
#m #m
Profit for the period 298.4 288.2
Currency translation difference (10.4) (84.3)
--------- --------
Total gains and losses recognised during the 288.0 203.9
year --------- --------
GROUP BALANCE SHEET AT 31 JULY
--------- ----------
2003 2002
Total Total
--------- ----------
#m #m
FIXED ASSETS
Intangible assets 686.8 502.7
Tangible assets 716.8 582.1
--------- ----------
1,403.6 1,084.8
--------- ----------
CURRENT ASSETS
Stocks 1,303.5 1,050.9
Debtors and property awaiting disposal 1,780.3 1,372.7
Construction loans receivable (secured) 176.2 171.4
Investments 6.9 9.3
Cash at bank, in hand and on deposit 215.9 204.9
--------- ----------
3,482.8 2,809.2
--------- ----------
CREDITORS: amounts falling due within one year
Bank loans, overdrafts and other loans 207.0 252.2
Construction loan borrowings (unsecured) 176.1 171.4
Corporation tax 72.6 46.0
Proposed dividend 90.5 80.3
Other creditors 1,579.6 1,119.6
--------- ----------
2,125.8 1,669.5
--------- ----------
NET CURRENT ASSETS 1,357.0 1,139.7
--------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 2,760.6 2,224.5
--------- ----------
CREDITORS: amounts falling due after one year
Borrowings 842.5 507.6
--------- ----------
PROVISIONS FOR LIABILITIES AND CHARGES 143.9 117.0
--------- ----------
986.4 624.6
========= ==========
1,774.2 1,599.9
========= ==========
CAPITAL AND RESERVES
Called up share capital 145.2 144.5
Share premium account 177.8 169.1
Profit and loss account 1,451.2 1,286.3
--------- ----------
SHAREHOLDERS' FUNDS 1,774.2 1,599.9
========= ==========
Translation rates:
US Dollars 1.6076 1.5622
Euro 1.4171 1.5934
SUMMARISED GROUP CASH FLOW STATEMENT
------------ ----------
Year to Year to
31 July 2003 31 July 2002
----------- ----------
#m #m
CASH FLOW FROM OPERATING ACTIVITIES* 607.7 584.1
Returns on investments and servicing of finance (24.8) (22.5)
Taxation paid (108.1) (119.6)
Net capital expenditure and financial investment (108.2) (96.8)
Acquisitions (507.2) (169.9)
Disposals 3.0 8.2
Equity dividends paid (113.0) (100.1)
Financing - Issue of shares 9.4 7.6
----------- ----------
CHANGE IN NET DEBT RESULTING FROM CASH FLOWS (241.2) 91.0
New loans and finance leases - (2.6)
Loans and finance leases acquired with (20.6) -
subsidiary
Translation difference (19.3) 59.7
----------- ----------
Movement in net debt in period (281.1) 148.1
Opening net debt (545.6) (693.7)
----------- ----------
Closing net debt (826.7) (545.6)
=========== ==========
* RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
----------- ----------
Year to Year to
31 July 2003 31 July 2002
#m #m
----------
Operating profit 443.0 437.2
Depreciation charges 93.1 92.5
Goodwill amortisation 29.9 26.7
(Increase)/decrease in stocks (48.3) 7.4
Increase in debtors (32.9) (24.0)
Increase in creditors & provisions 123.0 44.0
(Increase)/decrease in net construction loans (0.1) 0.3
=========== ==========
Net cash flow from operating activities 607.7 584.1
=========== ==========
NOTES ON THE ATTACHED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET
1 These accounts have been prepared on the basis of the accounting
policies set out in the group's 2003 Annual Report and Accounts.
2 The financial information set out above is extracted from the group's full
accounts for the years ended 31 July 2002 and 31 July 2003. Statutory
accounts for 2002 have been delivered to the Registrar of Companies, and
those for 2003 will be delivered following the Annual General Meeting. The
auditors have reported on those accounts; their reports were unqualified
and did not contain statements under section 237(2) or (3) of the Companies
Act 1985.
3 Analysis of change in sales
New Acquisitions
Acquisitions Increment
2002 Exchange 2003 2002 Organic Change 2003
#m #m #m #m #m % #m
European
Distribution 2,517.5 62.1 121.5 136.6 119.0 4.6 2,956.7
North
American
Plumbing &
Heating
Distribution 3,592.4 (294.9) 21.5 198.9 33.6 1.0 3,551.5
------ ------- ------- ------- ------ ------ ------
US Building
Materials
Distribution 1,857.7 (161.0) 55.1 14.9 (53.9) (3.2) 1,712.8
------ ------- ------- ------- ------ ------ ------
7,967.6 (393.8) 198.1 350.4 98.7 1.3 8,221.0
------ ------- ------- ------- ------ ------ ------
4 Analysis of change in operating profit before goodwill amortisation
New Acquisitions
Acquisitions Increment
2002 Exchange 2003 2002 Organic Change 2003
#m #m #m #m #m % #m
European
Distribution 171.4 3.2 6.3 5.3 7.0 4.0 193.2
North American
Plumbing &
Heating
Distribution 200.7 (16.6) 1.0 16.3 0.8 0.4 202.2
US Building
Materials
Distribution 91.8 (8.3) 5.9 0.2 (12.1) (14.5) 77.5
------ ------- ------- ------- ------ ------ ------
463.9 (21.7) 13.2 21.8 (4.3) (1.0) 472.9
------ ------- ------- ------- ------ ------ ------
5 Summary of acquisitions
An analysis of the acquisition spend incurred and the expected
contribution to turnover in a full year is as follows:
Acquisition Full year
Spend contribution to
turnover
#m #m
Division
European Distribution 451 940
North American Plumbing & Heating Distribution 26 74
--------- ----------
US Building Materials Distribution 36 97
========= ==========
513 1,111
========= ==========
Since the year end, the group has completed a further three acquisitions in
North America, for a total consideration of #14 million. In a full year, these
acquisitions will add a further #37 million of sales.
The above consideration is subject to adjustment in certain of the acquisitions.
6 Pensions and post-retirement benefits
The following table sets out the funding position of the defined benefits
pension schemes operated by the group:
As at As at
31 July 2003 31 July 2002
#m #m
--------- ----------
Market value of pension liability 546 446
Market value of pension assets (340) (314)
--------- ----------
206 132
--------- ----------
Pension provisions under current UK GAAP (50) (44)
Deferred tax asset (48) (28)
========= ==========
FRS 17 adjustment to net assets 108 60
========= ==========
TIMETABLE FOR AGM AND DIVIDENDS
2003
21 November - Annual General Meeting
1 October - Shares quoted ex-dividend
3 October - Record date for dividend
10 November - Final date for DRIP elections
1 December - Dividend payment date
A copy of this Preliminary Announcement, together with other recent public
announcements can be found on Wolseley's web site at www.wolseley.com. Copies of
the Preliminary Results' presentation given to stockbrokers' analysts are also
available on the site.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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