Wolseley reveals £350m dividend bonanza

The FTSE 100 group, which trades under the Plumb Center brand in the UK and the Ferguson name in the United States, also plans to pay a total dividend of 60p, up a third on a year earlier.

The bumper shareholder returns follow heavy cost-cutting and disposals at the group, including selling Build Center last year and cutting jobs and branches.

It booked restructuring charges of £17m during the year and ended July with net cash of £45m, versus £523m debt a year earlier.

Chief executive Ian Meakins said the special dividend “reflects the group’s strong financial position and our desire to maintain an efficient and sustainable balance sheet”.

Wolseley reported a 5.4 per cent increase in sales to £12.7bn from ongoing business during the year to the end of July. Trading profits before exceptional items and impairment at continuing businesses rose 10.4 per cent to £658m.

Wolseley, which also has the Parts, Pipe, Climate and Drain Center brands in the UK, said the results were “decent” when set against deteriorating demand in continental Europe, a weak market in the UK and steady market conditions in the US and Canada.

“Demand across our markets remains mixed and the economic outlook continues to be uncertain,” said Mr Meakins.

“Revenue growth rates in the new financial year have been similar to the fourth quarter of last year. We will continue to reduce our cost base to protect profitability but also to make investments in our businesses that will improve the quality of our operations and generate growth in the future.

“Whilst we remain cautious about the outlook for our markets, we are confident that Wolseley will make good progress in the year ahead.”

In May, Leeds-based turnaround group Endless bought bath retailer Bathstore for £15m from Wolseley.

In the UK its trading margin increased to 5.5 per cent from 5.3 per cent, despite like-for-like revenues dipping 0.8 per cent to £1.7bn.

The group said it sees no sign of improving market conditions in the UK, adding growth will come from market share gains in the short term.

Its UK workforce has fallen to 5,913 from 6,234 a year earlier on a like-for-like basis. Including asset disposals, this has fallen heavily from 8,769 a year earlier. It employs around 360 staff at its site in Ripon, North Yorkshire.

UK branch numbers have fallen to 919 from 933 in 2011.

It now employs about 40,500 globally, down from about 46,000 a year earlier.

Wolseley said cost-cuts will continue and its continental Europe business “needs to adjust for challenging market conditions”.

Staff, branches, logistics, support and other infrastructure there are all under review, and Wolseley expects restructuring charges to be at least £25m in its new financial year. Wolseley said it continues to review its operations in France, where conditions are worsening, and could sell it.

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