RNS Number:8260I
Wolseley PLC
17 March 2003

                                                                   17 March 2003

                                   NEWS RELEASE

(Wolseley today announces interim results for the half year ended 31 January
2003. These results are being released ahead of its planned announcement date,
Tuesday 18 March 2003, due to an inadvertent administrative error. The meetings,
as indicated at the bottom of the release, will go ahead on Tuesday 18 March
2003 as planned).


           Interim results for the half year ended 31 January 2003

                 Wolseley announces record first half results.





Summary of Results





Financial highlights



*         In constant currency terms:-



      -     Group sales up                                                 7.2%



      -     Group operating profit, before goodwill amortisation, up       6.0%



      -     Group pre-tax profit, before goodwill amortisation, up         8.0%





*          As reported, in sterling (after currency translation effect)



-          Group sales up 1.4% to #4.0 billion (2002: #3.9 billion)

-          Group operating profit, before goodwill amortisation, up 0.7% to
#212.3 million (2002: #210.9 million).  Operating profit, after goodwill
amortisation, up 0.1% to #198.3 million (2002: #198.2 million)

-          2002 figures included one off property profits of #5.6 million
(2003: #0.3 million).   The net impact of these property profits affects the
year on year operating profit comparison by 2.5%.


-          Currency translation has reduced group sales by #212.9 million
(5.4%) and group operating profit by #10.7 million (5.1%).

-          Group pre-tax profit, before goodwill amortisation, up 2.7% to
#201.1 million (2002: #195.9 million).   Profit before tax up 2.1% to #187.1
million (2002: #183.2 million).

-          Earnings per share, before goodwill amortisation, up 2.4% to 25.05p
(2002: 24.46p).  Basic earnings per share up 1.7% to 22.64p (2002: 22.26p).

-          Reduction in  half year working capital to sales ratio from 16.3% to
15.8% of sales.

-          Interim dividend up by 12% to 5.6 pence

-          Strong financial position with gearing below 35% and interest cover 
over 17 times.

Operating highlights

  * The group's principal businesses have continued to outperform in their
    respective markets

*   Strong organic growth performance, relative to the market, in European
    distribution and North American Plumbing and Heating distribution divisions.


*   Good trading margin improvements achieved in the group's US and
    continental European plumbing and heating distribution operations.


*   Branch network expanded by 81 locations (2.8%) to 3,020 as at 31 January
    2003.

*   Reorganisation of the management structure of the US Building
    Materials division should generate cost savings of at least $10 million per
    annum from 2004/5.





Outlook



  * There is no current evidence of a significant downturn in activity levels
    in the group's businesses.  However, current global economic and political
    uncertainties are likely to continue to affect the group's markets in the
    short term.  .

  * Outlook for the UK market remains favourable.

  * US markets are likely to continue to show a mixed pattern, both by sector
    and geography.  US residential housing is expected to hold up well.

  * Canadian market environment is positive.


  * The improving sales and profit trends in continental Europe are expected
    to continue, despite flat markets.


  * Continued focus on tight cost control, margin enhancement and exploiting
    growth opportunities.



Charles Banks, Wolseley plc Group Chief Executive said:

"I am pleased to announce record first half results despite the mixed economic
environment in the USA and continental Europe together with the adverse impact
of currency translation on our reported results. The group's principal
operations have continued to outperform in their respective markets and we are
confident that this trend will continue in the second half."



This news release contains numerous forward looking statements, concerning
future economic conditions and other factors which are beyond the control of
Wolseley.  For more detail on the factors which could cause actual results to
differ materially from those discussed in this release, see our annual reports
on file with the US Securities and Exchange Commission.






                               SUMMARY OF RESULTS


                                                  As at, and for the six months
                                                               ended 31 January

                                                        2003               2002               Change

Sales                                              #3,964.1m          #3,910.5m                 1.4%

Operating profit
- before goodwill amortisation                       #212.3m            #210.9m                 0.7%
- goodwill amortisation                             #(14.0)m           #(12.7)m


Operating profit                                     #198.3m            #198.2m                 0.1%
Interest                                            #(11.2)m           #(15.0)m

Profit before tax
- before goodwill amortisation                       #201.1m            #195.9m                 2.7%
- goodwill amortisation                             #(14.0)m           #(12.7)m



Profit before tax                                    #187.1m            #183.2m                 2.1%

Earnings per share
- before goodwill amortisation                        25.05p             24.46p                 2.4%
  - goodwill amortisation                            (2.41)p            (2.20)p

Basic Earnings per share                              22.64p             22.26p                 1.7%

Dividend per share                                     5.60p              5.00p                12.0%


Net borrowings                                       #570.1m            #632.9m

Gearing                                                34.6%             39.3 %

Interest cover (times)                                  17.7               13.2



ENQUIRIES:




Wolseley plc                                             Brunswick Group Ltd
 tel: 0118 929 8700                                      tel: 020 7404 5959



Charles Banks - Group Chief Executive                    Andrew Fenwick
Steve Webster - Group Finance Director                   Sophie Fitton


An interview with Charles Banks, Group Chief Executive and Steve Webster, Group
Finance Director, in video/audio and text will be available from 0700 (GMT) on
www.cantos.com

A live audio cast and slide presentation will be available at 0900 (GMT) on
www.wolseley.com

There will be a UK analyst meeting at 0900 (GMT) at UBS Warburg Presentation
Centre, 1 Finsbury Avenue, London EC2.

There will be a conference call at 1400 (GMT):
UK/European dial-in number:                           +44 (0)20 8515 2312
US dial-in number:                                    +1 303 205 0033
Password:                                             Wolseley

The call will be recorded and available for playback on the following numbers:

UK/European replay dial-in number:                    +44 (0) 20 8797 2499
UK/European access code:                                           873988#
US replay dial-in number:                                 +1 303  590 3000
US access code:                                                    526743#

The Instant Replay will be available until 21 March 2003.





                                  NEWS RELEASE

                                 17 March 2003





                       Announcement of Interim Results
           Unaudited results for the half year ended 31 January 2003





Announcement of Interim Results





Wolseley is pleased to announce record first half results, despite mixed
business conditions in the USA and continental Europe and the adverse impact of
currency translation.  Each of Wolseley's principal businesses have continued to
outperform in their respective markets.  The organic growth of the European
distribution and North American Plumbing and Heating distribution divisions was
particularly strong relative to the market.  Good trading margin (percentage of
operating profit, before goodwill amortisation, to sales) improvements were
achieved in the group's US and continental European plumbing and heating
distribution operations.



On a constant currency basis, group sales increased by 7.2% and operating
profit, before goodwill amortisation, by 6.0%.  Currency translation has had a
significant impact on the group's reported sterling results for the half year
compared to the corresponding period in the previous year, reducing group sales
by #212.9 million, (5.4%) and group operating profit, before goodwill
amortisation, by #10.7 million (5.1%).  The effect of US dollar depreciation has
been to reduce translated US profits by 8.6% for the first half of the year
compared to 2002.  US dollar denominated profits account for nearly 60% of the
group's first half operating profit.  Whilst the strengthening of the Euro has
partly mitigated the currency effect, Euro denominated profits account for just
under 11% of group operating profit in the first half.



After taking account of currency translation, group sales increased by 1.4% from
#3,911 million to #3,964 million.  Operating profit before goodwill amortisation
rose by 0.7% from #210.9 million to #212.3 million.  After deducting goodwill
amortisation of #14.0 million (2002: #12.7 million), the reported sterling
operating profit increased marginally from #198.2 million to #198.3 million.
The 2002 half year figures included one off property profits of #5.6 million
(2003: #0.3 million).   The net impact of these property profits  affects the
year on year operating profit comparison by 2.5%.



Net interest payable was reduced to #11.2 million (2002: #15.0 million),
reflecting lower interest rates and a further reduction in the working capital
to sales ratio of the group.  Interest cover is over 17 times (2002: 13 times).



Profit before tax and goodwill amortisation increased by 2.7% from #195.9
million to #201.1 million.  The increase in earnings per share before goodwill
amortisation  was 2.4%.



European Distribution



The UK market remained relatively strong throughout the first half whereas
markets in continental Europe were broadly flat.



Sales for the division increased by 12.5% from #1,242.7 million to #1,397.8
million. The organic increase in sales was 4.4%.  Operating profit before
goodwill amortisation rose by 3.4% from #78.9 million to #81.6 million.



The divisional trading margin reduced from 6.3% to 5.8% of sales, primarily due
to a short term reduction in the UK trading margin and the effect of one off
property gains in 2002.



Whilst UK housing starts were  only marginally up on last year, demand in the
repairs, maintenance and improvement sector was strong.  The expected benefit to
the market from increased government spending has not yet materialised to any
significant extent but this should start to feed through over the remainder of
this calendar year.  UK sales increased by 10.2% to #918.9 million, including
organic growth of 5.7%, with lightside the strongest performer.



The move to two new distribution centres during the course of last year and the
first half of this year had the expected adverse impact on costs (including
one-off costs of #1.6m).  The significance of these investments will be
reflected in future trading, both in terms of supporting continued growth and in
the generation of further operational efficiencies. This should result in a
year-end trading margin similar to that of last year and with the prospect of
margin improvement in future years.  Each of the four divisions matched, or
improved, their gross margins compared to the first half of last year.  After
adjusting for the unusual items affecting the first half, the underlying trading
margin performance remains strong.



The French construction market was flat during the first half, although the
heating segment improved from the autumn onwards.  High levels of unemployment
in France continue to have a negative impact on consumer confidence.  Local
currency sales were marginally down on the corresponding period last year.  An
improvement in the gross margin, despite continued pressure on prices, helped to
achieve a small improvement in local currency operating profit before goodwill
amortisation and an increase in the trading margin from 5.5% to 5.6%.  Brossette
is continuing with its programme of re-organising its distribution network and
has recently increased its product range to include some complementary
additional electrical products.



The group's other continental European operations made good progress and
improved their trading margins, despite uninspiring markets. In OAG, sales
increased by over 3% and  operating profit, before goodwill amortisation, by
over 4%.  Good progress is being achieved in Hungary with sales up 23%,  and a
new central distribution centre opened.  In Italy, the performance of the
recently opened satellite locations is encouraging and Manzardo increased sales
by nearly 15% and operating  profit, before goodwill amortisation, by over 64%.
CFM, in Luxembourg, increased sales by just over 2% and operating profit, before
goodwill amortisation, by more  than 34%.  Wasco, in the Netherlands, is showing
the expected upward trend in sales and profits as it implements its plan to
expand the product range and to develop its offering to the more profitable RMI
market.



The group continues to identify acquisition opportunities, both in existing and
new European territories, to create new platforms for organic growth.  A new
European management and organisation structure has been developed to  facilitate
  expansion of  Wolseley's European operations.



The division added a further 68 branches, including 55 additional branches in
the UK, to its European network, giving a total of 1,867 locations at 31 January
2003.



North American Plumbing and Heating Distribution



Business conditions for the group's North American Plumbing and Heating
Distribution operations continued to vary both geographically and by market
segment.  Despite this, both the US and Canadian businesses increased market
share and showed strong sales and profit growth in local currency terms.



Due to the adverse impact of currency translation, sales of the division were
down by  1.5% from #1,754 million to #1,728 million.  However, due to strong
organic profit growth, operating profit before goodwill amortisation increased
by nearly 7% from #89.9 million to #96.1 million.



Currency translation reduced divisional sales by #148.4 million (8.5%) and
operating profit, before goodwill amortisation, by #7.7 million (8.6%).



Local currency sales in the US  rose by 7.0% (including 1.0% organic), and in
Canada by 13.5% (including 8.1% organic).



Local currency operating  profit, before goodwill amortisation, for the US
plumbing operations increased by 23.4% reflecting strong cost control and an
increase in the gross margin due to continuing benefits from the distribution
centre network.  The trading margin, at 5.8%, showed a strong increase on the
previous year's margin of 5.1%.  This upward trend is consistent with the
achievement of the 6% trading margin objective a year ahead of schedule.  Local
currency operating profit, before goodwill amortisation, in Canada rose by 9.0%.



The US residential and remodelling markets held up well, but the industrial and
commercial sector remained soft throughout the first half. Southern California
was the strongest market whilst the weakest markets were in the northwestern
region of the USA, together with those parts of Florida affected by the downturn
in leisure and tourism.



The US plumbing operations are continuing to derive benefits from the
integration of Familian Northwest and Westburne USA  into Ferguson to form one
cohesive unit with a single market focus.  The integration of Familian Northwest
is expected to be fully complete by 31 January 2004.  The recent $110 million
acquisition of Clayton has now  been fully integrated into the waterworks
business of Ferguson and is performing ahead of expectations.



The Canadian residential market was particularly buoyant throughout the first
half, enabling Wolseley Canada to produce strong organic sales growth.  Its
drive for increased market share, together with the effect of integrating
acquisitions, resulted in a small decrease in the trading margin in the first
half but this trend is expected to be reversed in the second half.  British
Columbia continues to be Wolseley Canada's weakest region, but management action
is resulting in improvements in profitability.



The US and Canadian businesses will continue to seek value enhancing
acquisitions to expand market share and widen the product range.



There was a net increase of seven branches in North American Plumbing and
Heating Distribution from 924 to 931 locations at 31 January 2003.





US Building Materials Distribution



Principally due to the adverse impact of currency translation, sales for the
division reduced by #75.3 million (8.2%) from #913.8 million to #838.5 million.
Operating profit, before goodwill amortisation, reduced by #7.5 million (17.8%)
from #42.1 million to #34.6 million.  Currency translation reduced sales by
#78.4 million (8.6%) and operating profit, before goodwill amortisation, by #3.7
million (8.8%).



The overall level of new residential housing, which typically accounts for
around 90% of the activity in this division, remains strong at around 1.6
million starts.  However, there continues to be significant variations in the
strength of regional housing markets and a recent short-term trend towards lower
value housing.  There are no signs of any significant tailing off in US housing
demand.  The long-term fundamental drivers of this demand, in terms of
population growth, immigration, ageing population and more single family
housing, are positive.





The inventory of unsold homes at around four months, compared to the longer term
average of around six months, further demonstrates the overall strength of the
housing market.



Lumber prices, which directly affect around 40% of the division's product range,
continue to be adversely affected by excess global capacity of this commodity.
Average random length prices for the half year were $277  which is 6.4% below
the average of $296  for the corresponding period last year.  This had the
effect of reducing sales by $30 million (2.2%).



Both local currency sales and like for like sales volumes showed marginal
increases on the first half of last year.  Closed branches, following the
reorganisation of operations in Utah and Idaho reduced sales by a further $29
million (2.2%).  This reorganisation has already resulted in improved
profitability in this region and further benefits are expected in the second
half.  The incremental impact of acquisitions added $37 million (2.8%) of sales
in the first half.



An increase in the gross margin partly mitigated the effect of reduced lumber
prices but the local currency operating profit was marginally down on the first
half of last year.



The strongest regional housing markets were on the west coast of the USA whilst
the weakest were in the mid west, Georgia and the Raleigh research triangle.
Texas, a weak market in the prior year, has recently shown an improvement.



The group is committed to restoring the rate of growth in sales and
profitability in Stock Building Supply.  There are significant opportunities
available to the group in the rapidly changing US building materials market in
which Stock Building Supply has a relatively small market share.



The trend of consolidation amongst the larger homebuilders is likely to continue
and there is an increasing demand from customers for the supply of a wider range
of products including "value added"  products and services. Stock Building
Supply  is in the process of adjusting its management structure and approach in
response to these changes in the market to take better advantage of its size,
technology and acquisition opportunities.  The new structure should lead to
reduced cost, increased growth and improved profitability.  The benefits of this
reorganisation will begin to materialise towards the end of this financial year.
  Any one-off costs are not expected to be significant.  Cost savings in the
next financial year are expected to be around $5 million and at least $10
million per annum, thereafter.



A customer targeting initiative has recently resulted in the first joint sales
by Stock Building Supply and Ferguson to single customers and a joint showroom
is currently in the process of development.  Further opportunities for synergies
and cost saving initiatives between the two businesses will continue to be
exploited.



There was a net increase of six locations in the division during the first half
to bring the total to 222 as at 31 January 2003.





Senior Management Changes



Andrew Hutton, Chief Executive of Wolseley Centers and Building Distribution
Northern Europe will retire with effect from 31 July 2003, after some nine years
on the board.  Andrew has played a significant role in growing Wolseley's UK
business to achieve UK market leadership whilst successfully developing
Wolseley's presence in Northern Europe.



Adrian Barden, currently Managing Director of Wolseley's UK heavyside division,
will be appointed as Managing Director of Wolseley Centers with effect from 1
August 2003.  The responsibility for Building Distribution Northern Europe will
pass to the Director Europe who is being actively recruited.  The Director
Europe will be responsible for all of Wolseley's European operations with the
primary objectives of increasing synergies and accelerating growth in the
group's European division.





Interim dividend



The board has decided to pay an interim dividend of 5.60 pence per share, which
represents an increase of 12% on last year's 5.00 pence interim dividend.  This
increase reflects the board's confidence in the future development of the group
and its strong financial position.  The dividend reinvestment plan will continue
to be available to eligible shareholders.



Finance



The effective tax rate is unchanged from the rate of 28% for the half year to 31
January 2003.  It is expected that 28% will be the effective tax rate for the
full year and for at least the next two financial years, provided the
geographical contributions to profits remain broadly similar and there are no
significant changes to tax legislation.



Net cash flow from operating activities reduced by #40.6 million (15.6%) from
#259.7 million to #219.1 million, due to selective inventory build ups to gain
competitive advantage, payments to suppliers to secure additional payment
discounts in the US plumbing business and the translation effect of a weaker
dollar on the cash flows of the US businesses.  The working capital to sales
ratio continues to show an improving trend at 15.8% for the six months to 31
January 2003 compared to 16.3% in the comparable period.



Consideration for acquisitions, including debt, amounted to just under #58
million (2002: #14 million).  One additional acquisition, for a consideration of
#6 million, has been completed in the UK since 31 January 2003.  Further
acquisition opportunities are currently under review.  The group's average spend
on bolt-on acquisitions is expected to remain in the region of #200 million per
annum.



The group's branch network during the first half has been extended through
acquisitions and branch openings by a net total of 81 (2.8%), bringing the total
to 3,020 at 31 January 2003.



Net borrowings, excluding construction loan borrowings, at 31 January 2003
amounted to #570.1 million compared to #545.6 million at 31 July 2002, giving
gearing of 34.6% compared to 34.1% at the previous year-end and 39.3% at 31
January 2002.



Construction loan receivables, financed by an equivalent amount of construction
loan borrowings, were #160.8 million compared to #171.4 million at 31 July 2002.
  The reduction is partly due to the weaker US dollar but also reflects a
planned reduction in the portfolio to reflect the more challenging  market
conditions.



There has been no significant change since the position reported at 31 July 2002
concerning asbestos claims.  As stated then, the estimated liability, which is
fully covered by insurance, is not material to the group's financial position.
Insurance cover significantly exceeds the estimated liability and is a multiple
thereof.  There has been no profit and loss account charge in this, or any prior
financial year, relating to asbestos claims and no such charge is expected to
arise in the future.



Outlook



There is no current evidence of a significant downturn in activity levels in the
group's businesses.  However, current global economic and political
uncertainties are likely to continue to affect the group's markets in the short
term.



The UK market is expected to hold up well with low interest rates helping demand
for RMI with increasing benefits arising from government spending.  UK trading
margins are expected to recover in the second half.



Continental European markets are likely to remain flat, but the group expects a
continuation of the trend seen in the first half of modest sales growth and
improved levels of profitability.



US housing demand is expected to remain strong through to the financial year end
unless there are significant increases in levels of unemployment over the next
few months.  However, regional variations are likely to continue.  The benign
interest rate environment is unlikely to change in the short term and the
positive fundamental drivers of demand should help to underpin the
sustainability of the housing market.  Activity in the remodelling sector is
likely to be boosted by the positive impact on RMI from the tendency for more
Americans to stay at home.  Whilst there are early signs of a resurgence in
enquiries in the industrial and commercial sector, the long lead time in this
sector means that it is unlikely that there will be an upturn until some time
after the end of the financial year.



The outlook in Canada is positive.



The group's businesses are well placed to further improve their market positions
in the second half.  Group management will continue to focus on tight cost
control, margin enhancement and exploiting growth opportunities.



Group Profit and Loss Account (unaudited)




                                                                               Half year to     Half year to
                                                                                 31 January       31 January
                                                                                       2003             2002

         Year to
    31 July 2002
              #m                                                                         #m               #m
                     Turnover

7,967.6              Continuing operations                                    3,942.9           3,910.5
-                    Acquisitions                                             21.2              -
7,967.6                                                                       3,964.1           3,910.5

                     Operating profit before goodwill 
463.9                amortisation (note 3)                                    212.3             210.9

(26.7)               Goodwill amortisation                                    (14.0)            (12.7)

                     Operating profit
437.2                Continuing operations                                    197.2             198.2
-                    Acquisitions                                             1.1               -

437.2                Profit on ordinary activities before interest            198.3             198.2
(26.5)               Net interest payable                                     (11.2)            (15.0)
410.7                Profit on ordinary activities before tax                 187.1             183.2
                     Taxation (note 4)
(108.1)              Current tax charge                                       (55.6)            (52.9)
(14.4)               Deferred tax charge                                      (0.7)             (1.9)
(122.5)                                                                       (56.3)            (54.8)
                     Profit for the period attributable to ordinary
288.2                shareholders                                             130.8             128.4
(109.2)              Dividends                                                (32.4)            (28.9)

179.0                Profit retained                                          98.4              99.5

                     Earnings per share (note 5)
54.58p               Before exceptionals and goodwill amortisation            25.05p            24.46p
(4.62)p              Goodwill amortisation                                    (2.41)p          (2.20)p
49.96p               Basic earnings per share                                 22.64p            22.26p

49.46p               Diluted earnings per share                               22.54p            22.17p
18.90p               Dividends per share (note 6)                             5.60p             5.00p
                     Translation rates (note 1)
1.4569               US dollars                                               1.5807            1.4450
1.6085               Euro                                                     1.5674            1.6200


Statement of Total Recognised Gains and Losses
                                                                               Half Year           Half Year
                                                                                      to                  to
                                                                              31 January                  31
           Year to                                                                  2003             January
      31 July 2002                                                                                      2002
                #m                                                                    #m                  #m

            288.2      Profit for the period                               130.8             128.4

                       Currency translation difference on foreign
            (84.3)     investments                                         (55.1)            9.5
            203.9      Total recognised gains and losses for the financial 75.7              137.9
                       year


Summarised Balance Sheets (unaudited)
                                                                                     As at            As at
                                                                                31 January       31 January
             As at                                                                    2003             2002
      31 July 2002
                #m                                                                      #m               #m

            502.7      Intangible fixed assets                                497.1            467.8
            582.1      Tangible fixed assets                                  575.9            596.8
         1,084.8                                                              1,073.0          1,064.6
         1,050.9       Stocks                                                 1,033.8          1,025.4
         1,372.7       Debtors and property awaiting disposal                 1,227.8          1,237.9
            171.4      Construction loans receivable (secured)                160.8            196.1
       (1,119.6)       Creditors                                              (921.8)          (917.7)
          (171.4)      Construction loan borrowings (unsecured)               (160.8)          (196.1)
         1,304.0       Net Operating Assets                                   1,339.8          1,345.6
          (545.6)      Net group borrowings                                   (570.1)          (632.9)
            (46.0)     Net liabilities for tax                                (42.4)           (52.6)
            (80.3)     Dividend                                               (32.4)           (28.9)
          (117.0)      Provisions for liabilities and charges                 (119.2)          (85.9)
         1,599.9       Total Net Assets                                       1,648.7          1,609.9
            313.6      Capital and share premium account                      319.1            309.2
         1,286.3       Reserves                                               1,329.6          1,300.7
         1,599.9       Shareholders' Funds                                    1,648.7          1,609.9
                       Translation rates (note 1)
          1.5622       US Dollars                                             1.6478           1.4133
          1.5934       Euro                                                   1.5303           1.6416


Reconciliation of Movements in Capital and Reserves

                                                                                Half year to     Half year to
                                                                                  31 January       31 January
                                                                                        2003             2002
          Year to
     31 July 2002
               #m                                                                         #m               #m

            179.0     Profit retained                                                   98.4           99.5
            (84.3)    Other recognised gains and losses                               (55.1)           9.5
              7.6     New share capital subscribed                                       5.5           3.2
              1.2     Goodwill written back                                                -           1.3
            103.5     Net addition to shareholders' funds                             48.8             113.5
          1,496.4     Opening shareholders' funds                                     1,599.9          1,496.4
          1,599.9     Closing shareholders' funds                                     1,648.7          1,609.9


Summarised Group Cash Flow Statement

                                                                                 Half year to     Half year to
                                                                                   31 January       31 January
                                                                                         2003             2002
          Year to
     31 July 2002
               #m                                                                          #m               #m

584.1                 Net Cash Flow from Operating Activities*                  219.1             259.7
                      Net cash outflow from returns on investments and
(22.5)                servicing of finance                                      (15.5)            (11.7)
(119.6)               Taxation paid                                             (58.3)            (58.6)
(96.8)                Capital expenditure                                       (41.2)            (50.0)
(169.9)               Acquisitions                                              (56.6)            (20.9)
8.2                   Disposals                                                 0.5               8.2
(100.1)               Equity dividends paid                                     (80.3)            (71.2)
-                     Management of liquid resources and financing              (11.7)            -
7.6                   Financing - Issue of shares                               5.5               3.2
                      Change in net debt resulting from
91.0                  cash flows                                                (38.5)            58.7
(2.6)                 New finance leases                                        (2.1)             (2.4)
59.7                  Translation difference                                    16.1              4.5
148.1                 Movement in net debt in period                            (24.5)            60.8
(693.7)               Opening net debt                                          (545.6)           (693.7)
(545.6)               Closing net debt                                          (570.1)           (632.9)


* Reconciliation of the Operating Profit to Net Cash Flow from Operating
Activities

                                                                                 Half year to     Half year to
                                                                                   31 January       31 January
                                                                                         2003             2002
          Year to
     31 July 2002
               #m                                                                          #m               #m

437.2                 Operating profit                                          198.3             198.2
92.5                  Depreciation charges                                      43.0              45.4
26.7                  Goodwill amortisation                                     14.0              12.7
7.4                   Decrease in stocks                                        3.7               69.4
(24.0)                Decrease/(Increase) in debtors                            98.4              129.1
44.0                  (Decrease)/Increase in creditors and provisions           (138.3)           (195.4)
0.3                   Decrease in net construction loans                        -                 0.3  
584.1                 Net cash flow from operating activities                   219.1             259.7


Analysis of Results

Turnover by Activity

                                                                                 Half year to     Half year to
                                                                                   31 January       31 January
                                                                                         2003             2002
          Year to
     31 July 2002
               #m                                                                          #m               #m

                      European Distribution
2,517.5                  Continuing operations                                  1,385.0           1,242.7
                -        Acquisitions                                           12.8              -
2,517.5                                                                         1,397.8           1,242.7
                      North American Plumbing & Heating Distribution
3,592.4                  Continuing operations                                  1,727.8           1,754.0
                -        Acquisitions                                           -                 -
3,592.4                                                                         1,727.8           1,754.0
                      US Building Materials Distribution
1,857.7                  Continuing operations                                  830.1             913.8
-                        Acquisitions                                           8.4               -
1,857.7                                                                         838.5             913.8
7,967.6               Group Total                                               3,964.1           3,910.5


Operating Profit Before Goodwill Amortisation by Activity

                                                                                 Half year to     Half year to
                                                                                   31 January       31 January
                                                                                         2003             2002
          Year to                                                                          #m               #m
     31 July 2002
               #m

                      European Distribution
171.4                    Continuing operations                                        81.8              78.9
                -        Acquisitions                                                 (0.2)             -
171.4                                                                                 81.6              78.9
                      North American Plumbing & Heating Distribution
200.7                    Continuing operations                                        96.1              89.9
                -        Acquisitions                                                    -              -
200.7                                                                                 96.1              89.9
                      US Building Materials Distribution
91.8                     Continuing operations                                        33.2              42.1
                -        Acquisitions                                                 1.4                -
91.8                                                                                  34.6              42.1
463.9                 Group Total                                                     212.3             210.9


Analysis of Movement in Sales


                                             New    Acquisitions
                                    Acquisitions       Increment      Organic Change              2003
                     2002  Exchange         2003            2002
                       #m        #m          #m              #m              #m       %            #m


European
Distribution     1,242.7     13.9          12.8            72.5            55.9      4.4            1,397.8
                                                                                                    
North American
Plumbing &
Heating
Distribution     1,754.0     (148.4)        -               95.4            26.8      1.7            1,727.8
                                                                                                     

US Building
Materials
Distribution     913.8       (78.4)        8.4             15.1            (20.4)    (2.4)          838.5
                                                                                                    

                 3,910.5     (212.9)       21.2            183.0           62.3      1.7            3,964.1
                                                                                                    

Analysis of Movement in Operating Profit, Before Goodwill Amortisation


                                                        New   Acquisitions
                                               Acquisitions      Increment
                        2002  Exchange             2003           2002        Organic Change          2003
                          #m       #m               #m             #m         #m          %            #m

European
Distribution            78.9      0.7            (0.2)            2.5         (0.3)     (0.4)         81.6
                        

North American
Plumbing &
Heating
Distribution            89.9    (7.7)               -             7.0          6.9        8.4        96.1

US
Building
Materials
Distribution           42.1    (3.7)              1.4             0.4         (5.6)       (14.6)      34.6


                      210.9   (10.7)              1.2             9.9          1.0         0.5        212.3



Goodwill of #0.1 million arises on the acquisitions made in the half year.  The
operating profit contribution, after goodwill amortisation, from these
acquisitions is #1.1 million.


Notes



1.                  Basis of preparation



The figures for the year ended 31 July 2002 do not constitute the company's
statutory accounts for that period  but have been extracted from the statutory
accounts, which have been filed with the Registrar of Companies.  The auditors
have reported on those accounts; their reports were unqualified and did not
contain statements under Section 237(2) or (3) of the Companies Act 1985.  The
accounts for the six months ended 31 January 2003 have not been audited, nor
were the accounts for the equivalent period in 2002.  They comply with relevant
accounting standards and have been prepared on a consistent basis using
accounting policies set out in the 2002 Annual Report.



The results of overseas subsidiaries have been translated into sterling using
average rates of exchange.  The period end rates of exchange have been used to
convert balance sheet amounts.




2.         Geographical analysis of sales


                                                                 Half year to            Half year
                                                                   31 January                   to
                                                                         2003           31 January
                                                                                              2002
                                                                           #m                   #m
European Distribution
UK                                                                      918.9                834.2
France                                                                  278.1                270.3
Other                                                                   200.8                138.2
                                                                      1,397.8              1,242.7
North America Plumbing and Heating Distribution
USA                                                                   1,544.7              1,578.7
Canada                                                                  183.1                175.3
                                                                      1,727.8              1,754.0

US Building Materials Distribution
USA                                                                     838.5                913.8

Group Total                                                           3,964.1              3,910.5



3.         Operating profit



Operating profit includes #0.3 million (2002: #5.6 million) of property profits
and losses of #0.9 million relating to the sale of a branch in US Plumbing and
Heating Distribution.  One-off costs relating to the integration of the
Westburne and Clayton acquisitions amounted to #0.8 million (2002: #0.9
million).





4.                  Taxation



The tax charge on ordinary activities for the half year has been calculated at
the rate which it is expected will apply for the year ending 31 July 2003 and
comprises the following elements:




                                                                      Half year     Half year to
                                                                             to  31 January 2002
                                                                             31
                                                                   January 2003
                                                                             #m               #m
Tax on profit for the period
- UK                                                                       12.6             16.5
- overseas                                                                 43.0             36.4
                                                                           55.6             52.9
Deferred tax                                                                0.7              1.9
                                                                           56.3             54.8



5.                  Earnings per share



Earnings per share, calculated on an average of 578.1 million (2002: 576.6
million) ordinary shares in issue, is as follows:




                                                     Half Year to  Half Year to
                                                       31 January    31 January
                                                             2003          2002
                                                        Pence per     Pence per
                                                            share         share

Before goodwill amortisation                                25.05         24.46
Goodwill amortisation                                       (2.41)        (2.20)
Basic earnings per share                                    22.64         22.26



6.                  Interim Dividend



The interim dividend of 5.60 pence (2002: 5.00 pence) per share, which will
absorb #32.4 million (2002: #28.9 million), will be paid on Thursday 31 July
2003 to ordinary shareholders on the register on Friday 4 July 2003.  The shares
will be quoted ex dividend on Wednesday 2 July 2003.





7.         Acquisitions



The following table summarises the acquisitions made during the half year.  In
certain cases the consideration is subject to adjustment and includes net
borrowings acquired.


                                                  Estimated           Expected
                                                               contribution to
                                              consideration  group turnover in
                                             including debt        a full year


Acquisitions
                                                         #m                 #m

European Distribution                                  14.5               35.0
NA Plumbing and Heating Distribution                    9.0               31.2
US Building Materials Distribution                     34.1               95.1
                                                       57.6              161.3



8.                  Pensions and other post retirement  benefits



Note 33 to the group's 2002 Annual Report & Accounts summarised the position as
at 31 July 2002 in relation to pension liabilities on an FRS 17 basis.  At that
date the pension deficit, net of taxation, amounted to #89.7 million of which
#29.3 million net of the related deferred tax asset was provided in the balance
sheet.  Accordingly, had FRS 17 been fully adopted at 31 July 2002,
shareholders' funds would have been reduced by #60.4 million.



9.                  Copies of announcements

Wolseley plc will mail a copy of the interim report to shareholders for the six
months ended 31 January 2003.  Requests for a copy of this report should be
addressed to  Corporate Communications, Wolseley plc, Parkview 1220, Arlington
Business Park, Theale, Reading RG7 4GA.



A copy of the 2003 Interim Announcement, together with copies of other recent
public announcements, including the 2002 Preliminary Announcement, can be found
on Wolseley's web site at www.wolseley.com.  Copies of the Interim and
Preliminary Announcement presentations given to stockbrokers' analysts are also
available on that site.



10.       Electronic Communications

Recent changes in the law mean that the company may now send shareholder
information, including Annual Reports, Notices of General Meetings and Forms of
Proxy to you electronically, provided only that you agree to receive them in
this format.



This will have a number of advantages, including:

*  Speedier delivery of documents;

*  Cost savings for the company on the delivery of documents;

*  Saving on environmental resources;

*  Confirmation of receipt of proxy appointments.



To receive your shareholder documentation electronically, you will need to
register with our Registrars' online service, www.shareview.co.uk.  This is a
secure service enabling shareholders to set up and view personal shareholding
details.  When you register please have your shareholder reference number to
hand, this is on your share certificate or the enclosed proxy form.



The next opportunity for us to notify you electronically will be in respect of
the Annual Report for 2003, which will be published in the Autumn.  If you have
registered, an e-mail will be sent to you notifying you that it has been
published on our website and including a link to the relevant page.  A similar
procedure will be followed for future shareholder documentation.  There are no
particular software requirements to view these documents, other than those
described and available on our website www.wolseley.com.



Shareholders wishing to continue to receive shareholder information in the
traditional paper format should take no action.



This offer, and provision of a facility to communicate with shareholders
electronically, does not discriminate between registered shareholders of the
same class.  It is available to all registered shareholders on equal terms and
participation is made as simple as possible.  Please note that it is the
shareholder's responsibility to notify our Registrars through
www.shareview.co.uk of any change to their e-mail address.



Before electing for electronic communication, shareholders should ensure that
they have the appropriate computer capabilities.  The company takes all
reasonable precautions to ensure no viruses are present in any communication it
sends out, but cannot accept any responsibility for loss or damage arising from
the opening or use of any e-mail or attachments from the company and recommends
that shareholders subject all messages to virus checking procedures prior to
use.  Please note that any electronic communication sent by a shareholder to the
company or the Registrar containing a computer virus will not be accepted.





The company's obligation is satisfied when it transmits an electronic message.
It cannot be held responsible for a failure in transmission beyond its control.
In the event that the company becomes aware that an electronic transmission is
not successfully transmitted, a paper notification will be sent to the
shareholder at their registered address.  The company also reserves the right,
irrespective of your election, to revert to sending paper documentation by post,
whenever the Board considers it necessary or desirable to do so.



If you have any further questions, please contact our Registrars, Lloyds TSB
Registrars on 0870 6003970.








Independent review report to Wolseley plc

Introduction



We have been instructed by the company to review the financial information,
which comprises the profit and loss account, the balance sheet, the cash flow
statement, the statement of total recognised gains and losses and the related
notes. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.



Directors' responsibilities



The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed



We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
the Listing Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.



Review conclusion



On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 January 2003.



PricewaterhouseCoopers

Chartered Accountants

Birmingham

17 March 2003



Notes:



   (a)            The maintenance and integrity of the Wolseley website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the interim report
since it was initially presented on the website.



   (b)            Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from legislation in other
jurisdictions.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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