Wolseley PLC WOS Annual Financial Report

  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

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/[11] 
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 

The expected timetable  for the  Final Dividend, Annual  General Meeting,  the 
Special Dividend and Share Consolidation are set out below:

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
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
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
Commencement of dealings in new ADSs                   8.00am (UK time) on 10
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
References to times in the above timetable areto Swiss time unless otherwise

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

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

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 
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.

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 

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" 

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 

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 

· 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


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