£300m bonus for Wolseley shareholders

Grant Prior 11 years ago
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Materials giant Wolseley is planning a £300m return to shareholders through a special dividend following a surge in profit as the construction market shows signs of recovery.

The US and UK markets led the way as pre-tax profits ticked up to £473m for the year to July 31 from £198m last time on turnover up to £12,854m from £12,345m.

The UK business saw revenue growth of more than 5% in the final two quarters of the year as it returned a turnover of £1,769m for the year and an operating profit of £95m.

Wolseley’s UK analysis said: “Revenue in the ongoing UK business was 2.5% ahead of last year on a like-for-like basis.

“New residential construction and RMI markets improved in the second half.  There was no significant price inflation during the year.

“Plumb and Parts Center increased market share as did Pipe and Climate Center though growth was held back by weaker industrial markets.

“Gross margins were down on last year due to the dilutive impact of the Burdens acquisition in January and a challenging pricing environment.

“Operating expenses were 2% lower when excluding the impact of the Burdens acquisition and 2% higher on an ongoing basis.  Headcount in the ongoing business increased by 52.

“Trading profit for the ongoing business of £95 million was £2 million ahead of last year, principally due to one-off property gains.

“The trading margin was 5.7% excluding the impact of the Burdens acquisition and on an ongoing basis was 5.4% (2012: 5.6%).”

The special divided to shareholders is planned for December.

Ian Meakins, Chief Executive, said: “We are today proposing a special dividend of £300 million accompanied by a share consolidation which reflects the Group’s strong financial position and our desire to maintain an efficient and sustainable balance sheet.

“In the year ahead we plan to increase our investments where there are growth opportunities, and in technology and processes to develop more efficient business models.  This will improve the leverage in our business and generate good growth in the future.”

 

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