Wolseley PLC (WOS) - Annual Financial Report RNS Number : 6875P Wolseley PLC 26 October 2012 WOLSELEY PLC (the "Company") Publication Announcement: Annual Report and Accounts 2012 and Notice of Annual General Meeting 2012 Further to the release of the Company's preliminary results announcement on 2 October 2012, the Company announces that it has today published its Annual Report and Accounts 2012 ("Annual Report 2012"). The Company also announces that it has today posted to shareholders the Notice of Annual General Meeting to be held on 29 November 2012 (the "Notice"). The Annual General Meeting will take place at 3pm Swiss time (2pm, UK time) on Thursday, 29 November 2012 at Parkhotel, Industriestrasse 14, CH-6304, Zug, Switzerland with an audio-visual link to Deutsche Bank's London office, Winchester House, 1 Great Winchester Street, London, EC2N 2DB. In accordance with LR 9.6.1 copies of the documents listed below have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.Hemscott.com/nsm.do: · Annual Report and Accounts 2012; and · Notice of Annual General Meeting to be held on 29 November 2012. In compliance with DTR 6.3.5(3) those documents can also be downloaded in pdf format form the Company's website at www.wolseley.com/index.asp?pageid=321and from 29 October 2012 an online version of the Annual Report can be accessed at http://annualreport2012.wolseleyplc.com. Special Dividend and Share Consolidation On 2 October 2012, the Company announced its intention to return approximately £350 million to shareholders via a Special Dividend and Share Consolidation. The Notice sets out full details of the proposed Special Dividend and associated Share Consolidation. Special Dividend It is proposed that the amount of the Special Dividend is 122 pence per Existing Ordinary Share. The Board is proposing to pay the Special Dividend to Shareholders who are on the Register at 5.00pm (UK time) on 7 December 2012. The Special Dividend is expected to be paid to Shareholders on 31 December 2012. Share Consolidation It is proposed that the payment of the Special Divided be accompanied by a consolidation of the Company's ordinary share capital. The Share Consolidation will replace every 23 Existing Ordinary Shares with 22 New Ordinary Shares. Upon the Share Consolidation becoming effective, the nominal value of the Existing Ordinary Shares will change from 10 pence to 10^5/ pence per New Ordinary Share. Fractional entitlements arising from the Share Consolidation will be aggregated and sold in the market as soon as practicable after the Share Consolidation for the best price reasonably obtainable on behalf of the relevant Shareholders. The net proceeds of the sale, after the deduction of the expenses of the sale, are expected to be paid in due proportion to the relevant Shareholders on Friday, 21 December 2012. The value of any Shareholder's fractional entitlement will not exceed the value of one New Ordinary Share. As at the close of business on 24 October 2012 (being the latest practicable date prior to the publication of the Notice) when the closing mid-market price per Existing Ordinary Share was 2677 pence and there were 286,350,888 Existing Ordinary Shares in issue, the total amount of the Special Dividend was equivalent to approximately 4.56 per cent. of the market capitalisation of the Company. The effect of the Share Consolidation will be to reduce the number of Existing Ordinary Shares in issue by approximately the same percentage. As all ordinary shares will be consolidated, each Shareholder's shareholding as a proportion of the total number of issued ordinary shares in the share capital of the Company will be the same immediately before and after the implementation of the Share Consolidation (save in respect of fractional entitlements). The expected timetable for the Final Dividend, Annual General Meeting, the Special Dividend and Share Consolidation are set out below: 2012 Existing Ordinary Shares marked ex-entitlement to the 10 October Final Dividend Record date for entitlement to the Final Dividend 5.00pm (UK time) on 12 October Latest time and date for election to participate in 5.00pm (UK time) on 9 the DRIP for the Final Dividend November Latest time and date for receipt by the ADR Depositary 10.00am (New York time) of completed voting instruction cards from holders of on 23 November ADRs Latest time and date for receipt of Forms of Proxy 3.00pm on 27 November from Shareholders Annual General Meeting 3.00pm on 29 November Payment of the Final Dividend to Shareholders 30 November Purchase of Existing Ordinary Shares for participants 30 November in the DRIP in respect of the Final Dividend Existing Ordinary Shares purchased pursuant to the 6 December DRIP in respect of the Final Dividend credited to CREST accounts Record date for entitlement to the Special Dividend 5.00pm (UK time) on 7 and for the Share Consolidation December ADR record date for entitlement to the Special 5.00pm (UK time) on 7 Dividend December Commencement of dealings in New Ordinary Shares 8.00am (UK time) on 10 December Commencement of dealings in new ADSs 8.00am (UK time) on 10 December Existing Ordinary Shares marked ex-entitlement to the 10 December Special Dividend CREST accounts credited with New Ordinary Shares 10 December Latest time and date for election to participate in 5.00pm (UK time) on 11 the DRIP for the Special Dividend December Payment (where applicable) of fractional entitlements 21 December for New Ordinary Shares; despatch (where applicable) of certificates for New Ordinary Shares Payment of the Special Dividend to Shareholders 31 December Purchase of New Ordinary Shares for participants in 31 December the DRIP in respect of the Special Dividend New Ordinary Shares purchased pursuant to the DRIP in 7 January 2013 respect of the Special Dividend credited to CREST accounts References to times in the above timetable areto Swiss time unless otherwise stated. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by an announcement to a Regulatory Information Service. All definitions used in the Notice have the same meaning when used in this announcement. Annual Report 2012 A condensed set of Wolseley plc financial statements and information on important events that have occurred during the year and their impact on the financial statements were included in the Company's final results announcement on 2 October 2012. That information together with the information set out below which is extracted from the Annual Report 2012 constitute the requirements of DTR 6.3.5 which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report 2012. Page and note references in the text below refer to page numbers in the Annual Report 2012. To view the preliminary announcement, visit the Company website: www.wolseley.com. Principal risks and uncertainties The nature of the industry in which we operate and our chosen strategy expose the Company to a number of risks. There are areas of the Group's business where it is necessary to take risks to achieve a satisfactory return for shareholders. The Board has considered the nature and extent of the significant risks it is willing to take in achieving the Group's strategic objectives. The materialisation of these risks could have an adverse effect on the Group's results or financial condition. If more than one of these risks occur, the combined overall effect of such events may be compounded. Various mitigation strategies are employed to reduce these inherent risks to an acceptable level - these are summarised on the following pages. This year, "liquidity and funding" risks have been removed from the list of principal risks in light of the Group's strengthened financial performance, net debt levels and funding arrangements. "Capital expenditure and return on investment" risks have also been removed in light of lower risk levels and stronger controls. Some risk factors remain beyond the direct control of the Company and the risk management programme can only provide reasonable but not absolute assurance that key risks are managed to an acceptable level. The Company faces many other risks which, although important and subject to regular review, have been assessed as less significant and are not listed here. These include, for example, treasury or health and safety related risks. Further information on financial risks and their management is contained on page 41. More information on health and safety can be found on page 53. Inherent risk and Definition Mitigation trend Market conditions Inherent risk The Group's results depend The Company believes it has level: High on the levels of activity in effective measures in place to new construction and respond to market conditions. Trend: Stable property repair and Our mitigation strategy is to remodelling markets. In reinforce existing measures in light of the debt levels in place. These include: resource Europe and concerns about allocation processes; the USA recovery, there planning, budgeting and continues to be a risk that forecasting processes; debt markets may fluctuate reduction and refinancing; cost rapidly or experience reduction, pricing and gross further downturns. Factors margin management initiatives, influencing this risk including a focus on customer include: the general rate of service and productivity GDP growth; consumer improvement; diversification confidence; the availability into the sectors, such as of credit to finance commercial and industrial, customer investment; which have proved more robust; mortgage and other interest and improvements in monthly rates; the level of management information. government initiatives to Measures introduced in the last stimulate economic activity; 12 months include the disposal inflation; and of businesses where the Company unemployment. These factors cannot establish a market are out of the Group's leading position in attractive control and are difficult to markets. Such operations forecast. Traditional included Bathstore and Build processes for producing Center in the UK and Brossette management information may in France. The Company has also need enhancing to enable the announced its intention to Company to respond to such explore strategic options for rapidly-changing markets. its other businesses in France. The quality of monthly management information has been improved to enable businesses to better identify and respond to changes in the business environment. Margin erosion Inherent risk Market conditions continued The Company continues to level: High to increase competition reinforce the mitigation during the period under actions in place. Gross margin Trend: Stable review, which, if not improvement initiatives remain mitigated, could lead to a priority for all businesses. downward pressure on sales We believe that high levels of prices and profit margins. customer service and product There is a risk that such availability play a fundamental competitive pressures will role in maintaining competitive continue and could be advantage. The Group has exacerbated by factors such continued with its programme of as levels of economic work to improve levels of activity, customer or customer service and inventory. supplier consolidation, A number of local initiatives manufacturers shipping have been undertaken by directly to customers, other Wolseley businesses in the last changes in the route to 12 months, including: improved market, and changes in analysis of monthly margin technology. performance at Group and business unit level; dedicated gross margin initiatives and expense reduction programmes in Canada improved transparency on performance and incentives in the USA through the use of an innovative software tool; improved claims management in the UK businesses; and improved supplier pricing terms in the Nordic region. Litigation Inherent risk The international nature of Levels of litigation are level: Wolseley's operations monitored by individual Medium/high exposes it to the potential operating companies and by for litigation from third Group functions. To reduce its Trend: Stable parties, and such exposure exposure to product-related is considered to be greater claims, the Company has this in the USA than in Europe. year launched a major "Product Wolseley's strengths include Integrity" programme. This its employees, its products included a refreshed policy and and the terms it negotiates set of requirements to which with its suppliers. It is in all businesses must adhere, as these areas where the well as a programme of risk potential risk of litigation assessments and KPIs for major may be greatest. Although product categories. Further the number of claims made information is provided on page against the Company has 59. The Company has been increased slightly during reviewing and improving its the year, there has been no working practices especially in material change in the level the United States and France in of exposure to the Group. light of the more complex For more information on labour laws in those specific litigation countries. In the case of affecting the Company, see claims related to exposure to pages 104, 125, 136 and 157. asbestos, Wolseley employs independent professional advisers to actuarially determine its potential gross liability. Wolseley has insurance which exceeds the current estimated liability relating to asbestos claims. This year the Company has also improved the general liability insurance cover it procures. Employee motivation and retention Inherent risk Wolseley's ability to An updated, comprehensive level: Medium provide leadership and People Strategy was approved by products and services to the Board in 2011. This sets Trend: Stable customers depends on out key principles and retaining sufficiently practices for people qualified, experienced and management, which operating motivated personnel. In companies will implement in order to increase their businesses. Specific productivity, and be able to examples of activity in take growth opportunities business units includes: when markets improve, reviews of succession planning Wolseley must maintain the and improved interview skills and experience of its processes in Canada; and a new existing management and leadership skills programme in continue to develop the Wolseley UK. Effective personal managers of the future. performance management While staff turnover rates underpins this strategy. The are stable at present the quality of individuals' current difficult conditions performance reviews is being experienced in certain monitored and improved in all markets, and the Group's areas of the business. The response to them, may Company monitors voluntary demotivate remaining staff. turnover rates and employee engagement scores. Further metrics will be put in place in the coming year. Succession planning exercises are undertaken each year, along with a review of the Company's most talented and promising individuals. Career mobility has been increased, providing more staff with the opportunity to work in different areas of the Group. The Group continues to invest in development programmes for senior leadership, managers and all other staff. Systems and Infrastructure capabilities and resilience Inherent risk The Group can only carry on Core IT systems and data level: Medium/low business as long as it has centres for the Nordics, USA the information technology and UK have documented disaster Trend: Rising and the physical recovery plans which are tested infrastructure to do so. The annually. In the United States, safe and continued operation significant improvements have of such systems and been made in the recovery times infrastructure is threatened for core systems and our by natural and man-made business there has been perils and is affected by certified as Payment Card the level of investment Industry compliant. External available to improve them. reviews have been conducted of For example: some of the data centres in the UK and Company's physical assets Denmark, and recommendations are located in areas exposed for improvement are being to natural catastrophe addressed. The Company operates risks; we remain reliant on an IT governance framework a number of different including dedicated IT security technology systems across policies. Specific operational the Group, some of which controls for IT security have been operating for many include intrusion prevention years; to optimise costs and and detection, penetration supply chain efficiency, testing, wireless remediation some companies within the of issues, log and Wolseley Group have also configuration management and centralised their in-flight projects to reduce distribution network and are the likelihood of an incident. therefore reliant on a The Company has made initial smaller number of larger investments in software to distribution centres; and improve its ability to identify the level and sophistication and recover data. The loss of a of IT security threats are physical site is naturally increasing. hedged by the diversified nature of our locations, customers and suppliers. The Company has formally documented and tested plans for those distribution centres, head office buildings and data centres where the risk is deemed to be greatest. A comprehensive insurance programme is purchased, including coverage for "cyber" risks. Related Party Transactions There are no related party transactions requiring disclosure under IAS24. "Related Party Disclosures" other than the compensation of key management personnel which is set out in the following table: 2012 2011 Key management personnel compensation (including Directors) £m £m Salaries, bonuses and other short-term employee benefits 8 9 Termination and post-employment benefits - 1 Share-based payments 4 1 Total compensation 12 11 More detailed disclosures on the remuneration of the Directors are provided in the Remuneration report on pages 84 to 96. Directors' Responsibilities Statement This statement is repeated here solely for the purpose of complying with DTR 6.3.5. This statement relates to and is extracted from the Annual Report 2012. It is not connected to the extracted information presented in this announcement or the preliminary results announcement released on 2 October 2012. The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations. The Directors have prepared the Directors' Remuneration Report as if the Company were required to do so in accordance with the UK Companies Act 2006. Companies (Jersey) Law 1991 requires the Directors to prepare Group financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The Directors are also responsible for preparing parent company financial statements in accordance with United Kingdom Accounting Standards, and for being satisfied that the Group and parent company financial statements give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Company and Group for that period. In preparing these financial statements, the Directors are required to: · select suitable accounting policies and then apply them consistently; · make judgements and accounting estimates that are reasonable and prudent; · state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent company financial statements respectively; and · prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Group financial statements comply with the Companies (Jersey) Law 1991 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the Company's website. Jersey legislation and United Kingdom regulation, governing the preparation and dissemination of financial statements, may differ from legislation in other jurisdictions. Each of the Directors, whose names and functions are listed on pages 64 and 65, confirm that, to the best of their knowledge: · the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and · the Performance review contained in the report of the directors includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces. For further information please contact Wolseley plc Richard Shoylekov Tel: +41 (0) 41723 2230 Group Company Secretary and General Counsel Notes to editors 1. About Wolseley Wolseley plc is the world's largest specialist trade distributor of plumbing and heating products to professional contractors and a leading supplier of building materials in North America, the UK and Continental Europe. Group revenue for the year ended 31 July 2012 was £13,421 million and trading profit was £665 million. Wolseley has approximately 41,000 employees, is listed on the London Stock Exchange (LSE: WOS) and is in the FTSE 100 index of listed companies. For more information, please visit www.wolseley.com or follow us on Twitter https://twitter.com/wolseleyplc. This information is provided by RNS The company news service from the London Stock Exchange END ACSEQLFLLBFLFBK -0- Oct/26/2012 15:30 GMT
Wolseley PLC WOS Annual Financial Report
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