Wolseley to pay a £350m special dividend to shareholders

Wolseley is to hand a £350m special dividend to shareholders as steady markets in America helped the building services giant counter the impact of "deteriorating demand" in Europe.

The FTSE 100-listed business, which owns Plumb Center in the UK, said the £350m special dividend reflected Wolseley's "strong financial position".

Over the course of the year, Wolseley has sold off several businesses, including Build Center and Bathstore, and the special dividend represents the proceeds from those disposals.

Wolseley is also currently considering whether to sell off its French business. Three months ago, the group said that it was exploring "strategic options" for the future of the business, which had been adversely affected by the eurozone crisis and flooding in France.

New construction markets in France have also been hurt by government incentives put in place to spur building over the last two years coming to an end.

Ian Meakins, Wolseley's chief executive, said on Tuesday that the strategic review was ongoing. He added that they were considering all options, such as an outright sale or a potential joint venture.

Wolseley flagged "considerable uncertainty in the eurozone", but the business said that weakness in Europe had been partly offset by steadier markets in America and Canada, where there has been an improvement in commercial and industrial activity.

Despite "deteriorating demand" in Europe and a "weak market" in the UK, Wolseley's annual revenues were virtually flat on the year, edging down to £13.4bn from £13.6bn last time.

Pre-tax profits fell to £198m from £391m last time due to a goodwill write-off relating to acquisitions made in recent years. Its total trading profit was £665m compared to £622m last time.

Commenting on the outlook for the coming year, Mr Meakins said: "Demand across our markets remains mixed and the economic outlook continues to be uncertain."

"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," he said.

Source: Rachel Cooper - The Telegraph
www.telegraph.co.uk/finance/newsbysector/industry/9580587/Wolseley-doles-out-350m-special-dividend.html