Wolseley plc 
Annual report and accounts 2002
1 Financial highlights
2 20 years of sustained growth
3 Chairman’s statement
4 Group Chief Executive’s review
16 Our people in the community
18 Operating and financial review
28 Our directors
31 Report of the directors
33 Corporate governance
40 Remuneration
45 Group profit and loss account
46 Balance sheets
47 Group cash flow statement
47 Group statement of total recognised
gains and losses
48 Accounting policies
50 Notes to the accounts
73 Auditors’ report
74 Principal subsidiaries and undertakings
76 Acquisitions
77 Five year summary
79 Group information
Contents
The group has established itself as the
world’s number one distributor of heating
and plumbing products and is a leading
supplier of builders’ products to the
professional market. Wolseley is an
international business, operating nearly
3,000 branches, in 12 countries in Europe
and North America, employing some
38,000 people. The group’s strength 
is to operate strong national businesses 
in home markets, retain local brand
superiority and continually exceed
customer expectations through wider
product ranges and superior service.
Wolseley plc 
Parkview 1220
Arlington Business Park
Theale
Reading
RG7 4GA
United Kingdom
Telephone: +44 (0) 118 929 8700
Fax: +44 (0) 118 929 8701
www.wolseley.com
Wolseley plc Annual report and accounts 2002 Wolseley plc Annual report and accounts 2002
Group Sales 
£8bn
Up10.7%
Since it started in Birmingham in 1889, the company 
has evolved and grown into an international group
operating in 12 countries. Today it is a constituent of the
FTSE 100 index and in the USA it is listed on the NYSE.
The group now employs some 38,000 people in 12
countries around the world. It prides itself on being the
world’s number one distributor of heating and plumbing
products and a leading supplier of builders’ products 
to the professional market. 
Wolseley Centers in the UK has four divisions. The
Lightside division is best known for Plumb Center, but also
has brands such as Drainage Center, Just Bathrooms and
Broughton Crangrove. It supplies plumbing, heating and
drainage equipment to the professional trade. The Heavyside
division trades as Builder Center, Hire Center and Timber
Center and services the building and professional trades.
Pipeline Center, Controls Center and NRS (air-
conditioning and refrigeration) make up the Commercial
and Industrial division. The Spares division trades as HRPC
and Wash-Vac Services providing heating spare parts and
spares for the white goods industry as well as controls 
for central heating and catering equipment.
In Mainland Europe Brossette is the number one
supplier in France, distributing plumbing and heating
equipment, underground drainage products, pipes, valves
and fittings to the professional contractor and public
authority market. Other companies include OAG 
in Austria, a leader in its market, Heatmerchants in 
Ireland, Manzardo Spa in Italy, CFM in Luxembourg,
Cesaro in Czech Republic, Mart in Hungary, Wasco 
in The Netherlands and Electro-oil in Denmark. 
Ferguson Enterprises is the number one wholesale
distributor of plumbing, heating and piping, valves and
fitting products to professional contractors and industry 
in the USA. It also operates a network of bathroom and
kitchen showrooms. The 725 locations are in 48 states in
the USA and Puerto Rico. In addition to Ferguson, its
main brands include Familian Northwest and Westburne.
Wolseley Canada (formerly Westburne) is number two
in its market, distributing plumbing, heating, ventilation
and air-conditioning, engineered pipes, waterworks and 
fire protection products. It has 199 branches 
throughout Canada.
Stock Building Supply, (formerly known as Carolina
Holdings), supplies lumber and building materials 
as well as value added services to the house builder and
professional contractor. It has 216 branches in 
24 US states.
The group
European Distribution
North American
Plumbing and Heating
Distribution
US Building Materials
Distribution
Description Operational highlights Number of outlets
Business overview
2,939
924
1 ,799
216
European Distribution 31.6%
(Increase 6.2%)
European Distribution 36.9%
(Increase 8.3%)
Sales Operating proﬁt
Sales Operating proﬁt
North American Plumbing  
& Heating 45.1%
(Increase 19.7%)
North American Plumbing  
& Heating 43.3%
(Increase 29.1%)
Sales Operating proﬁt
US Building Materials 23.3% 
(Increase 5.0%)
US Building Materials 19.8% 
(Down 5.2%) Wolseley plc 
Annual report and accounts 2002
1 Financial highlights
2 20 years of sustained growth
3 Chairman’s statement
4 Group Chief Executive’s review
16 Our people in the community
18 Operating and financial review
28 Our directors
31 Report of the directors
33 Corporate governance
40 Remuneration
45 Group profit and loss account
46 Balance sheets
47 Group cash flow statement
47 Group statement of total recognised
gains and losses
48 Accounting policies
50 Notes to the accounts
73 Auditors’ report
74 Principal subsidiaries and undertakings
76 Acquisitions
77 Five year summary
79 Group information
Contents
The group has established itself as the
world’s number one distributor of heating
and plumbing products and is a leading
supplier of builders’ products to the
professional market. Wolseley is an
international business, operating nearly
3,000 branches, in 12 countries in Europe
and North America, employing some
38,000 people. The group’s strength 
is to operate strong national businesses 
in home markets, retain local brand
superiority and continually exceed
customer expectations through wider
product ranges and superior service.
Wolseley plc 
Parkview 1220
Arlington Business Park
Theale
Reading
RG7 4GA
United Kingdom
Telephone: +44 (0) 118 929 8700
Fax: +44 (0) 118 929 8701
www.wolseley.com
Wolseley plc Annual report and accounts 2002 1 Wolseley plc Annual report and accounts 2002
Financial highlights
Group sales up 10.7% to £8.0 billion (2001: £7 .2 billion), with continuing 
activities* up 11.6%
Group operating proﬁt before goodwill amortisation up 12.0% to 
£463.9 million (2001: £414.2 million) with continuing activities* up 13.0%
Group pre-tax proﬁt before exceptionals and goodwill amortisation up 
15.4% to £437.4 million (2001: £379.0 million)
Earnings per share before exceptionals and goodwill amortisation up 
15.1% to 54.6 pence (2001: 47.4 pence)
Cash ﬂow from operating activities up 12.8% to £584.1 million, contributing to 
year-end gearing of 34.1% (2001: 46.4%) and reducing borrowings by £148.1 million.
Interest cover is 16 times (2001: 11 times)
Reduction in working capital of £27.7 million helps the strong operating 
cash flow performance
Return on capital up from 16.5% to 16.7%
Final dividend up by 12.6% giving an increase in total dividends for the year 
of 11.8% to 18.9 pence
* Continuing activities exclude the manufacturing operations, the last of which was disposed of in February 2001.
Operating highlights
Strong performances in the UK, US Plumbing and Austria
£160.3 million invested in acquisitions with a further £96.8 million 
on capital expenditure
Branch network extended by 193 branches (7.0%) to 2,939 at 31 July 2002 Earnings per share pence
32.70
38.08
41.79
47.43
54.58
 98 99 00 01 02
Dividend per share pence
12.50
13.75
15.35
16.90
18.90
 98 99 00 01 02
Outlets in 1982 Outlets in 2002
8000
6000
4000
2000
0
800
700
600
500
400
300
200
100
0
100
90
80
70
60
50
40
30
20
10
0
Sales
Trading
profit
ROC 
(as defined  
on page 78)
Sales, profit and return on capital
82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02
157; 2,939.
1 7 .7%
18.6%
Compound sales growth
over 20 years.
Compound trading proﬁt
growth over 20 years.
Sales £ million
Profits £ million
Percent
2 Wolseley plc Annual report and accounts 2002
20 years of sustained growth
The beneﬁts of the group’s geographic and product diversity 
and its resilience during varied business cycles is demonstrated 
by its outstanding record of growth over the last 20 years. 3 Wolseley plc Annual report and accounts 2002
continues to retain its position as the world’s
number one distributor of heating and
plumbing products and a leading supplier of
builders’ products to the professional market.
Dividends 
In line with the strong ﬁnancial performance
of the group, the board is recommending 
a ﬁnal dividend of 13.90 pence (2001: 12.35
pence), an increase of 12.6%. With the
interim dividend of 5.0 pence already paid,
total dividends for the year will amount to
18.90 pence per share, an increase of 11.8%
over dividends declared in respect of last year.
The dividend reinvestment plan continues 
to be available to shareholders.
Employees
As always, I would personally like to extend
my thanks to all our employees, without
whose contribution this excellent set of
results could not have been achieved. Over
the years I have had the honour of meeting
many of them whilst travelling around the
group. I continue to be impressed and
encouraged by the strong and efficient
international teams that make up the 38,000
employees in Wolseley. I would also like 
to welcome all the new employees who have
joined during the course of the year,
especially our Dutch colleagues from Wasco,
the specialist trade distributor of plumbing
and heating products and spares, which we
acquired in July this year.
The board
I started this Chairman’s statement by talking
about change and will now conclude by
Chairman’s statement
Continued ﬁnancial strength
We live in a fast changing world to which
business has to respond quickly or risk
failure. Last year we witnessed the terrible
and tragic events of September 11 and at 
that time, many faced an uncertain future.
Businesses also had to adapt to the new
commercial environment in which they 
found themselves.
Despite the major economic uncertainties
that followed, Wolseley proved its resilience
and produced record proﬁts for the sixth 
consecutive year. The Group Chief
Executive’s review and the Operating and
financial review set out in more detail how
these results were achieved and outline the
group strategy. These excellent results
reinforce my view that Wolseley, building 
on its strengths, has earned, deserves and
outlining the changes to the board which have
taken place this year. After 12 years of service
to the group, David Tucker retired as 
a non-executive director in April. On behalf
of the board, I would like to thank him 
for his dedication and valued contribution 
to the group’s affairs especially as Chairman 
of the Audit Committee. We welcomed 
Jim Murray, formerly Finance Director of
Land Securities PLC, to the board as a 
non-executive director. Jim is ideally suited 
to succeed David as Chairman of the 
Audit Committee.
Finally, and on a more personal note, I am
retiring as Chairman this year after 47 years
with Wolseley, with 27 of those years spent on
the board and the last six years as Chairman.
It is with mixed emotions that I write this
statement for the last time. During my time
with the group, I have watched it progress 
to become the major international building
materials, plumbing and heating distributor 
it is today. I am proud to have been involved
in that development. It is also a matter of
some pride that I leave the group in such
strong ﬁnancial shape and under the guidance
of an outstanding management team. In
April, it was announced that John Whybrow
would succeed me as non-executive Chairman
following my retirement immediately after
this year’s AGM. As well as thanking him for
his contribution as deputy Chairman I wish
him all success in his new role.
I know that I leave the group in excellent
shape and good heart and I wish it and all 
its people everywhere good fortune.
Richard Ireland
Chairman
These excellent results reinforce my view 
that Wolseley, through building on its
strengths, has earned, deserves and continues
to retain its position as the world’s number
one distributor of heating and plumbing
products and a leading supplier of builders’
products to the professional market. 4 Wolseley plc Annual report and accounts 2002
Group Chief Executive’s review
The group has performed strongly in its markets, 
despite challenging business conditions. This year’s 
results conﬁrm that we have been pursuing the right
strategy to deliver improving returns for our shareholders.
I see no reason to change that strategy and will continue
to build upon the solid foundation which Wolseley 
has ﬁrmly established. 
Driving the business 5 Wolseley plc Annual report and accounts 2002
It is always gratifying as Chief Executive to 
be able to report excellent results for the group,
especially in the economic environment
which followed the tragic events of
September 11, 2001.
However, before I outline the key points of
our strategy, I want to take this opportunity
to pay tribute to Richard Ireland, our
Chairman, who retires at the AGM this year,
after a long career with the group. Richard
joined the company in 1955 and over his 
47 years with Wolseley, he has risen through
the ranks, joining the board in 1975 as 
Group Finance Director, serving for 20 years
before retiring in 1994, when he became 
a non-executive director. In 1996, he became
non-executive Chairman. Following John
Young’s early retirement in June 2000, the
board were grateful when Richard stepped
into an executive Chairman role for almost 
a year, until I took up my post in May 2001. 
It is impossible to quantify the enormous
contribution that he has made to the 
group, guiding the business towards
international expansion and presiding over
the implementation and enforcement of
Wolseley’s conservative accounting legacy.
More recently he helped bring focus to
Wolseley with the decision to divest of its
manufacturing businesses. He hands over 
the group in excellent shape with ﬁrm plans
in place to continue to deliver the results that
shareholders expect. I would personally like
to thank him for his help and support over
the last year, and on behalf of the board, 
I wish him well in his retirement.
The strategic direction of the Wolseley group is key to its
future success. When I took up my post as Group Chief
Executive in May 2001, I said that we would:
Charles Banks
Group Chief Executive
forward
Grow through acquisition 
and organic expansion
Wolseley remains committed and focussed on distribution and continues to set itself the 
target of annual double digit growth in sales and earnings. Growth will come through 
a combination of both acquisitions and organic expansion.
Develop a European strategy
Europe is becoming one market. By managing the European Distribution division as 
a more cohesive European unit, Wolseley should achieve significant benefits and synergies 
and be better able to exploit market opportunities.
Leverage our international position
The business world is becoming increasingly global. Wolseley has a unique international
position and a great opportunity to take advantage of this globalisation. The group intends 
to leverage its international market presence to ensure it can continue to enhance 
the business.
Enhance business diversity
Wolseley has deﬁned itself as a distributor of construction materials with a current market focus
on North America and Europe. The diversity comes from a broad range of product, type of
customer, geography, value added opportunities for growth and increased investor returns.
and develop our people
Wolseley recognises that the continued success of the group depends on its people, their
development and commitment to the company. This will require a strategic emphasis 
on a continual programme of recruitment, training and development of top quality 
people at all levels. 6 Wolseley plc Annual report and accounts 2002
of acquisition spend compared to the 
average annual target of £200 million a year
reflected the uncertainties in the market 
in the immediate aftermath of the events 
of September 11. The group continues 
to seek acquisitions to expand all areas 
of its activities. 
In Europe, the £60.3 million of acquisitions
include the group’s ﬁrst entry into plumbing
and heating distribution in The Netherlands,
through the £36 million acquisition of Wasco
Group in July 2002, the leading heating
equipment and spares distributor in that
country. This acquisition will be used as 
a platform for expansion of the sanitaryware
business and the opening of new collect
centres to service smaller, professional
contractors. Wasco’s spares business will 
also be developed, utilising its recently
established 110,000 square feet spare parts
distribution facility. In the UK, Wolseley
expanded its plastic pipes distribution
business by acquiring 26 outlets from
Glynwed Pipe Systems for a consideration 
of £23 million.
Most of the £86.3 million acquisition activity
in North American Plumbing and Heating
Distribution related to the expansion of
Ferguson’s presence in the fast growing
waterworks market. Clayton, the fourth
largest distributor of waterworks, wastewater
and storm drainage material in the USA, was
acquired in April for £75 million. Clayton
operates from 31 branches in six states
(Florida, Louisiana, Texas, Arkansas, Georgia
and Mississippi) and one in each of Barbados
and Trinidad. The business has a particularly
strong market position in Florida which has 
Wolseley’s target remains double digit growth
in sales and earnings. This is a substantial
and challenging target, but one that creates
opportunities for our employees and our
investors. It is not unrealistic when you look
at the structure of our group and our
markets. We are in a very fragmented
industry and we look at our acquisitions as 
a way of expanding our product offering 
and our geographic presence to provide the
platform for future organic expansion. The
group broadly aims to spend £200 million 
on acquisitions each year, principally bolt-
on’s to existing businesses, but never ruling
out the opportunity for larger transactions
which could take us into new markets or
signiﬁcantly expand our market share in
existing markets. The level of acquisition
spend each year will vary in amount and 
by division as opportunities arise. The
Operating and financial review on page 24
gives more details of acquisitions.
The group sets rigorous acquisition criteria,
which, when met for a proposed acquisition,
are followed by a period of intensive due
diligence. There is no ideal balance to the
group’s geographic presence and neither the
US nor the European market is favoured.
Acquisitions arise as a combination of careful
targeting and opportunism. More investment
will be allocated in those geographic and
product areas, where the group needs to
strengthen its presence in order to be 
a major player in a market. 
During the year, 14 acquisitions were
completed for an aggregate consideration,
including debt, of £160.3 million (2001:
£399.6 million). The slightly lower level 
a high investment in the waterworks and
underground drainage sector. Wolseley’s
Canadian business completed three
acquisitions for £4 million, primarily 
to expand its presence in the HVAC and
engineered pipe markets.
The US Building Materials Division
completed two acquisitions in Washington
State and Northern Virginia for £13.7
million as part of its continued strategy to
expand its geographic coverage into markets
which offer good growth prospects. 
Branch numbers increased by 193 (7.0%) 
to a total of 2,939 at 31 July 2002. A net 104
new branches were opened during the year.
In the UK, 86 were added bringing the total
to 1,219. In mainland Europe, 52 new
branches were added bringing the total there
to 580. There were a net 29 closures in the
USA, primarily due to a disposal of certain
loss making HVAC locations and closure 
of duplicated Westburne US locations. 
The number of locations in North America,
including Canada, now totals 1,140.
Group Chief Executive’s review continued
Growth through acquisition 
and organic expansion 7 Wolseley plc Annual report and accounts 2002 8 Wolseley plc Annual report and accounts 2002
Group Chief Executive’s review continued 9 Wolseley plc Annual report and accounts 2002
Last year we indicated that developing a 
new European strategy and an appropriate
structure was an important part of Wolseley’s
strategy going forward. This is work in
progress which we will continue to report on
as it develops. Our European businesses have
outstanding management and personnel.
They are doing an excellent job for Wolseley
and our customers. However, there are a
number of cultural issues that need to be
understood and respected in the process of
developing a more comprehensive integrated
European strategy. We want to enhance the
performance of these companies and their
people, while at the same time ﬁnding ways
to broaden our presence and take advantage
of the changing European market.
We are currently working on plans to exploit
the successful customer approaches and
programmes that we have in our markets 
in all the countries in which we operate. 
This offers us exciting opportunities 
for growth in existing markets, as well 
as improving the prospects for identifying
acquisitions in new markets and countries. 
Opportunities exist to leverage our
investment in the operational and
administrative side of the business. Strong
progress has been made in the development
of logistics and supply chain management
programmes in some of our markets and we
believe this can be helpful towards profitable
expansion in both existing and new markets.
We are also very excited about the potential
operational benefits that can be derived 
from a more cohesive and integrated
approach to the application of technology,
human resource development and the
ﬁnancial systems of our European operations.
The group takes pride in its strong position
in the European markets in which it operates.
These companies form the basis of an
expanded organisation that can focus on the
changing European market and provide
continued growth for Wolseley. 
The European market is changing to 
become a single market with fewer obstacles
to commerce and increased opportunities for
growth. Wolseley recognises that its European
division has an opportunity to adapt its
structure to reflect these changes. By
managing the European Distribution division
as a more cohesive European unit, Wolseley
should achieve significant benefits and
synergies and be better able to explore market
opportunities. We are already located in ten
European countries and supply a wide variety
of products and services to our customers.
This provides us with a foundation to create
a European business with a more integrated
approach to the market. 
Developing a European strategy 10 Wolseley plc Annual report and accounts 2002
Group Chief Executive’s review continued
From a ﬁnancial perspective, we are already
international in our approach to investors.
We have been listed on the London Stock
Exchange for decades and we are in our
second year with an ADR listing on the New
York Stock Exchange. Our investor base is
now more diverse and we recognise access to
capital markets on both sides of the Atlantic
as an opportunity and a strength. We have
also expanded our banking relationships on
both sides of the Atlantic, in order to ensure
our expansion plans are supported by
appropriate ﬁnancial plans.
We believe our international position
provides an opportunity to create growth 
in returns for our investors, exciting
opportunities for our employees and
enhanced ways of servicing our customers.
dealing with the same supplier in a number
of different countries. We believe our
purchasing power and relationship with 
these suppliers offers exciting market
opportunities. As more and more products
are manufactured in lower cost areas, there
are increasing opportunities to leverage
buying power to acquire them.
In the area of technology, vendors are also
consolidating and the technology to manage
processes is becoming global. This is a good
opportunity to eliminate duplication, to
minimise cost and improve performance 
and processes. It provides a platform to 
share information and creativity among 
Wolseley’s companies.
Customers are also becoming more
international. While our average installer is
not crossing international boundaries, many
of our large industrial accounts, as well as
many of the large home builders and
contractors, are crossing borders and dealing
internationally. No one is in a better 
position to serve these customers than
Wolseley, and this offers another growth
opportunity to leverage the group’s position.
Wolseley has pursued an international
expansion strategy since 1982 when it
acquired Ferguson Enterprises in the USA.
Since that time we have expanded from our
small origins in the UK into 11 additional
countries. This expansion strategy has
propelled the group’s growth in sales and
proﬁtability and we see it as a key
opportunity for the future.
Today, even more so than in 1982, the 
business world is becoming increasingly
globalised. We think this trend will 
continue and we intend to take advantage 
of these changes.
Currently we operate in 12 countries with
outstanding companies in their local markets,
acting independently at the operating level
subject to financial and strategic direction
from the corporate centre. We deal with 
our customers and our local markets in
accordance with their local customs. This
approach is a very important part of the
success of Wolseley and one which will
continue to be applied and enhanced.
At the same time, the globalisation of 
markets and products gives us some unique
opportunities to leverage our position,
structure and size. The supplier base is
consolidating and increasingly we are 
Leveraging our international
position 11 Wolseley plc Annual report and accounts 2002 12 Wolseley plc Annual report and accounts 2002 exceptional on time delivery. Our buying
power can be enhanced by the volumes of
similar product across our business, such as
PVC, copper and steel pipe. 
Lastly, the opportunity to provide value
added services to our customers not only
improves margins, but increases our
relationships with our customers. Whether 
it involves fabricating steel pipe, assembling
valve actuators, assembling roof trusses or
creating custom millwork, these capabilities
are critical in differentiating us in the market. 
Diversity is just one part of the foundation
that provides substantial growth
opportunities and stability of earnings for
Wolseley and is shown on an annual basis 
by our historical results. We intend to
enhance this diversity by taking advantage 
of geographic expansion opportunities and
new products and services, as well as new
lines of business.
13 Wolseley plc Annual report and accounts 2002
Group Chief Executive’s review continued
Wolseley is a very diverse business and we
want to build and expand that as part of 
our strategy. Wolseley’s strategy is to have a
diversified approach to the marketplace that
provides for growth, as well as ensuring it is
insulated from the cyclicality of the sector.
This diversity is reflected in several ways:
diversity of geography, lines of business 
and products and services. By having a 
broad offering, Wolseley’s performance 
has been resilient in a volatile and cyclical
market sector.
Wolseley will continue to look for geographic
areas that offer growth opportunities and
foundations for further solid investments.
Being located in multiple countries on two
continents provides balance from fluctuations
in local market economies. 
Enhance business diversity
This allows Wolseley to take advantage 
of strong markets, and to minimise the
impact on the group when a local market
softens. It also helps towards providing a
better service to our customers who do
business across geographical boundaries.
Wolseley is well positioned to expand market
share as well as to take advantage of changing
business cycles. Our ability to capitalise on
the residential, commercial, repair,
maintenance, improvement and industrial
sectors enables the businesses to
accommodate changes in demand. In
addition, Wolseley is able to leverage
capabilities and investments across a broad
business offering.
Our competitive advantage is the ability to
offer a broad bundle of products. It allows
the customer to have all product
requirements met in one location and at one
time, thereby lowering the cost of doing
business. By having this wide product
offering, Wolseley is able to increase service
levels, improve ﬁll rates and provide 14 Wolseley plc Annual report and accounts 2002
Group Chief Executive’s review continued
Distribution is a people business. The quality
of our people is a major differentiator from
our competitors in the marketplace. 
Wolseley has 38,000 employees worldwide
and as we continue to grow and expand 
this number will increase. These people are
our major asset and the quality of our
recruitment, the effectiveness of our staff
retention and their development will play 
a major role in the success of Wolseley 
in the future.
A key part of an effective retention and
recruitment programme is providing visible
opportunity within the organisation. With
the growth we have planned, we feel there 
is tremendous opportunity for the people that
make up Wolseley. Our ability to capitalise
on those opportunities depends on
developing effective skills to meet the
challenges ahead.
Developing our people
A part of our strategy will be to ensure that
appropriate training is conducted within 
the individual companies and branches, 
so that people are prepared to perform at 
the highest level and also prepared to take on
career growth and additional responsibility
over time. We will continue to use the newly
implemented management development
programme at the Darden School of Business
and we will complement this and expand it
with an additional management development
programme in Europe, working with a
leading European business school. Wolseley 
is an international organisation and we will
develop exchange programmes designed to
ensure that many of our best people
experience the international aspects of
business. This is an opportunity to expose 
our people to challenges, opportunities, 
best practice and innovative ways of doing
business, so that they can learn and beneﬁt
from them and apply them in their future
roles and responsibilities. 
As Wolseley grows, top quality people 
are needed to deal with customers, to 
manage processes and to differentiate us 
in the marketplace. 
Our ability to perform as a leading
organisation is dependent upon our human
resources capability and the implementation
of our strategy. With this in mind, the
development of our people is of paramount
importance and a critical part of the 
group’s strategy. 15 Wolseley plc Annual report and accounts 2002 Distribution is a people business. One of the things that
differentiates Wolseley from its competitors is the quality 
of its people. Not only are they an integral part of the success 
of the group, but they are also committed to helping others
achieve their goals. Many give time to community events and 
a range of charities. They continually demonstrate that they 
are prepared to go beyond the call of duty to support the
business and the people in the community.
Brossette – The Brossette BTI branch in
Toulouse, France, was completely
destroyed last year in the chemical plant
explosion that killed 30 people and
injured 2,442 others. The first priority
for our staff was to ensure the welfare 
of all those wounded in the blast, which
included a number of Brossette staff. 
The second priority was to reconstruct
the branch as quickly as possible in order
to keep the customers supplied. Our
people showed an amazing spirit of
solidarity and determination. Just two
weeks after the blast, temporary offices
were set up, orders made to suppliers and
the branch started business again.
16 Wolseley plc Annual report and accounts 2002
Our people in the community
Ferguson – Two year-old Emma North,
together with her father Leigh North and
eleven other Ferguson Enterprises volunteers,
helped clean up the beach in south eastern
Virginia, in the USA. The project called
‘Clean the Bay Day’ successfully removed
175,455 pounds of rubbish within a 205-
mile area in Virginia. < 
Wolseley Centers – 16 Plumb Center 
staff and customers raised £40,000 for the
NCH (National Children’s Home).They
successfully completed a trek along sections
of the Great Wall of China and the
surrounding mountains. The team walked
over a 100 miles in high altitudes and 
soaring temperatures. The trip was very
demanding physically but with lots of pre-
fitness training and preparation, the team
completed the challenge.
> Wolseley Centers – Builder 
and Hire Center’s staff
celebrated the opening of 
a new branch in Plymouth 
by donating money to
Plymouth Argyle’s Football in
the Community scheme, to
help fund a six-week coaching
programme. This is just one 
of the many examples of
Wolseley Centers’ staff giving
money to the local community.
< 
Stock Building Supply – The staff at Anderson Lumber, part of
Stock Building Supply, welcomed the world as Salt Lake City, in the
US state of Utah, hosted the 2002 Olympic and Paralympic Winter
games. For 17 days in February and ten days in March, more than 
ten Anderson Lumber staff joined over 26,000 volunteers needed to
host the games. The volunteers helped with many tasks during the
event – including driving athletes, officials and Olympic families to
and from sporting events, answering spectators’ questions, removing
snow from the course and solving any problems on the day. Many
volunteers had to be up at 4.00am, work all day and then turn 
around and do it all over again the next day.
17 Wolseley plc Annual report and accounts 2002
Ferguson – Connie Luhrs, showroom
consultant in Ferguson’s Syracuse branch, 
in the USA, received a request for some
sunglasses from her son Christopher Miller,
who is in the military in Afghanistan. She
relayed the message to her manager and he
suggested sending some safety sunglasses out
to the soldiers in Afghanistan. The glasses
worked exceptionally well at keeping the
sand out of their eyes, so the Syracuse
branch sent additional glasses out to help
other soldiers on duty in the region. 
Wolseley Centers – Plumb Center staff
and customers raised £17,000 to help
buy a 15 seater Sunshine Coach minibus
for disabled children in the north of
England. It is the fifth Sunshine Coach
Plumb Center has given in co-operation
with the Variety Club golf society of
stars from the entertainment world. 18 Wolseley plc Annual report and accounts 2002
Operating and ﬁnancial review
Wolseley is committed to providing long-term 
value for its shareholders by pursuing a strategy 
of competing internationally in the plumbing, 
heating and building materials markets. Wolseley
pursues this strategy by fostering organic growth 
in existing territories by opening new branches
and distribution centres, broadening the 
product range, developing enhanced IT systems,
promoting e-business programmes and
expanding through selective acquisitions.
Another record year 19 Wolseley plc Annual report and accounts 2002
Wolseley plc is the holding company, 
based in Theale, England, of an international
group of companies. It is listed on the
London Stock Exchange and is a constituent
of the FTSE 100 Index. It has American
Depository Receipts (“ADR’s”) listed on the
New York Stock Exchange.
Group activities
The Wolseley group is focussed on the
distribution of plumbing and heating
products and building materials to the
construction sector, industry and government
in Europe and North America. The primary
customer base is shown below:
Organisation structure
The group is organised into three 
business segments:
• European Distribution
• North American Plumbing and 
Heating Distribution
• US Building Materials Distribution
The performance of each of these three
divisions during the last financial year is
reviewed on pages 20 to 23.
Dynamics of the business
The principal business drivers relating 
to each of the three business segments 
are shown below:
Customer mix
1 Plumbing installers 35%
2 Utilities 6%
3 HVAC 7%
4 Industrial 6%
5 Mechanical contractors 16%
6 Building contractors 30%
1
2
3
4
5
6
100
90
80
70
60
50
40
30
20
10
0
Euro Dist NA P&H US Bldg Mat
New residential
housing
RMI Industrial
Industrial and
commercial
RMI Residential
49%
3%
16%
32%
12%
7%
45%
10%
90%
Business drivers  % of group sales
36%
Competitive position
Wolseley is the world’s largest specialist
trade distributor of heating and plumbing
products with operations in 12 countries. 
It is the market leading distributor of
plumbing and heating products and
building materials in the USA. It has market
leading positions in the plumbing and
heating business in the UK, France, Austria
and Luxembourg. It is the number two
distributor of plumbing and heating
products in Canada. It has interests in
plumbing and heating distribution in
Ireland, Italy, Denmark, The Netherlands,
Hungary and the Czech Republic.
Strategy
Aspects of the group’s strategy are
discussed in the Group Chief Executive’s
review on pages 4 to 15. 20 Wolseley plc Annual report and accounts 2002
Financial targets
The group’s overall ﬁnancial objective is to increase shareholder value by achieving, 
on average, double digit growth in sales, proﬁts and earnings per share each year whilst
producing a return on gross capital comfortably in excess of the weighted average 
cost of capital. The group’s recent growth and return on capital over the last ﬁve years 
is set out below:
Group 2002 2001 2000 1999 1998
Growth in sales 10.7% 12.4% 16.3% 15.7% 3.4%
Growth in trading proﬁt 12.0% 7.4% 21.1% 14.9% 4.9%
Growth in earnings per share 15.1% 13.5% 9.7% 16.5% 5.2%
Return on gross capital employed 16.7% 16.5% 16.9% 17.0% 17.5%
The growth in earnings per share is shown before exceptional items and 
goodwill amortisation.
Trading proﬁt is deﬁned as operating proﬁt before exceptional items and 
goodwill amortisation.
Return on gross capital employed is as defined in note 2 on page 78.
Key performance indicators
The key performance indicators for each of the three business segments are set out below:
2002 2001 2000 1999 1998
European Distribution
Sales growth 6.2% 8.0% 12.5% 18.9% 1.7%
Net margin percentage 6.8% 6.7% 6.6% 5.6% 6.6%
Return on gross capital employed 17.6% 17.4% 17.4% 16.2% 18.8%
North American Plumbing and 
Heating Distribution
Sales growth 19.7% 17.6% 19.1% 12.8% 8.0%
Net margin percentage 5.6% 5.2% 5.3% 5.3% 4.6%
Return on gross capital employed 18.0% 17.4% 18.5% 20.6% 19.5%
US Building Materials Distribution
Sales growth 5.0% 29.9% 31.2% 29.5% 8.4%
Net margin percentage 4.9% 5.5% 6.3% 6.2% 5.9%
Return on gross capital employed 12.6% 13.8% 16.4% 17.2% 16.6%
Operating and ﬁnancial review continued
REVIEW OF OPERATIONS
European Distribution
The division produced 31.6% (2001:
33.0%) of the group’s turnover and 36.9%
(2001: 38.2%) of the group’s trading proﬁt.
Sales for the division increased by 6.2%
from £2,371.4 million to £2,517.5 million
including an organic increase of 2.7%,
driven by strong growth in the UK
businesses and an incremental contribution
of £69.9 million from acquisitions, mainly 
in the UK. Trading proﬁts increased by
8.3% from £158.2 million to £171.4
million. The divisional net margin increased
from 6.7% to 6.8% of sales.
The UK was the strongest market in which
the group operated during the ﬁnancial
year. The principal driver was the RMI
(repairs, maintenance and improvement)
market which was buoyed by strong
consumer demand against the background
of lower interest rates, low unemployment
and house price inflation. Conversely, the
group’s Continental European markets 
were generally flat.
UK (including Ireland)
Wolseley Centers took full advantage of 
a strong UK market and increased sales by
8.7% to £1.7 billion, including an organic
increase of 4.5%. Trading proﬁt was 11.3%
higher at £128.7 million. Each of the four
trading divisions increased its gross margin
percentages compared to the prior year.
The overall net margin percentage was 
up from 7.6% to 7.8% of sales, despite
increased costs relating to the move into
two new distribution centres.  21 Wolseley plc Annual report and accounts 2002
The UK lightside division opened an
additional 51 branches to further increase
market share and better service customer
needs. Organic growth in lightside was just
under 7% and the net margin percentage
was unchanged on the prior year. Heavyside
focussed on margin enhancement and 
cost containment. It also beneﬁted from
acquisitions, adding to its timber product
offering. The net margin percentage in
heavyside has risen substantially over the
last four years, due to improved purchasing
flowing from increased scale, operational
efﬁciency and a more favourable product
mix. The margin is now close to 8% of
sales. Demand was weakest in the Industrial
and Commercial division, although the
market trends improved in the second half
and trading proﬁt was up on the previous
year. The warmer weather did not help 
the spares division, where sales demand is
higher in colder periods and trading profits
ended marginally down on last year.
France
Whilst the trends were better in the second
half, Brossette reported lower sales and
proﬁts than in the previous year, despite
achieving a higher gross proﬁt percentage.
There were a number of factors which
adversely affected Brossette’s performance.
The heating market, which traditionally
accounts for approximately 40% of
Brossette’s product range, was weak
throughout the year reflecting a move away
from gas and oil fuelled boilers to electricity.
Brossette outperformed in a period of
overall market decline and has expanded 
its product offering to include electrical
heating products. It is also in the process 
of centralising certain functions and refining 
its distribution network. Although the
introduction of the 35 hour week in 
France has impaired productivity, such
infrastructure changes will result in 
synergies and cost savings in future years. 
Brossette’s net margin percentage was
down on the previous year.
Rest of Europe
Despite one of the worst construction
markets in the last decade, OAG in Austria
achieved a 5% increase in sales and an
improvement in trading proﬁt of 29%. The
new management team has increased the
focus on cost savings, product expansion
and margin enhancement. The resulting net
margin percentage was ahead of last year.
OAG’s subsidiaries in the Czech Republic
and Hungary now account for nearly 14%
of OAG group sales. Particularly good
progress was made in Hungary where both
sales and proﬁtability increased whereas
conditions in the Czech Republic were 
more difﬁcult.
Manzardo, in Italy, focussed on expansion 
of its branch network and other organic
growth in the absence of suitably priced
acquisitions to increase critical mass more
quickly. At 31 July 2002, the branch
network comprised 17 locations, including
11 express stores, which have been
developed using the tried and tested French
business model. Manzardo now operates in
more than double the number of locations
than at the time of acquisition. Sales
increased by 6% but trading proﬁts
expanded at a lower rate due to the costs
associated with new branch openings.
The market for CFM in Luxembourg was
adversely affected by increased competition
from German companies seeking business
elsewhere to escape their own depressed
markets. However, CFM produced sales
growth of just over 2% and an increase in
trading proﬁt of nearly 20%, assisted by
certain one-off credits.
Wasco in The Netherlands, which was
acquired in early July 2002, produced a
result in line with expectations for the ﬁrst
month’s trading within the group.
North American Plumbing and 
Heating Distribution
The division produced 45.1% (2001:
41.7%) of the group’s turnover and 43.3%
(2001: 37.5%) of the group’s trading proﬁt.
Sales for the division increased by 19.7%
from £3,000.5 million to £3,592.4 million.
Acquisitions generated £629.9 million of
additional sales. After taking into account
the effect of closed locations, principally the
duplicated Westburne locations in the USA
and adjusting for a small amount of price
deflation, organic sales volumes in the USA
were flat, year-on-year, in a market that
declined by an estimated 5%. This
demonstrates a clear market
outperformance.
Trading proﬁt for the division increased by
£45.2 million (29.1%) from £155.5 million
to £200.7 million. The incremental
contribution from acquisitions made in
2001 and 2002 was £31.3 million. The
contribution from Westburne, which was  22 Wolseley plc Annual report and accounts 2002
purchased in July 2001, exceeded
expectations. The net margin percentage of
the division improved from 5.2% to 5.6%
of sales, reflecting continued beneﬁts of
scale and operational efﬁciency from
distribution centres in the USA, increased
labour productivity and the contribution
from the higher margin Canadian business.
USA
Trading patterns in the USA remained
mixed throughout the year, both by
business segment and geography. The
Industrial and Commercial sector has not
yet shown any signs of recovery, whereas
activity levels relating to housing,
remodelling and infrastructure spending
were satisfactory despite uncertainty as to
the general direction of the US economy.
US plumbing, under the overall guidance of
the Ferguson management team, produced
an excellent result with sales increasing 
by 9.6% and trading proﬁt by 13.5%.
Acquisitions accounted for £320.9 million
of incremental sales and £12.8 million 
of additional proﬁts. One-off costs of 
£6.7 million were incurred, relating to the
integration of Westburne and Clayton into
Ferguson. One-off proﬁts of £3.3 million on
property disposals were realised. The net
margin percentage for US plumbing was
slightly higher, primarily due to an increase
in the gross proﬁt percentage arising from
further beneﬁts of the distribution centre
network. Cash flow from US plumbing
operations signiﬁcantly improved on the
prior year as inventory reductions were
achieved from the increased throughput at
the distribution centres. Accordingly, the 
average working capital to sales ratio
showed a good improvement on last year.
The integration of Westburne’s US business
and Familian Northwest into Ferguson is 
on schedule and will bring synergies and
additional opportunities for sales and proﬁt
growth over the coming years. In particular,
an increase in Westburne’s US net margin
percentage, which is currently around
3.5%, of at least 150 basis points should
be achievable.
Canada
The market in Canada held up better than
the USA throughout the ﬁnancial year. 
Sales for the month of July were a record
for Westburne in Canada, boosted by
strong sales of HVAC equipment in 
a prolonged spell of hot weather. The
Canadian management concluded that
more favourable brand recognition would
be achieved in the marketplace if the 
name Westburne ceased to be used. 
The Canadian business, now trading 
as Wolseley Canada, increased its net
margin. Wolseley Canada exhibits many 
of the characteristics of other strong
businesses within the Wolseley group,
including tight cost control and a positive
approach to achieving growth through 
a combination of organic expansion and 
bolt-on acquisitions. 
US Building Materials Distribution
The division produced 23.3% (2001:
24.6%) of the group’s turnover and 19.8%
(2001: 23.4%) of the group’s trading profit.
Sales for the division increased by 5.0%
from £1,769.7 million to £1,857.7 million. 
A more selective approach to acquisitions 
in this division resulted in fewer transactions
than recent years but acquisitions still
contributed the majority of the increase 
in sales.
Sales volumes were marginally up on the
prior year. Average lumber prices were
virtually unchanged, although they remain
at levels significantly below historical norms
due to excess global supply of the
commodity. As at 31 July 2002 the price 
for framing lumber was $309 per thousand
board feet, compared to $324 at the 
same time last year.
Whilst the overall housing market remained
resilient throughout the ﬁnancial year at
around 1.6 million starts, there were
pockets of weakness. Regional markets 
in Denver, Detroit, Atlanta, Austin and Salt
Lake City were all down on the prior year,
whilst Los Angeles, Raleigh and Tampa
showed good gains. Competitive tensions,
particularly in the weaker markets, created
pressure on margins and the overall gross
margin percentage ﬁnished below the prior
year. Some of the weaker markets have
recently shown more encouraging signs. 
Action was taken early in the ﬁnancial year
to reduce headcount and other costs which
helped to mitigate the effect of the gross
margin erosion. This improved the trend in
the net margin percentage in the second
half although trading proﬁt ﬁnished
marginally down for the full year.
Operating and ﬁnancial review continued 23 Wolseley plc Annual report and accounts 2002
The process of harmonising the various
different trading names within the division
to Stock Building Supply (“STOCK”) is well
in hand and is expected to be fully
completed by the end of the calendar year.
Implementation of the Nx Trend computer
system has now been achieved in 51% of
locations and all existing locations should
be converted by July 2003. These
improvements to the support systems and
the stronger brand identity are expected 
to deliver increasing beneﬁts to further
enhance STOCK’s position as the number
one distributor of building materials to the
professional contractor in the USA. STOCK
now operates in 24 states and continues 
to expand its value added capability in
response to customer demand. Value added 
products achieve higher margins than
framing lumber and enjoy more stable
pricing characteristics. They account for
47% of the product range (2001: 43%).
STOCK produced a signiﬁcant improvement
in its operating cash flow through 
a reduction in inventory levels and a
partnership programme with suppliers 
to extend payment terms. Suppliers
increasingly recognise the benefits of
dealing with the centralised purchasing
function of STOCK. 
In view of the weakness in certain regional
markets, STOCK has reduced the level of
construction loan lending and increased the
percentage of loans on pre-sold as opposed
to speculative homes. Construction loan
receivables at 31 July 2002 amounted to
£171.4 million compared to £215.5 million
at the previous year-end. Net interest 
receivable on construction loan lending
amounted to £9.1 million compared to 
£6.7 million in the prior year. STOCK will
continue to adopt a cautious approach with
the loan portfolio which turned 1.63 times
compared to 1.47 times in the prior year.
STOCK and Ferguson are working together
to achieve synergies in administration and
operations. In addition, the two Wolseley
US companies are collaborating on
marketing a collectively wider range 
of products to major housebuilders. 
The “Whole House Project” is underway
with the first pilot being launched in
Tampa, Florida.
GROUP OUTLOOK
The outlook for the group remains positive
in the UK where the RMI market is
expected to maintain its good momentum
and higher levels of public sector spending
should create further opportunities 
for growth.
Prospects in Continental Europe are less
favourable and little change is expected
from the flat markets seen by the group
over the last ﬁnancial year.
The key to activity levels in the USA lies in
consumer and business conﬁdence holding
up. The market conditions which our US
companies are currently experiencing create 
opportunities for further proﬁtable growth.
It is unlikely that the Industrial and
Commercial market in the USA will show
signs of any upturn before the end of the 
calendar year but prospects for the housing 
market, remodelling and infrastructure
spending are currently more encouraging.
The mixed regional variations are likely to
continue since local economies in the USA 
are driven by different influencing factors. 
The diversity and market positioning of 
the group’s US businesses will enable them
to continue to outperform overall 
market trends.
The outlook for Wolseley in Canada is
positive, although, once again, regional
variations are likely.
The group should continue to beneﬁt over
the next ﬁnancial year from the additional
organic growth opportunities created by
recent acquisitions, and from cost savings
and synergies relating to the integration of
business units. The clear strategic focus 
of the group, together with the increasing
scale and market strength of its businesses,
should enable further progress to be
achieved over the coming year. The
increasing diversity in the product range
and the customer base of group companies,
coupled with the ability to cut costs where
necessary, will continue to stand the group
in good stead in these challenging times.
GROUP PERFORMANCE
Overall results
The trading results for the year ended 
31 July 2002 are a record for the group for
the sixth consecutive year. These results
reflect particularly strong performances in
the UK and North American Plumbing and  24 Wolseley plc Annual report and accounts 2002
Operating and ﬁnancial review continued
Heating Distribution and demonstrate the
resilience of the group’s businesses against
the background of uncertain business
conditions. They also reflect the
achievement of the group’s key ﬁnancial
targets of double digit growth in sales 
and earnings.
Turnover
Group sales increased by 10.7% from
£7,195 million to £7,968 million. 
Trading proﬁt 
Operating proﬁt increased by 10.3% from
£396.4 million to £437.2 million, after
charging one off acquisition integration
costs of £7.1 million and after crediting 
net property proﬁts of £4.3 million. The
increase in proﬁt before tax (before
exceptionals and goodwill amortisation)
was 15.4% from £379.0 million to 
£437.4 million.
Results of continuing activities
Sales and operating proﬁts before goodwill
amortisation and exceptionals (“trading
proﬁt”) on continuing activities (excluding
the group’s manufacturing activities, the
last of which was disposed of in February
2001) increased by 11.6% and 13.0%,
respectively. 
Currency translation
The effect of currency translation on the
results for the year was not signiﬁcant but
the effect on each division’s results is shown
in note 1 to the accounts.
Interest
The interest charge reduced from £35.2
million to £26.5 million, reflecting lower
interest rates on the group’s borrowings
and a lower working capital to sales ratio 
of 16.0% compared to 16.1% in the prior
year. The interest cover is over 16 times
(2001: 11 times, before exceptionals).
Tax
The effective tax rate is unchanged from
the previous year at 28%. It is anticipated
that this rate will apply for the next
ﬁnancial year providing there are no
signiﬁcant changes in legislation and
provided the geographical contribution 
to group results stays broadly the same.
Earnings per share
Before exceptionals and goodwill
amortisation, earnings per share increased 
by 15.1% from 47.43 pence to 54.58
pence. Total basic earnings per share
increased by 55.3% reflecting the
exceptional loss on disposal of the
remaining manufacturing operations in 
the previous year. The average number of
shares in issue during the year was 
577.1 million (2001: 575.3 million).
Dividends
The proposed ﬁnal dividend is 13.90 pence
(2001: 12.35 pence) per share, an increase
of 12.6%. This increase reflects the strong 
performance of the group during 
this ﬁnancial year and the board’s
conﬁdence in the prospects for future
growth in shareholder value. With the
interim dividend of 5.00 pence already 
paid, total dividends for the year will
amount to 18.90 pence per share, an
increase of 11.8% over the dividends
declared in respect of last year.
The cost of dividends paid and proposed 
in respect of the ﬁnancial year is £109.2 
million (2001: £97.4 million). The dividend
cover is unchanged from the previous 
year at 2.6 times.
Acquisitions
The level of acquisition spend in each
division will vary each year as opportunities 
arise. Following is a chart which shows the
acquisition spend in each division 
over the last 5 years:
The group continues to seek acquisitions to
expand all areas of its activities. A total of 
14 acquisitions was completed during the
year for a combined consideration of £160.3
million including net debt acquired. All of
this amount was funded with debt. The 
acquisitions within each division, together 
with their likely contribution to turnover in
a full year, may be summarised as follows:
Full year
contribution to
Consideration turnover
Division £m £m
European Distribution 60 124
North American Plumbing 
and Heating Distribution 86 185
US Building Materials 
Distribution 14 52
160 361
Since 31 July 2002 the group has completed
further acquisitions for an aggregate
consideration including debt acquired 
of £16.5 million. These acquisitions are
expected to contribute a further £34 million
to group turnover in a full year.
450
400
350
300
250
200
150
100
50
0
1998 1999 2000 2001 2002
European
Distribution
US Building
Materials Distribution
North American
Plumbing & Heating
Manufacturing
Acquisitions by segment £ million 25 Wolseley plc Annual report and accounts 2002
Financial position
Shareholders’ funds increased by £103.5
million from £1,496.4 million to £1,599.9
million. The net increase comprised the
following elements:
£m
Retained proﬁts 179.0
New share capital subscribed 
(exercise of share options) 7.6
Goodwill written back on disposals 1.2
Exchange translation (84.3)
Increase in shareholders’ funds 103.5
The movement of sterling against overseas
currencies, particularly the US dollar,
resulted in a translation difference of £59.7
million which reduced borrowings on the
balance sheet. Net borrowings, excluding
construction loan borrowings, reduced by
£148.1 million to £545.6 million, despite
the acquisition spend of £160.3 million,
giving year-end gearing of 34.1% (2001:
46.4%). Construction loan borrowings
relating to the group’s US Building Materials
Distribution activities amounted to £171.4
million (2001: £215.2 million) are used to
fund secured construction loans receivable
of £171.4 million (2001: £215.5 million).
Against the background of recent comment
concerning asbestos litigation, Wolseley
confirms that such litigation is not material
to the group’s financial statements. 
For a number of years, Wolseley’s North
American Plumbing and Heating Distribution
division has received claims relating to
asbestos. All settled claims, including the
associated legal costs, have been met by
insurance. Insurance cover signiﬁcantly
exceeds the estimated liabilities. There has
been no proﬁt and loss account charge in
this, or any prior ﬁnancial year and no such
charge is expected to arise in the future.
Treasury risk management
The group is exposed to market risks arising
from its international operations. The group
has well defined and consistently applied
policies for the management of foreign
exchange and interest rate exposures. There
has been no change since the year-end in
the major ﬁnancial risks faced by the group.
The main risks arising from the group’s
ﬁnancial instruments are interest rate risk,
liquidity risk and foreign currency risk. The
treasury committee of the board reviews
and agrees policies for managing each of
these risks and they are summarised below.
These policies are regularly reviewed. The
group’s financial instruments, other than
derivatives, comprise borrowings, cash and
liquid resources and various items, such as
trade debtors and trade creditors that arise 
directly from its operations. The group also
enters into derivative transactions (principally
interest rate swaps and forward foreign
currency contracts). The purpose of such
transactions is to hedge certain interest rate
and currency risks arising from the group’s
operations and its sources of finance.
Details of ﬁnancial instruments are shown
in note 32 to the accounts.
Derivatives are also used to a limited extent
to hedge movements in the future prices of
lumber. These options and futures hedging
contracts mature within one year and all
are with organised exchanges. The number
and monetary value of outstanding contracts
at the year-end were not signiﬁcant.
Cash flow generation
2002 2001 2000 1999 1998
£m £m £m £m £m
Cash flow from operating activities 584 518 390 339 313
Maintenance Capex (93) (85) (74) (62) (55)
Tax (120) (91) (113) (130) (92)
Dividends (100) (91) (81) (73) (60)
Interest (23) (37) (24) 2 (2)
Free cash flow 248 214 98 76 104
Acquisitions less disposals (162) (388) (163) (290) (56)
Expansion Capex (7) (28) (49) (48) (24)
Other 69 (37) (31) (5) –
Movement in debt 148 (239) (145) (267) 24
This demonstrates the inherently strong cash flow characteristics of the group. The free
cash flow of around £200 million is sufﬁcient to fund the group’s targeted acquisition
spend each year. “Other” in the above table principally relates to currency translation and
is not a cash flow item.
Particular focus on the control of working capital contributed to a strong cash flow
performance. Cash flow from operating activities increased by 12.8% from £518.0 million
to £584.1 million. The average working capital to sales ratio reduced from 16.1% last year
to 16.0%. The net capital expenditure of £96.8 million (2001: £108.8 million) and new
finance lease assets of £2.6 million (2001: £4.8 million) demonstrates continued
investment in the group’s operations as a platform for future growth.
Cash flow
The cash flow performance of the group over the last ﬁve years is summarised below. 26 Wolseley plc Annual report and accounts 2002
The group’s policy is to control credit risk 
by only entering into ﬁnancial instruments
with authorised counterparties after taking
account of their credit rating.
It is, and has been throughout the period
under review, the group’s policy that no
trading in ﬁnancial instruments or
speculative transactions be undertaken.
Interest rate risk
The group ﬁnances its operations through 
a mixture of retained proﬁts and bank and
other borrowings. The group borrows in the
desired currencies principally at floating rates
of interest and then uses interest rate swaps
to generate the desired interest rate proﬁle
and to manage the group’s exposure to
interest rate fluctuations. The group’s current
policy is to convert floating to ﬁxed interest
rates, by the use of interest rate swaps and
forward rate agreements, to hedge the
interest rate risk on borrowings with 
a maturity of one year or more. At the year-
end approximately one third of the group’s
net borrowings were at ﬁxed rates for one
year or more after taking account of swaps.
The group reviews deposits and borrowings
by currency at treasury committee and board
meetings. The treasury committee gives prior
approval to any variations from floating rate
arrangements.
Liquidity risk
The group seeks a balance between certainty
of funding and a flexible, cost-effective
borrowings structure. The group’s policy is to
ensure that, as a minimum, all projected net
borrowing needs are covered by committed
facilities arranged and provided by the
corporate office, supplemented where
appropriate by local overdraft facilities.
The group’s strong cash flow and low
gearing are such that the ratio of net debt to
EBITDA for the year was only 0.98. During
the year, the group made an early repayment
of US$185 million of term loans. In the
absence of significant acquisitions, the group
would anticipate having surplus funds within
the medium-term. Given these circumstances
it has been concluded that funding sources
with a maturity of more than seven years are
inappropriate at the present time.
The principal source of funds to the group 
is committed bank debt. A mix of term loans
and revolving credit facilities are used to
obtain the desired currency and maturity
profile. Historically, the group has entered
into large syndicated loan facilities; no
syndications were launched during the
financial year. Over the last two years a
number of smaller bilateral facilities have
been agreed. This approach has enabled the
group to adjust its funding profile more
precisely to match its investment profile and
strengthen its relationships with its core banks.
During the year, the group entered into
three bilateral facilities. The refinancing of
the Westburne acquisition was successfully
completed with a seven year amortising
facility which raised £43 million in Canadian
Dollars. Two other bilateral facilities raised
£54 million in a combination of US Dollars
and Euros. Both facilities had a maturity 
of three years.
Wolseley exercised its option to convert the
US$305 million revolving credit into a term
loan with a maturity in financial year 2004.
In addition the group has a £200 million
bank overdraft facility and a number of
other uncommitted facilities which enable
the group to maintain short-term flexibility.
The year-end maturity profile of the group’s
centrally managed facilities was 
as follows:
Facility
£m
Less than 1 year 200
1-2 years 48
2-3 years 249
3-4 years –
4-5 years 397
5-6 years –
6-7 years 43
Total 937
As at the year-end undrawn committed
facilities are as follows:
£m
Less than 1 year 184
1-2 years nil
Over 2 years 76
Foreign currency risk
The group has signiﬁcant overseas businesses
whose revenues are mainly denominated in
the currencies of the countries in which the
operations are located. Approximately 64%
of the group’s sales are in US Dollars. The
group does not have signiﬁcant foreign
currency cash flows arising from transactions.
However, those that do arise are generally
hedged with either forward contracts or
currency options. The group does not normally
hedge proﬁt translation exposure since such
hedges have only temporary effect. Most of
the foreign currency earnings generated by
the group’s overseas operations are reinvested
in the business to fund growth in those
territories. The group’s policy is to maintain
the majority of its debt in the currencies of
its operating companies as this hedges both
the net assets and cash flows of the group. 
Details of average exchange rates used in the
translation of overseas earnings, and of year-
end exchange rates used in the translation
of overseas balance sheets, for the principal
currencies used by the group are shown in
note 30 to the accounts. The net effect of
currency translation was to decrease
turnover by £18.6 million (0.3%) and to
reduce trading proﬁt by £2.2 million (0.5%). 
Operating and ﬁnancial review continued 27 Wolseley plc Annual report and accounts 2002
These currency effects reflect a movement
of the average sterling exchange rate
against each of the major currencies with
which the group is involved as follows:
(Strengthening)
/Weakening of sterling %
US Dollar (0.7)
Euro 1.3
Fair value of financial instruments
As set out in note 32 to the accounts, there
is no significant difference between the
book value and fair value of financial
instruments as at 31 July 2002.
Market price risk
The group regularly monitors its interest rate
and currency risk by reviewing the effect on
proﬁt before tax over various periods of a
range of possible changes in interest rates
and exchange rates. On the basis of the
group’s analysis it is estimated that the
maximum effect of a rise of one percentage
point in the principal interest rates on the
group’s continuing businesses would result
in an increase in the interest charge of
approximately £4.5 million. Similarly, it is
estimated that a strengthening of sterling by
10% against all the currencies in which the
group does business would reduce proﬁt
before tax for 2002 by approximately £30.6
million (7.5%) due to currency translation.
Shareholder return
The group monitors relative Total
Shareholder Return (“TSR”) for incentive
purposes (as set out on page 41) and for
assessing relative ﬁnancial performance.
For the year ended 31 July 2002, Wolseley
achieved a 21% increase in TSR which put it
in 7th position against a monitored peer group
of 63 companies drawn from the FTSE 100
and the Building Materials and Construction
sectors. The principal exclusions from the
FTSE 100 in deriving the peer group are
ﬁnancial services, telecommunications and
utility companies. We continue to monitor
return on capital including goodwill, 
throughout the group, as one of the key
measures of business performance. Return
on gross capital employed (as deﬁned on
page 78) increased from 16.5% last year to
16.7%, well ahead of the group’s weighted
average cost of capital, thereby generated
additional shareholder value.
At the close of business on the date of the
Directors’ Report, the value of an ordinary
share as quoted in the Financial Times was
458.0 pence per share (2001: 378 pence),
an increase of 21.2%. The market
capitalisation of the group at that date was
£2,647 million (2001: £2,179 million). The
total dividend of 18.9 pence per share in
respect of the 2002 ﬁnancial year gives a
yield of 4.1%, based on the above market
value of the shares.
Financial reporting
The group’s accounting policies fully reflect
the requirements of the Accounting
Standards Board (ASB).
There have been no new Financial Reporting
Standards issued in the period and no changes
to the group’s selected accounting policies.
The group adopted FRS 19 (Deferred
Taxation) one year earlier than necessary
which resulted in a change in the
accounting policy for deferred taxation 
in last year’s financial statements.
Under the transitional arrangements contained
within FRS 17, (Retirement Beneﬁts), the
group has continued to adopt the rules set
out in SSAP 24 for pensions accounting
during the financial year. Note 33 to the
accounts includes the additional disclosures
required by FRS 17. The ASB announced
during the year that mandatory adoption of
FRS 17 has been deferred and will not apply
until periods ending on or after 22 June 2005.
This Operating and financial review (“OFR”)
has been developed taking into account
emerging best practice in this area and 
the ASB’s recent exposure draft on OFR’s. 
It is hoped that it will give shareholders 
an improved understanding of the group’s
performance, the dynamics of the business
and its future potential.
Insurance
The insurance arrangements of the group are
reviewed annually by the audit committee.
The group has a captive insurance company
which is registered and operational in the
Isle of Man. No policies are written for third
parties. The administration is undertaken 
by a specialist management company.
Going concern
The directors are conﬁdent, on the basis 
of current ﬁnancial projections and facilities
available, that the company and the group
have adequate resources to continue 
in operation for the foreseeable future.
Accordingly, the directors continue to 
adopt the going concern basis in preparing
the accounts.
Cautionary Statement
The OFR and other sections of this report
contain forward looking statements that are
subject to risk factors associated with the
building materials and construction sectors.
It is believed that the expectations reflected
in these statements are reasonable, but they
may be affected by a wide range of variables
which could cause actual results or trends 
to differ materially, including but not limited
to, risks associated with changes in economic
conditions, the strength of the plumbing
and heating and building materials markets
in North America and Europe, risks
associated with Wolseley’s growth strategy
(including the ability to identify suitably
priced acquisitions), fluctuations in product
pricing and changes in exchange and
interest rates.
Steve Webster
Group Finance Director  28 Wolseley plc Annual report and accounts 2002
1 Richard Ireland
CHAIRMAN Aged 68
First appointed to the board on 12 December
1975. Mr Ireland was Group Finance Director
from 1975 to 1994. He became a non-executive
director in May 1995 and Group Chairman on
1 August 1996. Mr Ireland is Chairman of the
Treasury and Nominations Committees and 
a member of the Audit Committee in addition
to being Chairman of the Trustees of the
Wolseley Group Retirement Beneﬁts Plan. 
He was Chairman of Severn Trent plc from
1994-1998 and a director of Schroder UK
Growth Fund plc until August 2002.
2 Charles A Banks 
GROUP CHIEF EXECUTIVE Aged 61
First appointed to the board on 1 August 1992,
Mr Banks was appointed Group Chief Executive
on 3 May 2001. He was previously Chief
Executive of Ferguson Enterprises Inc. and 
spent 34 years with that company. He is a non-
executive director of Bunzl plc and of Harbor
Bank which is headquartered in Virginia, USA.
3 Jacques-Régis Descours 
CHIEF EXECUTIVE, BROSSETTE SA AND
BUILDING DISTRIBUTION SOUTHERN 
EUROPE Aged 54
First appointed to the board on 1 September
1998. Mr Descours joined Brossette in 1984
and was appointed its Finance Director on 
1 January 1992. He was appointed Deputy
Managing Director of Brossette in November
1994 and Managing Director on 1 February
1997. His responsibilities were extended to
include the development of the group’s business
in Southern Europe as from 1 September 1998.
4 Fenton N Hord 
CHIEF EXECUTIVE, US BUILDING MATERIALS
DISTRIBUTION Aged 55 
First appointed to the board on 2 October
2000. He joined the group as Chief Executive 
of Carolina Holdings Inc, trading as Stock
Building Supply, in 1987. Prior to then, Mr
Hord was President of Eskimo Pie Corporation,
a subsidiary of Reynolds Metals co. He is a non-
executive director of Reeds Jewellers Inc.
5 Claude ‘Chip’ A S Hornsby 
CHIEF EXECUTIVE, US PLUMBING AND
HEATING DIVISION Aged 46
First appointed to the board on 3 May 2001.
Mr Hornsby is responsible for the US Plumbing
and Heating Division which incorporates
Ferguson, Familian Northwest and the US
operations of Westburne, acquired in 2001. 
Mr Hornsby has spent 24 years with Ferguson.
6 Andrew J Hutton 
CHIEF EXECUTIVE, WOLSELEY CENTERS LTD
AND BUILDING DISTRIBUTION NORTHERN
EUROPE Aged 55
First appointed to the board on 1 August 1994.
He assumed additional responsibility for
building distribution activities in Northern
Europe with effect from 1 September 1998. 
Mr Hutton has spent most of his working life 
in the building materials distribution trade.
6
Our directors
1 234 5 7
3409 Wolseley Front AW  7/11/02  1:32 pm  Page 28 29 Wolseley plc Annual report and accounts 2002
10811 9
7 Stephen P Webster 
GROUP FINANCE DIRECTOR Aged 49
Chartered Accountant. First appointed to the
board on 1 August 1994 as Group Finance
Director designate. Appointed as Group Finance
Director on 9 December 1994. Formerly 
a partner in Price Waterhouse.
8 John M Allan 
NON-EXECUTIVE DIRECTOR Aged 54
First appointed to the board on 1 June 1999.
He is a member of the Audit and Remuneration
Committees. Mr Allan is currently Chief
Executive of Exel plc and a non-executive
director of PHS Group Plc. He is a member 
of the CBI’s Presidents’ Committee and is a
member of the University of Edinburgh
Campaign Board.
9 James I K Murray 
NON-EXECUTIVE DIRECTOR Aged 56
First appointed to the board on 12 April 2002.
He is Chairman of the Audit Committee and a
member of the Treasury Committee. Mr Murray
was Finance Director of Land Securities PLC
from 1991 until his retirement in 2001.
10 Robert M Walker 
NON-EXECUTIVE DIRECTOR Aged 57
First appointed to the board on 1 July 1999. 
He is a member of the Remuneration and
Nominations Committees. Mr Walker is
currently Group Chief Executive of Severn Trent
Plc following over 20 years service with PepsiCo
International, culminating as Division President.
11 John W Whybrow 
DEPUTY CHAIRMAN Aged 55
First appointed to the board on 1 August 1997.
He is a member of the Nominations Committee
and Chairman of the Remuneration Committee.
Mr Whybrow was President and Chief Executive
Officer of Philips Lighting Holding B.V., based
in The Netherlands until 2001 and Executive
Vice President, Philips Electronics N.V. from
1998 until March 2002, when he returned 
to the UK. 30 Wolseley plc Annual report and accounts 2002 Report of the directors
Including the statement of remuneration policy for the year ended 31 July 2002.
The directors submit their annual report and the audited
consolidated accounts of the company and its subsidiaries for 
the year ended 31 July 2002.
Principal activities and business review
Wolseley plc is a holding company; its subsidiaries are organised
into three divisions which are set out on pages 19 to 23. The
principal activities of the group are the distribution of plumbing
and bathroom materials, central heating equipment and pipes,
valves and fittings within Europe, the USA and Canada.
Additionally, in the UK it distributes heavyside building materials
and operates tool hire centres, whilst in the USA the group
distributes timber and other building materials.
Details of the development of the group’s businesses during the
year are given in the Operating and financial review on pages 18 
to 27 and in the Chief Executive’s review on pages 4 to 14.
Results and dividends
The group’s consolidated profit and loss account set out on 
page 45 shows an increase of 12% in group operating profit
before goodwill amortisation from £414.2 million to £463.9
million. An analysis of turnover and operating profit is given in
note 1 to the accounts on page 50. There are no significant post 
balance sheet events.
Shareholders were paid the 2002 interim dividend of 5.0 pence 
per share (2001: 4.55 pence) on 31 July 2002. The directors
recommend a final dividend of 13.90 pence per share (2001: 
12.35 pence) making a total dividend for the year of 18.90 pence
per ordinary share, an increase of 11.8% on the 16.90 pence paid
in respect of last year. Payment of the recommended final dividend,
if approved at the annual general meeting, will be made on 
31 January 2003 to shareholders registered at the close of business
on 6 January 2003.
The directors of Wolseley QUEST Limited have waived their right to
receive dividends in respect of the 2001/2 financial year and future
years on the shares held by that company under the Wolseley
Savings Related Share Option Scheme. For the year ended 31 July
2002, this amounts to £8,157 (2001: £3,754).
The company’s dividend reinvestment plan will continue to be
available to shareholders. Shareholders who do not currently
participate in the plan and wish to do so can obtain an application
form and explanatory booklet from the company’s registrars, Lloyds
TSB Registrars. Contact details for the registrars are shown on page
79. The latest date for receipt of new applications to participate in
respect of the 2002 final dividend is 10 January 2003.
Acquisitions and disposals
Details of acquisitions and disposals made during the year are
contained in the Operating and financial review on page 24 
and in note 23 on pages 62 and 63.
Future development
It remains your board’s intention to develop the group through
organic growth and by selective acquisitions.
Share capital
At the date of this report, 577,949,907 ordinary shares of 25
pence each have been issued and are fully paid up and are 
quoted on the London Stock Exchange. In addition, the company
has entered into a level II American Depository Receipt programme
with the Bank of New York under which the company’s shares are
traded in the form of American Depository Shares on the New York
Stock Exchange. During the year ended 31 July 2002 options were
exercised pursuant to the company’s share option schemes
resulting in the allotment of 1,646,439 new ordinary shares. No
new ordinary shares have been allotted under these schemes since
the end of the financial year. Full details of these issues including,
where appropriate, the amounts subscribed for new shares are set
out in note 20 to the accounts on pages 59 to 61 which also
contain details of options granted over unissued capital.
The limited power granted to the directors at last year’s annual
general meeting to allot equity shares for cash other than pro rata
to existing shareholders expires on 13 March 2003. Your directors
recommend (Resolution 9 in the Notice of Meeting which
accompanies this report) that this authority should be renewed so
as to give them the ability (until the annual general meeting to be
held in 2003) to issue ordinary shares for cash, otherwise than pro
rata to existing shareholders, in connection with a rights issue or
up to a limit of 5% of the ordinary share capital issued at the date
of this report. Your directors have no present intention to issue
ordinary shares (other than pursuant to the company’s employees’
share schemes). The directors recommend that you vote in favour
of Resolution 9 to maintain the company’s flexibility in relation to
future share issues, including any issues to finance business
opportunities should appropriate circumstances arise.
31 Wolseley plc Annual report and accounts 2002 Report of the directors continued
A special resolution will also be proposed (Resolution 10 in the
Notice of the Meeting) to renew the directors’ limited authority 
last granted in 2001 to repurchase ordinary shares in the market.
The directors stated at the extraordinary general meeting held on
14 April 1989 that a resolution seeking shareholders’ renewal of
this authority would be proposed at the next and each succeeding
annual general meeting. The authority will be limited to a
maximum of 57,794,990 ordinary shares (10% of the company’s
issued share capital at the date of this report) and it also sets the
minimum and maximum prices which may be paid. The authority
will enable your directors to continue to respond promptly should
circumstances arise in which they consider such a purchase would
result in an increase in earnings per share and would be in the 
best interests of the company.
The directors consider it desirable for these two general
authorisations to be available to provide flexibility in the
management of the company’s capital resources.
Substantial share interests
The following interests of 3% or more in the issued ordinary share
capital appeared in the register maintained under the provisions 
of section 211 of the Companies Act 1985.
% as at 24 
Name September 2002 
Sprucegrove Investment Management Limited 3.19 
Barclays PLC 3.01 
Legal & General Investment Management Limited 3.00 
Directors
Brief particulars of the present directors are listed on pages 28 
and 29. David Tucker, a non-executive director, left the board on 
12 April 2002. On the same date, James Murray was appointed 
as a non-executive director.
Richard Ireland, who is not standing for re-election, will leave 
the board at the conclusion of the annual general meeting. John
Whybrow will succeed Richard Ireland as Chairman following 
the conclusion of the meeting.
The directors standing for re-election at the annual general meeting
are John Allan, Andrew Hutton and Robert Walker. Each director,
being eligible, offers himself for re-appointment. In addition, James
Murray will stand for election following his appointment to the
board in April. Andrew Hutton’s service contract is terminable by 
6 months’ notice given by him and by 12 months’ notice given 
by the company. Messrs Allan, Murray and Walker, as non-executive
directors, do not have service contracts with the company.
Directors’ interest in shares
The register kept by the company pursuant to section 325 of the
Companies Act 1985 shows that the directors in office at 31 July
2002 and their families had the undermentioned interests in the
ordinary shares of the company.
31 July 2002 1 August 2001 
or on appointment 
J M Allan 5,000 5,000 
C A Banks 89,344 89,344 
J R Descours 16,600 – 
F N Hord 82,200
1
24,000 
C S Hornsby 6,800 800 
A J Hutton 50,656 31,032 
R Ireland 93,387
2
97,093
2
J I K Murray 2,500
3
– 
R M Walker 1,971 1,971 
S P Webster 16,891 16,891 
J W Whybrow 35,000
4
11,519
Note:
1. Mr Hord sold 30,000 shares on 4 October 2002.
2. Includes 41,410 (2001: 42,775) non-beneficial.
3. A further 2,500 shares were purchased on 26 September 2002.
4. A further 10,000 shares were purchased on 25 September 2002.
32 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
Compliance with the Combined Code
The board is committed to high standards of corporate governance
throughout the group. The board is accountable to the company’s
shareholders for good governance and this statement describes
how the board applies the principles of good governance set out 
in the Combined Code (as appended to the Listing Rules of the
Financial Services Authority).
The board
As at 31 July 2002 the board of directors was made up of 11
members comprising the Chairman, six executive directors and four
non-executive directors. The non-executive directors are considered
by the board to be independent of management and free of any
relationship which could materially interfere with the exercise of
their independent judgement. David Tucker stepped down from
the board on 12 April 2002. At the same time, James Murray was
appointed as a non-executive director and John Whybrow became
Deputy Chairman. John Whybrow will succeed Richard Ireland
when he retires at the conclusion of the annual general meeting.
Biographical details of the directors are shown on pages 28 and
29. The board met regularly during the year and has a formal
schedule of matters reserved to it for its decision. In addition, 
the board has established a procedure for directors to take, if
necessary, independent professional advice at the company’s
expense in the furtherance of their duties. This is in addition to the
access which every director has to the Company Secretary who is
charged with ensuring that board procedures are followed. The
differing roles of Chairman and Chief Executive are acknowledged
and set out in writing.
The company’s articles of association provide that one-third of the
directors retire by rotation each year and that each director will
seek re-election at the annual general meeting every three years.
Additionally, new directors are subject to election by shareholders
at the first opportunity after their appointment.
It is board policy that non-executive directors do not generally 
serve on the board for more than nine years. In cases where it is
proposed to exceed this period the director concerned will retire
annually and offer himself for re-election.
The board has established a number of committees, each of 
which has formal terms of reference approved by the board and
complying with the Combined Code to assist in the discharge of its
duties. Members of the various committees are shown on page 79.
The Company Secretary acts as secretary to all board committees.
Executive committee
The executive directors of the company meet formally at least nine
times each year, usually on the day before formal board meetings.
The committee addresses business issues and shares best practice
thereby allowing the directors more time at board meetings to
focus on strategy.
Audit committee
The committee comprises the Chairman and two non-executive
directors and has, since David Tucker stepped down on 12 April
2002, been chaired by James Murray. It meets at least twice each
year. Its role is to review the scope, results and cost-effectiveness of
the audit, the effectiveness of the group’s internal control systems
and risk management procedures, and the form and content of the
group’s financial statements, compliance controls and accounting
policies and practices. The independence and objectivity of the
external auditor is also regularly considered, with particular regard
to the level of non-audit fees.
Remuneration committee
The committee comprises three non-executive directors. The
Chairman of the committee is John Whybrow. The committee is
responsible for making recommendations to the board, within
agreed terms of reference, on the company’s framework of
executive remuneration and its cost. It also determines, on behalf
of the board, specific remuneration packages for each of the
executive directors and for the Chairman, and administers the
company’s share incentive schemes for senior employees. The
board itself determines the remuneration of the non-executive
directors, having received recommendations from the
appointments and salaries committee. The board’s remuneration
report is set out on pages 40 to 44.
Treasury committee
The committee comprises the Chairman and one non-executive
director, the Chief Executive, the Group Finance Director and the
Group Treasurer. Richard Ireland is the Chairman of the committee.
Its role is to consider treasury policy, tax matters and certain
transactions on behalf of the group within a framework delegated
by the board.
33 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
Capital committee
The committee comprises any two directors, one of whom must be
either the Chairman or the Chief Executive. It has defined authority
to review and approve certain capital expenditure applications,
including acquisitions, and certain disposals.
Appointments and salaries committee
The committee comprises any two directors of the company, one of
whom must be either the Chairman or the Chief Executive. Its role
is entirely independent of that of the remuneration committee and
includes the review and recommendation to the board on the fees,
and terms of engagement, of the non-executive directors.
Nominations committee
The committee comprises three non-executive directors and is
chaired by Richard Ireland. It is responsible for considering and
recommending to the board changes in the board’s composition
and membership.
Internal controls
In a highly decentralised group, where local management has
considerable autonomy to run and develop their businesses, a 
well designed system of internal control is necessary to safeguard
shareholders’ investment and the company’s assets. The directors
acknowledge that they have overall responsibility for the group’s
systems of internal control and for reviewing their effectiveness.
In accordance with the guidance set out in the Turnbull Report
“Internal Control: Guidance for Directors on the Combined Code”,
an ongoing process has been established for identifying, managing
and evaluating the risks faced by the group. This process has been
in place for the full financial year and up to the date on which the
financial statements were approved. The systems are designed to
manage rather than eliminate the risk of failure to achieve the
group’s objectives, safeguard the group’s assets against material
loss, fairly report the group’s performance and position and to
ensure compliance with relevant legislation, regulation and best
practice including that related to social, environmental and ethical
matters. The systems provide reasonable, not absolute, assurance
against material misstatement or loss. Such systems are regularly
reviewed by the board to deal with changing circumstances. A
summary of the key financial risks inherent in the group’s business
is given on pages 25 to 27. Risk assessment and evaluation is 
an integral part of the annual planning cycle. Each business 
documents the strategic objectives and the effectiveness of the
group’s systems of internal control. As part of this review, each
business area and function has been required to identify and
document each significant risk, together with the mitigating actions
implemented to manage, monitor and report to management on
the effectiveness of these controls. Senior managers are also
required to sign bi-annual confirmations of compliance with key
procedures and to report any breakdowns in, or exceptions to,
these procedures. Summarised results have been presented to
senior management and to the audit committee. The board has
reviewed the effectiveness of the group’s system of internal control
for the year under review. A summary of the principal control
structures and processes in place across the group is set out below.
Control structures
Whilst the board has overall responsibility for the group’s system of
internal control and for reviewing its effectiveness it has delegated
responsibility for the internal control and risk management
programme to the Group Finance Director. The detailed review of
internal control and risk management has been delegated to the
audit committee.
The management of each group company is responsible for internal
control and risk management within its own business, and for
ensuring compliance with the group’s policies and procedures.
Each group company has appointed a risk director whose primary
role in such capacity is to ensure compliance by local management
with the group’s risk management and internal control programme.
The external auditors have reviewed the overall approach adopted
by the group towards its risk management activities so as to
reinforce these internal control requirements.
Control processes
The board reviews its strategic plans and objectives on an annual
basis, and approves group company budgets and strategies in light
of these. Control is exercised at both group and subsidiary board
level through monthly monitoring of performance by comparison
to budgets, forecasts and cash targets, and by regular visits to
group companies by the Chief Executive and Group Finance
Director. Twice a year group companies approve and submit risk
reports to the audit committee, summarising the key risks facing
their businesses and the controls in place to manage those risks.
These reports, together with reports on internal control and
departures, if any, from established group procedures prepared by
the group’s external auditors, are reviewed by the Group Finance
Director and the audit committee.
34 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
Group companies submit annual risk and internal control
representation letters to the Group Finance Director on internal
control and risk management issues, with comments on the control
environment within their operations. The Group Finance Director
summarises these submissions for the audit committee. The
chairman of the audit committee reports to the board on risk
management and internal control matters following each audit
committee meeting.
The board has formal procedures in place for the approval of
investment and acquisition projects, with designated levels 
of authority, supported by post investment review processes for
selected acquisitions and major capital expenditure. The board
considers social, environmental and ethical matters in relation 
to the group’s businesses and assesses these when reviewing the
risks faced by the group. The board is conscious of the effect 
such matters may have on the short and long-term value 
of the company.
The audit committee meets the external auditors at least twice a
year without the presence of executive management. The audit
committee also reviews issues of accounting policy and
presentation for external financial reporting and ensures that 
an objective and professional relationship is maintained with the
external auditors. The external auditors attend the audit committee
meetings and receive its papers.
The audit committee has also approved the introduction of a group
policy under which the external auditors will not, as a general rule,
provide consulting services. The external auditors will provide audit
related services such as regulatory and statutory reporting as well
as formalities relating to shareholder and other circulars. The
external auditors report to the committee any material departures
from group accounting polices and procedures that they identify
during the course of their audit work. The external auditors will
often undertake due diligence reviews and provide assistance on
tax matters given their knowledge of the group’s businesses. Such
provision will, however, be assessed on a case by case basis so 
that the best placed adviser is retained. The audit committee will
monitor the application of the policy in this regard and will keep
the policy under review. 
Internal audit
The board confirms that it has continued to review the need 
for a discrete internal audit function and that steps are now being
taken to create this function within the group. It is expected that
the internal audit function will be fully operational by 31 July 2003.
Compliance statement
The company applied the principles set out in section 1 of the
Combined Code for the period under review and has, throughout
the year, complied with the detailed provisions set out therein with
the following two exceptions:
• The board has considered the nomination of a senior 
independent non-executive director but believes that, given 
the size and composition of the board, and the quality of the 
board’s independent non-executive directors, such a nomination
is not appropriate.
• Following the introduction of a new directors’ bonus scheme
with effect from 1 August 2000, the pensionable salary of one
executive director includes his bonus up to a maximum amount.
The auditors, PricewaterhouseCoopers, are required to review
whether the above statement reflects the company’s compliance
with the seven provisions of the Combined Code specified for its
review by the Listing Rules and to report if it does not reflect such
compliance. No such report has been made.
New York Stock Exchange 
corporate governance requirements
On 1 August 2002 the board of the New York Stock Exchange, Inc.
(“NYSE”) approved a set of measures to strengthen corporate
accountability. Whilst the company is not required to comply with
these measures as it is a private foreign issuer, it does comply 
in all material respects with those standards. The main areas of
non-compliance are set out below.
The NYSE standards require the majority of directors to be
independent. There are currently four independent directors on
Wolseley’s board. Whilst the independent directors meet informally
without management being present, this is not formalised. The
nominations committee will be comprised entirely of independent
directors when Richard Ireland steps down from the board in
December 2002. The audit committee currently meets at least
35 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
twice a year and reviews annually the role of the external auditors.
Under the new NYSE standards the committee would have 
the sole authority to approve audit fees, significant non-audit
engagement terms and to retain and terminate auditors (subject 
to shareholders’ approval). The company is to introduce an 
internal audit function which is expected to be fully in place by 
31 July 2003. There is no current group wide code of business
conduct and ethics although each business has its own code. The
compliance statement referred to in the preceding section relates
solely to compliance with UK corporate governance standards.
Communications with shareholders
The company places considerable importance on communication
with its shareholders, including its employee shareholders. The
Chief Executive and Group Finance Director are closely involved 
in investor relations and a senior executive has day-to-day
responsibility for such matters. The Report and Accounts are
available to all shareholders. Shareview is a new internet service
offered by the company’s registrars, Lloyds TSB Registrars.
Shareholders can access their shareholder account and choose to
receive shareholder communications electronically, rather than by
post. To register, access www.shareview.co.uk. Shareholders will
need their shareholder reference number which is shown on the
enclosed form of proxy.
There is regular dialogue with institutional shareholders and this
has been extended to private shareholders through the annual
general meeting and meetings with shareholder representatives.
The group’s preliminary and interim results, as well as all
announcements issued to the London and New York Stock
Exchanges, are published on the company’s website
www.wolseley.com. The company issues regular trading updates 
to the market and these, together with copies of presentations to
analysts and interviews with the Chief Executive and Group Finance
Director, are posted on the website. Notice of the annual general
meeting is circulated to all shareholders at least 20 working days
before such meeting. It is company policy not to combine
resolutions to be proposed at general meetings. All shareholders
are invited to the company’s annual general meeting at which 
they have the opportunity to put questions to the board and it is
standard practice to have the chairmen of the audit, nominations
and remuneration committees available to answer questions.
Details of proxy voting are made available at the meeting and are
published on the company’s website shortly after the meeting.
Environment
The principal activities of the Wolseley group involve the distribution
of plumbing and heating products, building materials and lumber
products, and industrial pipes, valves and fittings. The environmental
impact of these distribution activities in themselves is low compared
to many other industries. Nonetheless, the group recognises the
importance of environmental responsibility and the impact that its
operations have on the environment, and believes strongly that
good environmental practice makes good business sense.
Wolseley is in the process of considering the results of a
benchmarking study, which has been undertaken in respect of 
the group’s principal European operations. This will enable the
formulation of a more detailed environmental policy on a group
basis and the development of a consistent set of group wide
environmental standards. The study and formulation of group
policies will give added momentum to the environmental
programmes of each of the companies in the group, which 
already have their own policies, and will allow the company 
to more effectively manage the process.
Central to the group’s success has been the high degree of
autonomy afforded to local managements, allowing them to serve
the markets in which they operate in the most appropriate manner.
Within this decentralised structure the board has set down a
number of environmental principles with which the group’s
businesses are required to comply.
The principles cover the integration of environmental management
into business operations and a commitment to strive for continual
improvement, a commitment to prevent pollution, and a
requirement that all group companies comply fully with local
environmental legislation.
These principles are applied within the group’s businesses in many
different ways. The following examples are representative.
Lumber
Wolseley’s building materials distribution business in the USA,
Stock Building Supply, is scrupulous in sourcing its lumber from
second and third growth timberlands that are managed using best
forestry practices. As a market leader in the USA, it is well aware of
its responsibilities towards the environment. It is a central principle
of the company that the products it sells are both top quality and
provided by proactive stewards of forestry resources. Stock Building
Supply primary sources for lumber and wood panels are the major
integrated producers in North America, which all have
36 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
sophisticated and accepted timberland management plans. Smaller
suppliers must have a positive track record of providing quality
products sourced from ethical producers, before being recognised
as a potential supply line.
Outside North America, Stock Building Supply suppliers include
companies such as Royal Mahogany of Costa Rica, which has an
exceptional reputation for sustainable management of hardwood
plantations, and in Chile, a number of radiata pine moulding
producers who draw solely from managed plantation forests.
In addition, Stock Building Supply works closely with its supplier
partners to develop innovative composite components made 
of recycled and wood-substitute products, such as cement fibre
sidings and trim and extruded PVC mouldings, and is active 
in promoting these products to its customers. 
Waste management
In the UK, Wolseley Centers has now employed a specialist waste
contractor to manage its waste output at its major distribution
sites. Waste at these sites is divided into different streams, with 
all cardboard, plastic and wood waste being sold for reprocessing,
rather than sent to landfill. Wolseley Centers is in the process 
of seeking proposals for similar waste management at all sites 
in the UK.
OAG in Austria has a similar waste management strategy operating
across all sites. Their ‘abfallwirtschafts-konzept’, in place since late
1994, is an organisation wide programme that streams waste for
collection and reprocessing by specialist contractors. As well as
benefiting the environment, the programme generates significant
cost savings for OAG, ranging between d0.2 million – d0.3 million
per annum.
Environmental management 
Wolseley Centers in the UK is currently reviewing and updating its
environmental strategy. The first two stages of this strategy are to
ensure that the policy reflects Wolseley Centers’ commitment and
that there are systems and processes in place that ensure that the
strategy exceeds that required for legal compliance. The strategy
will be continuously reviewed.
Transport
Since early 1999, Ferguson in the USA has been using transport
management software to optimise the movements of its delivery
fleet. The programme analyses incoming orders and the
corresponding delivery locations, and designs runs with minimal
mileage. The number of miles travelled by its delivery fleet have
reduced by 9% – some 790,000 miles in this past year alone –
with corresponding reductions in vehicle emissions, vehicle wear
and fuel costs.
Donations
The group’s charitable donations in 2002 totalled £648,899 
(2001: £711,555). The group made no political donations.
The Political Parties, Elections and Referendums Act 2000 defines
EU political organisations widely, and whose activities may form
part of normal relationships between companies and the political
machinery, even though such activities are not designed to affect
public support for a particular party or influence support for 
any party.
The group made no political donations in 2002 and does not make
what are commonly regarded as political donations. The group will
continue this policy. The group may, however, need as part of its
business to contact politicians and political parties within the EU 
on a non-partisan basis in order to make them aware of industry
views, technology and trends. In the UK, employees may serve as
local councillors who are permitted time off by their employer. The
definitions of political donations and EU political expenditure have
been drafted so broadly that some such activities may fall within
the Act, even though they are not “donations” in the ordinary
sense of the word. The Act requires companies to obtain
shareholder approval before such expenditure or donations in
excess of certain limits may be made. The directors, therefore,
propose on a precautionary basis, to seek authority for the group
to make donations and incur expenditure which they might
otherwise be prohibited from making or incurring under the 
terms of the Act. Among other things, the Act requires that this
authorising resolution should not purport to authorise particular
donations or expenditure and requires any donations to EU political
organisations or any EU political expenditure in excess of £200 to
be disclosed in the annual report. The directors consider that the
authority sought under the resolution to allow the company or its
subsidiaries to incur this type of expenditure of not more than
£125,000 in total until the company’s next annual general meeting
is necessary to ensure that, because of the uncertainty over which
bodies are covered, the company does not unintentionally breach
the Act. The policy of not giving any cash contribution to any
political party will continue. The authority sought by Resolution 12
will last until the company’s next annual general meeting.
37 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
Awards under employee share schemes
Options were granted under the US Employee Share Purchase 
Plan in March 2002 to 3,274 US based employees in respect of 
a maximum 530,169 ordinary shares exercisable at 597 pence per
share. Options were granted under the UK Employees Savings
Related Share Option Scheme in June 2002 to 1,954 employees in
respect of a maximum 650,894 ordinary shares exercisable at 562
pence per share. Options were granted under the Irish Sharesave
Scheme in June 2002 to 74 employees in respect of a maximum
24,890 ordinary shares exercisable at 562 pence per share. In
November 2001 options were granted under the 1984 and 1989
Executive Senior Executive Share Option Schemes over 88,200 and
2,301,300, respectively, ordinary shares to senior employees of the
group at an option price of 467 pence per share. These schemes
are described on pages 42 to 44. Details of the total options
outstanding at 31 July 2002 are set out in note 20 to the 
financial statements. Details of the awards under the Long Term
Performance Related Incentive Plan for Mr Banks are on page 41.
Employee policies and involvement
The group places particular importance on the involvement of its
employees, keeping them regularly informed through informal
bulletins, meetings and the company’s internal website, on matters
affecting them as employees and on the issues affecting their
performance. A European Works Council was established in 1996
to provide a forum for consultation with employees on significant
developments in the group’s operations, management’s plans and
expectations, organisational changes within the group and for
employee representatives to consult management about concerns
over any aspect of the group’s operations. At the date of this
report, there are 14 members comprising 10 employee
representatives elected from among employees from each
European company.
Permanent UK employees are usually invited to join the company’s
pension arrangements including the defined benefit pension
scheme, which has two individual and one corporate trustee. The
Chairman of the trustees is Richard Ireland and all but one of the
other directors of the corporate trustee are UK based employees of
the group. Permanent employees outside the UK are usually offered
membership of their employing companies’ pension arrangements.
Employees are offered a range of benefits depending on the local
environment, such as private medical cover.
Employees are encouraged to become shareholders in the
company, where possible, through participation in the company’s
share schemes. Priority is given to the training of employees and
the development of their skills is of prime importance. Employment
of disabled people is considered on merit with regard only to the
ability of any applicant to carry out the function required.
Arrangements to enable disabled people to carry out the function
required will be made if it is reasonable to do so. An employee
becoming disabled would, where appropriate, be offered
retraining. The group continues to operate on a highly
decentralised basis. This provides the maximum encouragement 
for the development of entrepreneurial flair, balanced by a rigorous
control framework exercised by a small head office team. Local
managements are responsible for maintaining high standards 
of health and safety and for ensuring that there is appropriate
employee involvement in decision making.
Creditor payment policy
All group companies are responsible for establishing terms and
conditions of trading with their suppliers. It is the group’s policy
that payments to suppliers are made within agreed terms and,
where applicable, consistent with the CBI Prompt Payers Code.
Copies of this Code can be obtained from the Company Secretary
at the company’s registered office.
At 31 July 2002 the company had no trade creditors (2001: nil).
The amount of trade creditors for the group as at 31 July 2002 
was equivalent to 46 days (2001: 47 days) of trade purchases.
Shareholder services
Existing and potential UK shareholders may acquire shares in the
company through UK Individual Savings Accounts, which are
managed by ISA managers. Details are given on page 80 of
Shareview, a service launched by our registrars, Lloyds TSB
Registrars, which allows shareholders on-line access to a range 
of shareholder information. Shareview provides access to details 
of shareholdings in the company and practical help on transferring
shares or updating personal details. First time users will need to
enter certain information and choose a PIN number before they 
are able to access their shareholding details.
38 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Corporate Governance
CREST
The company’s ordinary shares are in CREST, the settlement system
for stocks and shares.
Auditors
PricewaterhouseCoopers are willing to continue as auditors of the
company and a resolution concerning their re-appointment and 
the determination of their remuneration is to be proposed at the
annual general meeting.
Annual general meeting resolutions
The resolutions to be proposed at the annual general meeting to
be held on 13 December 2002, together with explanatory notes,
appear in the separate Notice of Annual General Meeting which
has been sent to all shareholders.
39 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Remuneration
The company’s statement on remuneration policy is set out below
together with details of the remuneration of each director.
The company’s policy is to provide remuneration packages that
fairly reward executives for the contribution they make to the
business, having regard to the size and complexity of the group’s
business operations and the need to attract, retain and motivate
executives of appropriate calibre. Remuneration packages comprise
salary, performance-related bonuses, share options, pensions and
benefits. Benefits include a car or car allowance, life insurance,
medical cover and, in the case of Charles Banks and Stephen
Webster, relocation and housing allowances following, respectively,
their relocations from the USA to the UK and from Droitwich to
Theale, where the company’s head office is now located.
Additionally, a cash based long-term incentive plan was introduced
in 2001 for Charles Banks to specifically facilitate his recruitment as
Chief Executive from 3 May 2001. The company has followed the
provisions of Schedules A and B of the Combined Code both 
in framing its remuneration policy and in preparing this report.
Salaries
Basic salaries are determined having regard to competitive market
data relative to the markets in which the group and executive
directors operate, as obtained from remuneration and benefits
surveys and other available external data, the degree of individual
responsibility, individual performance and after giving consideration
to the wider economic and employment backdrop, including
general pay and employment conditions elsewhere in the group.
The remuneration committee reviewed the salaries of the executive
directors with effect from 1 August 2001.
Performance bonuses
Performance bonus arrangements are designed to encourage
individual performance, corporate operating efficiencies and
profitable growth, thereby enhancing shareholder value.
A new annual bonus scheme was introduced for certain executive
directors with effect from 1 August 2000. The scheme, and the
level of payment, is intended to provide a more direct link to
annual performance and depends on performance against annual
targets of profits and cash flow of the group and, where relevant,
the appropriate division. The new scheme applied to Charles Banks
and Claude Hornsby from 1 August 2001, each previously having
participated in the Ferguson bonus scheme. For the first year of
their participation in the new bonus arrangements, being the year
ended 31 July 2002, a transitional minimum bonus of US$420,000
and US$400,000 respectively was guaranteed. This had been
designed to provide some level of earnings protection for the first 
year of participation in the new arrangements. Bonuses are
generally non-pensionable. In the case of Mr Hord, however, 
it has been agreed that in order to preserve his pension entitlement
at the date the new scheme was introduced, his bonus up to a
maximum of US$742,400 would remain pensionable.
Emoluments
The emoluments for 2001 and 2002 of the directors who served
during the year are set out below:
Salary 2002 2001
& fees Bonuses Benefits Total Total
Directors’ remuneration £000 £000 £000 £000 £000 
Chairman
R Ireland 155 – 3 158 544 
Executive directors
C A Banks 721 536 172
1
1,429 1,201 
J R Descours 275 67 2 344 298 
F N Hord 456 487 1 944 887 
C S Hornsby 343 542 17 902 175
2
A J Hutton 300 110 15 425 365 
S P Webster 305 106 28
3
439 401 
Non-executive directors 
J M Allan 29 –– 29 28 
J I K Murray
4
10 –– 10 – 
D L Tucker
5
19 –– 19 28 
R M Walker 29 –– 29 28 
J W Whybrow 29 –– 29 28 
Total 2,671 1,848 238 4,757 3,983
Pensions to former directors ––– 329 336 
Pension contributions to 
money purchase plans ––– 322 287 
Aggregate gains on exercise 
of share options ––– 186 178 
Total 837 801
2002 2001
Highest paid director £000 £000 
Aggregate emoluments 
and gains on share options 1,429 1,293
Notes:
1. £128,000 of the figure for benefits relates to relocation from the USA to the UK.
2. Claude Hornsby was appointed on 3 May 2001.
3. £9,000 of the figure for benefits relates to relocation from Droitwich to Theale.
4. from 12 April 2002.
5. to 12 April 2002.
40 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Remuneration
Service agreements
All current service agreements with executive directors are subject
to a maximum of 12 months’ notice of termination if given by the
company and six months’ notice of termination if given by the
executive director. Messrs Banks, Hord and Hornsby do not 
have service agreements with the company or any subsidiary
undertaking. 
There are no provisions in any service agreement for early
termination payments. In the event of early termination of any
service agreement, the remuneration committee will take a robust
view of the mitigation which should be taken into account when
computing any compensation payable.
Long-term cash incentive plan
The object of the long-term cash incentive plan, which was
specifically introduced to facilitate Charles Banks’ recruitment 
as Chief Executive in 2001, is designed to provide a cash bonus
conditional upon the company’s total shareholder return (“TSR”)
over three years. The company’s TSR is compared to the TSR of 
a defined list of comparator companies. For the first award, which
was made with effect from 1 August 2001, the list is, in the main,
based on the constituent members of the FTSE 100 as at that date
excluding bank, telecommunications and utility companies. The
maximum sum payable for the three years ending 31 July 2004 
is 50% of Mr Bank’s basic annual salary on 1 August 2001. This
maximum will only be payable if the company’s TSR over the
performance period is in the top decile of the comparator group.
No amount is payable if the company’s comparative TSR
performance is ranked at, or below, the median and the vesting
percentage will be determined on a linear basis for intermediate
rankings. Mr Banks’ second award under the long-term incentive
plan was made with effect from 1 August 2002 on an identical
basis to the award made on 1 August 2001 (save that it was 
based on 50% of salary as at 1 August 2002). As part of these
arrangements one further grant will be made under the plan with
effect from 1 August 2003.
In order to more closely align the interests of the executive
directors and senior executives with those of the shareholders over
the long-term the board proposes the introduction of another long
term incentive plan, further details of which are set out in the
separate Notice of Annual General Meeting which accompanies
this report. It is intended that the new plan will operate on a
similar basis to the above-noted plan save that participants will 
be the executive directors and other senior management.
Pensions
UK executive directors participate in the Wolseley Group
Retirement Benefits Plan (“the Plan”). The Plan is a defined benefit
scheme and provides benefit based on final pensionable salaries.
Group companies make contributions to the Plan based on the
recommendation of the Plan actuary. UK executive directors
contribute 5% per annum of pensionable salary to the Plan.
Bonuses payable to UK executive directors are not pensionable.
The Finance Act 1989 introduced an earnings cap (“the Cap”) for
employees joining the Plan after 31 May 1989. This has the effect
of limiting the amount of an employee’s salary that can be
pensioned through an approved pension scheme. The limit is
currently £97,200 per annum. Stephen Webster is the only current
UK director who is subject to the Cap. The company has agreed 
to provide Mr Webster with benefits which are broadly comparable
with those that would have applied under the Plan had the Cap
not been introduced. Additionally, the Finance Act 1989 capped
life assurance payable through an approved pension scheme 
in respect of such executives. The company has taken out an
insurance policy to cover that part of the life assurance for Stephen
Webster which is in excess of the Cap. The amount charged to the
profit and loss account during the year in respect of this future
obligation was £55,004 (2001: £23,700).
Charles Banks and Claude Hornsby participate in the defined
contribution pension arrangements of Ferguson Enterprises. Fenton
Hord participates in the defined benefit and defined contribution
plans of Stock Building Supply. Jacques Descours participates in the
defined benefits pension arrangements of Brossette.
A US subsidiary undertaking has a commitment to a former director,
who is a United States citizen, to pay a joint survivor pension of
$300,000 per annum for fifteen years from 1 August 1993. The 
net present value of the future obligation at 31 July 2002 was
£0.993 million (2001: £1.1 million) which has been charged in
prior years’ accounts.
Additionally, Brossette, a French subsidiary undertaking, has a
commitment to a former director, who is a French citizen, to pay
an annual pension of f198,181, with a widow’s entitlement of
60%, subject to an annual increase based on the agreed French
pension index. The full actuarial cost of this arrangement was 
41 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Remuneration
provided in previous years as part of Brossette’s ongoing pension
obligations. The company is guarantor of this future pension
commitment which at 31 July 2002 was approximately £2.1 million
(2001: £2.1 million).
Fenton Hord is a member of a US non-qualified plan which, when
vested, will provide a benefit for 20 years after retirement at age
60 of 40% of final pensionable salary. At Mr Hord’s option, and
with company consent, the benefit can be paid over a period of 
5, 10 or 15 years with the total amount of the benefit, in cash
terms, being the same. The value of the benefit in the year to 
31 July 2002 reduced by some $349,000.
The following table shows the directors participating during the
year in other group defined benefits plans and the amounts of
pension entitlements earned, the accrued pension liabilities and the
changes therein. These pension liabilities are calculated using the
cash equivalent transfer value method prescribed in the Listing
Rules of the UK Listing Authority.
Increase in Total accrued Transfer value
accrued pension pension as at of the increase
during 2002 31 July 2002 during 2002
Pensions £000 £000 £000
J S Descours 14 75 153
A J Hutton 12 138 143
S P Webster 2 13 58
The transfer values shown are not payable to the individuals
concerned.
The following table shows those directors participating in 
money purchase pension plans and the cost of the group’s
contributions thereto:
2002 2001
Pensions: money purchase plans £000 £000
C A Banks 174 166 
F N Hord 6 8 
C S Hornsby 87 14* 
S P Webster 55 24
* Claude Hornsby was appointed on 3 May 2001.
Share options
The company operates executive share option schemes for
executive directors and other senior group executives. Such options
have not been and will not be granted at a discount to the relevant
middle market price at the time of grant.
The remuneration committee considers annually the levels of
grants, which are phased over time. The cumulative value of all
grants made under the schemes cannot exceed four times relevant
remuneration. An option becomes exercisable on the third
anniversary of the date of grant but, in respect of options granted
after 31 May 1994, it cannot be exercised unless a performance
test has been satisfied. Thereafter it may be exercised at any time
until it lapses, 10 years from the date of grant.
Options granted between May 1994 and December 1996 may not
be exercised unless the growth in earnings per share over a period
of three consecutive financial years exceeds the growth in the UK
retail price index over the same period by at least 6%.
Options granted in, and subsequent to, December 1997 may not
be exercised unless growth in earnings per share over a period of
three consecutive financial years exceeds growth in the UK retail
price index over the same period by at least 9%. In addition, the
number of options exercisable is determined by the return on
capital employed achieved over the same rolling three year period. 
42 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Remuneration
For options granted in 1997 and 1998, achieving a return on
capital employed of 15% per annum will enable 50% of options
granted to become exercisable, rising on a sliding scale to 100%
for achieving a return on capital employed of 20% or more. With
effect from October 1999 the return on capital employed required
to permit exercise of 100% of options granted was reduced from
20% to 17.5% and the sliding scale was adjusted accordingly. 
Directors’ share options 2001
The table below shows the number of share options held by
directors under the senior executive share option schemes as 
at 31 July 2002.
Executive share option schemes 
Options Options at Options at
Subscription exercisable 31 July 1 August
Name of director price between 2002 2001
C A Banks 350.25 1996-2003 19,200 19,200 
388.75 1997-2004 16,800 16,800 
440.00 1998-2005 14,500 14,500 
483.50 2000-2007 35,000 35,000 
381.00 2001-2008 25,000 25,000 
397.00 2002-2009 22,000 22,000 
349.75 2003-2010 50,000 50,000 
468.00 2004-2011 400,000 400,000 
467.00 2004-2011 150,000 – 
J R Descours 220.75 1995-2002 – 16,600 
350.25 1996-2003 7,200 7,200 
388.75 1997-2004 8,000 8,000 
433.00 1998-2005 8,300 8,300 
456.50 1999-2006 10,000 10,000
483.50 2000-2007 10,000 10,000 
381.00 2001-2008 25,000 25,000 
397.00 2002-2009 22,000 22,000 
349.75 2003-2010 50,000 50,000 
467.00 2004-2011 50,000 – 
F N Hord 350.25 1996-2003 – 11,200 
388.75 1997-2004 13,000 13,000 
440.00 1998-2005 13,000 13,000 
456.50 1999-2006 10,000 10,000 
483.50 2000-2007 10,000 10,000 
381.00 2001-2008 10,000 10,000 
397.00 2002-2009 12,000 12,000 
349.75 2003-2010 50,000 50,000
467.00 2004-2011 75,000 –
C S Hornsby 203.25 1995-2002 – 6,000 
220.75 1995-2002 8,000 8,000 
350.25 1996-2003 7,600 7,600 
388.75 1997-2004 8,000 8,000 
440.00 1998-2005 8,000 8,000 
456.50 1999-2006 8,000 8,000 
483.50 2000-2007 8,000 8,000 
381.00 2001-2008 8,000 8,000 
397.00 2002-2009 10,000 10,000 
349.75 2003-2010 15,000 15,000 
485.00 2004-2011 100,000 100,000 
467.00 2004-2011 75,000 – 
A J Hutton 388.75 1997-2004 – 16,800 
433.00 1998-2005 – 16,800 
483.50 2000-2007 35,000 35,000 
381.00 2001-2008 25,000 25,000 
397.00 2002-2009 22,000 22,000 
349.75 2003-2010 50,000 50,000 
467.00 2004-2011 75,000 – 
S P Webster 433.00 1998-2005 16,800 16,800 
483.50 2000-2007 35,000 35,000 
381.00 2001-2008 25,000 25,000 
397.00 2002-2009 22,000 22,000 
349.75 2003-2010 50,000 50,000 
467.00 2004-2011 75,000 –
Notes:
(a) The following exercises of options took place during the year:
(i) by Jacques Descours of executive share options on 17 December 2001 in respect
of 16,600 ordinary shares at an option price of 220.75 pence (closing middle
market price 538 pence);
(ii) by Fenton Hord of executive share options on 29 November 2001 in respect of
11,200 ordinary shares at an option price of 350.25 pence (closing middle market
price 493 pence);
(iii) by Claude Hornsby of executive share options on 29 November 2001 in respect of
6,000 ordinary shares at an option price of 203.25 pence (closing middle market
price 493 pence); and
(iv) by Andrew Hutton of executive share options on 21 March 2002 in respect of
16,800 ordinary shares at an option price of 433.0 pence and on 25 March 2002
in respect of 16,800 ordinary shares at an option price of 388.75 pence (closing
middle market price 700 pence on 21 March 2002 and 718 pence on 
25 March 2002).
(b) The highest mid-market price of the company’s ordinary shares during the year was
750 pence and the lowest was 376 pence. The year-end price was 573 pence.
The UK and US based executive directors may also participate in
the UK Savings Related Share Option Scheme (“SRSOS”) and the
Employee Share Purchase Plan (“ESPP”) respectively. Under the
SRSOS, participants who enter into a savings contract, to a
maximum level of £250 per month, are granted options to
subscribe for shares in the company. Under the ESPP , a US Code
423 Plan, US participants may enter into a savings contract to a
43 Wolseley plc Annual report and accounts 2002 Report of the directors continued
Remuneration
maximum level of $400 per month. The board may determine that
the options granted under either Scheme may be granted at a
discount. The maximum discount is 20% for the SRSOS and 15%
for the ESPP of the average market prices used to determine the
price of the award. The following table sets out the number of
share options held under the SRSOS and ESPP by the directors.
Savings related share option schemes 
Option Options at Options at
Subscription period 31 July 1 August
Name of director price expires in 2002 2001
C A Banks 562p 2005 1,690 – 
597p 2003 564 –
F N Hord 597p 2003 564 –
C Hornsby 597p 2003 564 –
A J Hutton 336p 2006 2,008 2,008
368p 2003 2,119 2,119 
409p 2004 2,860 2,860 
562p 2005 1,014 –
S P Webster 345p 2003 2,000 2,000 
368p 2003 3,179 3,179 
562p 2005 1,014 –
No savings related share options lapsed or were exercised during
the year. 
Non-executive directors
Non-executive directors are paid fees which are reviewed from 
time to time by the board. The non-executive directors do not
participate in any incentive plan nor is any pension payable in
respect of their services as non-executive directors.
On behalf of the board
M J White
Company Secretary
Wolseley plc, Registered No. 29846
Theale, Reading 
24 September 2002
Directors’ responsibility statement
The directors are required by UK company law to prepare financial
statements for each financial period which give a true and fair view
of the state of affairs of the company and the group and of the
profit or loss for that period.
Following discussions with the auditors, the directors consider that
in preparing the accounts, appropriate accounting policies have
been used and applied consistently, supported by reasonable and
prudent judgements and estimates, and that applicable UK
accounting standards have also been applied.
The directors are also responsible for maintaining adequate
accounting records which disclose with reasonable accuracy the
financial position of the company and the group which enable
them to ensure that the financial statements comply with the UK
Companies Act 1985.
The directors are responsible for the maintenance and integrity 
of the wolseley.com website. 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 financial statements since they were initially
presented on the website. Legislation in the UK governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
The directors have general responsibility for taking such steps as 
are reasonably open to them to safeguard the assets of the
company and the group and to prevent and detect fraud or 
other irregularities. The directors, having prepared the financial
statements, have permitted the auditors to take whatever steps and
undertake whatever inspections they consider to be appropriate for
the purpose of enabling them to give their audit opinion.
Going concern
A statement on the going concern basis of preparing the group
financial statements is included in the Operating and financial
review on page 27.
44 Wolseley plc Annual report and accounts 2002 Group proﬁt and loss account
year ended 31 July 2002
2002 2001
Notes £m £m £m £m
Turnover 1
Continuing operations 7,865.4 7,141.6
Acquisitions 102.2 –
7,967.6 7,141.6
Discontinued operations – 53.3
7,967.6 7,194.9
Operating profit before goodwill amortisation 1 463.9 414.2
Goodwill amortisation 3 (26.7) (17.8)
Operating profit
Continuing operations 434.5 392.7
Acquisitions 2.7 –
437.2 392.7
Discontinued activities – 3.7
1,2&3 437.2 396.4
Loss on disposal of operations – (70.0)
Profit on ordinary activities before interest 437.2 326.4
Net interest payable 4 (26.5) (35.2)
Profit on ordinary activities before tax 410.7 291.2
Taxation 5
Current tax charge (108.1) (102.8)
Deferred tax charge (14.4) (3.3)
(122.5) (106.1)
Profit after tax 288.2 185.1
Profit for the year attributable to ordinary shareholders 288.2 185.1
Dividends 6 (109.2) (97.4)
Profit retained 21 179.0 87.7
Earnings per share 7
Before goodwill amortisation and exceptionals 54.58p 47.43p
Goodwill amortisation (4.62)p (3.09)p
Exceptionals – (12.17)p
Basic earnings per share 49.96p 32.17p
Diluted earnings per share 49.46p 32.12p
45 Wolseley plc Annual report and accounts 2002 Balance sheets
as at 31 July 2002
The group The company
2002 2001 2002 2001
Notes £m £m £m £m
Fixed assets
Intangible assets 9 502.7 474.3 – –
Tangible assets 10 582.0 592.3 – –
Investments 11 0.1 0.2 1,487.5 1,487.6
1,084.8 1,066.8 1,487.5 1,487.6
Current assets
Stocks 12 1,050.9 1,093.8 – –
Debtors and property awaiting disposal 13 1,372.7 1,362.0 2,305.7 1,905.6
Construction loans receivable (secured) 14 171.4 215.5 – –
Investments 15 9.3 14.3 – –
Cash at bank, in hand and on deposit 204.9 243.4 70.6 77.3
2,809.2 2,929.0 2,376.3 1,982.9
Creditors: amounts falling due within one year
Short-term borrowings 16 252.2 274.4 289.1 199.3
Construction loans borrowings (unsecured) 14 171.4 215.2 – –
Other creditors 17 1,245.9 1,247.0 1,587.3 1,167.6
1,669.5 1,736.6 1,876.4 1,366.9
Net current assets 1,139.7 1,192.4 499.9 616.0
Total assets less current liabilities 2,224.5 2,259.2 1,987.4 2,103.6
Creditors: amounts falling due after one year
Borrowings 18 507.6 677.0 573.7 658.9
Provisions for liabilities and charges 19 117.0 85.8 – –
624.6 762.8 573.7 658.9
1,599.9 1,496.4 1,413.7 1,444.7
Capital and reserves
Called up share capital 20 144.5 144.1 144.5 144.1
Share premium account 21 169.1 161.9 169.1 161.9
Capital reserve 21 – – – 166.6
Profit and loss account 21 1,286.3 1,190.4 1,100.1 972.1
Shareholders’ funds 1,599.9 1,496.4 1,413.7 1,444.7
The accounts on pages 45 to 72 were approved by the board of directors on 24 September 2002 and were signed on its behalf by
C. A. Banks S. P . Webster
Group Chief Executive Group Finance Director
46 Wolseley plc Annual report and accounts 2002 Group cash ﬂow statement
year ended 31 July 2002
2002 2001
Notes £m £m
Net cash inflow from operating activities 26 584.1 518.0
Net cash outflow from returns on investments and servicing of finance 27 (22.5) (36.9)
Tax paid (119.6) (90.9)
Capital expenditure 27 (96.8) (108.8)
Acquisitions 24 (169.9) (400.6)
Purchase of minority interests – (1.5)
Disposals 25 8.2 13.0
Equity dividends paid (100.1) (90.8)
Cash inflow/(outflow) before use of liquid resources and financing 83.4 (198.5)
Management of liquid resources 27 1.4 (6.0)
Financing 27 (98.8) 254.0
(Decrease)/increase in cash in period (14.0) 49.5
Reconciliation of net cash flow to movement in net debt 28
(Decrease)/increase in cash in period (14.0) 49.5
Cash flow from decrease/(increase) in debt and lease financing 106.4 (248.5)
Cash flow from (decrease)/increase in liquid resources (1.4) 6.0
Change in net debt resulting from cash flows 91.0 (193.0)
New finance leases (2.6) (4.8)
Translation difference 59.7 (41.6)
Movement in net debt in period 148.1 (239.4)
Opening net debt (693.7) (454.3)
Closing net debt (545.6) (693.7)
Group statement of total recognised gains and losses
year ended 31 July 2002
2002 2001
£m £m
Profit for the financial year 288.2 185.1
Currency translation differences (84.3) 35.6
Total recognised gains and losses for the financial year 203.9 220.7
47 Wolseley plc Annual report and accounts 2002 Accounting policies
year ended 31 July 2002
Basis of accounting
These consolidated financial statements are prepared under the
historical cost convention and in accordance with applicable UK
accounting standards.
Basis of consolidation
The group accounts include the results of the parent company 
and its subsidiary undertakings drawn up to 31 July 2002.
The trading results of businesses acquired, sold or discontinued
during the year are included in profit on ordinary activities from 
the date of effective acquisition or up to the date of sale or
discontinuance, unless provision therefor has been made in 
earlier years.
Foreign currencies
The trading results of overseas subsidiary undertakings are
translated into sterling using average rates of exchange ruling
during the relevant financial period. 
The balance sheets of overseas subsidiary undertakings are
translated into sterling at the rates of exchange ruling at 31 July.
Exchange differences arising between the translation into sterling
of the net assets of these subsidiary undertakings at rates ruling at
the beginning and end of the year are dealt with through reserves
as are exchange differences on foreign currency borrowings raised
to finance overseas assets. 
Exchange differences on financial instruments entered into for
foreign currency net assets hedging purposes are dealt with
through reserves. 
The cost of the company’s investments in overseas subsidiary
undertakings is translated into sterling at the rate ruling at the date 
of investment.
All other foreign currency assets and liabilities of the company and
its United Kingdom subsidiary undertakings are translated into
sterling at the rate ruling at 31 July except in those instances where
forward cover has been arranged, in which case this forward rate 
is used. 
Foreign currency transactions during the year are translated 
into sterling at the rate of exchange ruling on the date of the
transaction except when forward exchange contracts are in place,
when the forward contract rate is used. Any exchange differences
are dealt with through the profit and loss account.
Goodwill
Goodwill arises when the cost of acquiring subsidiary undertakings
and businesses exceeds the fair value attributed to the net assets
acquired. Prior to 1 August 1998, goodwill arising on consolidation
and purchased goodwill was written off to reserves. Following
publication of FRS 10, a revised policy for accounting for goodwill
was adopted with effect from 1 August 1998. Goodwill arising
from acquisitions completed on or after that date is capitalised and
amortised on a straight line basis over a period of not more than
20 years. Goodwill arising on acquisitions prior to 1 August 1998
has not been reinstated on the balance sheet. 
The net assets of businesses acquired are incorporated in the
consolidated accounts at their fair value to the group. Fair value
adjustments principally relate to adjustments necessary to bring 
the accounting policies of acquired businesses into line with those 
of the Wolseley group but may also include other adjustments
necessary to restate assets and liabilities at their fair values at the
date of acquisition. All businesses acquired are consolidated using
the acquisition method of accounting.
Turnover
Turnover is the amount receivable for the provision of goods 
and services falling within the group’s ordinary activities, excluding 
intra-group sales, trade discounts, value added tax and similar 
sales taxes.
48 Wolseley plc Annual report and accounts 2002 Accounting policies
year ended 31 July 2002
Leased assets
Where fixed assets are financed by leasing agreements which give
rights approximating to ownership, the assets are treated as if 
they had been purchased and the capital element of the leasing
commitments is included in borrowings. The rentals payable are
apportioned between interest, which is charged to the profit 
and loss account, and capital, which reduces the outstanding
obligation. The cost of operating leases is charged on a straight 
line basis over the period of the lease.
Depreciation
Depreciation is provided on all tangible fixed assets (except freehold
land) mainly on a straight line basis to write off the cost of those
assets over their estimated useful lives. The principal rates of
depreciation are: freehold buildings and long leaseholds, 2%; short
leaseholds, over the period of the lease; plant and machinery, 10-
15%; fixtures and fittings, 15%; computers, 20-100% and motor
vehicles, 25%.
Real property awaiting disposal
Real property awaiting disposal is transferred to current assets at
the lower of book written down value and estimated net realisable
value. Depreciation is not applied to real property awaiting disposal,
but the carrying value is reviewed annually and written down
through the profit and loss account to current estimated net
realisable value if lower.
Stocks
Stocks are valued at the lower of group cost and net realisable
value, due allowance being made for obsolete or slow moving
items. Raw materials, bought out components and goods
purchased for resale are stated at cost on a first in, first out basis. 
Taxation
Provision is made for deferred taxation in so far as a liability or
asset has arisen as a result of transactions that had occurred by 
the balance sheet date and have given rise to an obligation to pay
more tax in the future, or the right to pay less tax in the future. 
An asset is not recognised to the extent that the transfer of
economic benefits in the future is uncertain. Deferred tax assets
and liabilities recognised are not discounted.
Provision is made for UK or foreign taxation arising on the
distribution to the UK of retained profits of overseas subsidiary
undertakings where dividends have been recognised as receivable.
Pensions and post retirement benefits
The expected costs of providing retirement pensions under defined
benefit plans and other post retirement benefits are charged to 
the profit and loss account over the periods benefiting from the
employees’ services in accordance with the recommendations of
independent qualified actuaries. Variations from expected costs 
are normally spread over the average remaining service lives of
current employees.
Contributions to defined contribution pension plans are charged 
to the profit and loss account as incurred.
49 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
1. Segmental analysis
New Increment Movement in 
acquisitions on 2001 discontinued
2001 Exchange 2002 acquisitions operations
Organic change
2002
Analysis of change in sales £m £m £m £m £m £m % £m
European Distribution 2,371.4 11.5 5.5 64.4 – 64.7 2.7 2,517.5
North American Plumbing 
and Heating Distribution 3,000.5 (23.2) 61.2 568.7 – (14.8) (0.5) 3,592.4
US Building Materials Distribution 1,769.7 (12.8) 35.5 58.9 – 6.4 0.4 1,857.7
7,141.6 (24.5) 102.2 692.0 – 56.3 0.8 7,967.6
Discontinued operations 53.3 5.9 –– (59.2) –– –
7,194.9 (18.6) 102.2 692.0 (59.2) 56.3 0.8 7,967.6
New Increment Movement in 
acquisitions on 2001 discontinued
Analysis of change in operating profit 2001 Exchange 2002 acquisitions operations
Organic change
2002
before goodwill amortisation £m £m £m £m £m £m % £m
European Distribution 158.2 0.5 (0.1) 2.6 – 10.2 6.4 171.4
North American Plumbing 
and Heating Distribution 155.5 (2.0) 2.5 28.8 – 15.9 10.4 200.7
US Building Materials Distribution 96.8 (0.7) 1.4 4.6 – (10.3) (10.7) 91.8
410.5 (2.2) 3.8 36.0 – 15.8 3.9 463.9
Discontinued operations 3.7 ––– (3.7) –– –
Operating profit before 
goodwill amortisation 414.2 (2.2) 3.8 36.0 (3.7) 15.8 3.8 463.9
Turnover Operating profit Net assets
2002 2001 2002 2001 2002 2001
By class of business £m £m £m £m £m £m
European Distribution 2,517.5 2,371.4 162.1 149.6 771.0 736.6
North American Plumbing 
and Heating Distribution 3,592.4 3,000.5 190.1 151.9 981.5 940.1
US Building Materials Distribution 1,857.7 1,769.7 85.0 91.2 552.5 644.9
Manufacturing – 53.3 – 3.7 – –
Parent and others – – – – (79.2) (60.2)
7,967.6 7,194.9 437.2 396.4 2,225.8 2,261.4
Net assets are defined as fixed assets plus net current assets, less provisions for liabilities and charges but excluding investments, cash,
borrowings and dividends payable. The divisional operating and trading profits are stated after the allocation of central costs and charges.
50 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
2002 2001
Turnover by geographical origin and destination £m £m
United Kingdom 1,623.7 1,504.9
France 544.4 560.4
United States 5,089.3 4,738.7
Canada 360.8 31.6
Rest of World 349.4 359.3
7,967.6 7,194.9
Turnover by geographical origin and destination are not materially different. In addition, turnover between business and geographical
segments is not material.
2. Operating profit
Continuing Total
operations Acquisitions 2002 2001
£m £m £m £m
T urnover 7,865.4 102.2 7,967.6 7,194.9
Cost of sales (5,759.5) (81.2) (5,840.7) (5,282.2)
Gross profit 2,105.9 21.0 2,126.9 1,912.7
Distribution costs (1,456.4) (16.0) (1,472.4) (1,322.2)
Administrative expenses (244.1) (2.3) (246.4) (222.7)
Other operating income 29.1 – 29.1 28.6
434.5 2.7 437.2 396.4
3. Amounts charged in arriving at operating profit
2002 2001
£m £m
Operating lease rentals:
– Plant and machinery 6.2 7.2
– Other operating leases 100.2 80.0
Depreciation (including profit/loss on disposal of fixed assets) 92.5 85.4
Depreciation on finance lease assets 4.2 4.8
Staff costs (note 8) 1,034.5 945.6
Goodwill amortisation 26.7 17.8
One off costs incurred in respect of acquisition integration 7.1 –
Amounts payable to the auditors:
Audit fees
– Company 0.1 0.1
– Group 1.5 1.4
Taxation
– UK 2.0 2.4
– Rest of World 0.1 0.1
Due diligence reviews
– UK 0.5 0.2
– Rest of World 0.4 0.3
Other services
– UK 0.1 0.9
– Rest of World 0.2 0.3
Total fees payable to the auditors 4.9 5.7
51 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
4. Net interest payable
2002 2001
£m £m
Interest receivable 44.1 30.2
Interest payable and similar charges
– Bank loans and overdrafts (63.6) (63.9)
– Other loans (6.3) –
– Finance lease charges (0.7) (1.5)
(26.5) (35.2)
Net interest receivable on construction loans amounted to £9.1 million (2001: £6.7 million).
5. Taxation
The corporate tax rates applicable in the countries in which the group principally operates are:
UK 30.0% (2001: 30.0%)
France 35.43% (2001: 36.44%)
USA 35.0% federal tax (2001: 35.0%) plus applicable rates of state tax
2002 2001
The tax charge for the year comprises: £m £m
UK current year tax charge 29.0 93.5
– Less: double tax relief (0.3) (74.6)
28.7 18.9
– UK prior year – (1.8)
Total UK tax charge 28.7 17.1
Overseas current year tax charge 89.5 86.7
Overseas prior year (10.1) (1.0)
Total overseas tax charge 79.4 85.7
Total current tax 108.1 102.8
Deferred tax charge - origination and reversal of timing differences 14.4 3.3
Total tax charge 122.5 106.1
2002 2001
Tax reconciliation: % %
Average UK corporation tax rate 30 30
Prior year amounts (1) 1
Non deductible and non-taxable items (4) (8)
Deferred tax - origination and reversal of timing differences (4) (1)
Higher average tax rates in overseas companies 5 6
Exceptional loss at standard rate of corporation tax – 7
Effective current tax rate on profit on ordinary activities before tax 26 35
52 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
2002 2001
Deferred tax: £m £m
The elements of deferred tax are as follows:
Accelerated capital allowances 6.2 (2.3)
Other timing differences (5.8) (13.7)
Deferred tax liability/(asset) 0.4 (16.0)
The movements in the deferred tax balance were as follows:
Asset at beginning of year (16.0) (14.3)
Amount charged to profit and loss account 14.4 3.3
Acquisitions 2.2 (4.3)
Disposals – (0.8)
Exchange (0.2) 0.1 
Liability/(asset) at end of year 0.4 (16.0)
The closing balance is made up of:
Deferred tax asset (11.3) (17.9)
Deferred tax liability 11.7 1.9
0.4 (16.0)
There are other deferred tax assets in relation to tax losses totalling £0.1 million (2001: £0.8 million) that have not been recognised 
on the basis that their future economic benefit is uncertain.
No provision has been made for deferred tax on gains recognised on revaluing property to its market value or on the sale of properties
where potentially taxable gains have been rolled over into replacement assets. Such tax would become payable only if the property were
sold without it being possible to claim rollover relief. The total amount unprovided for is £8.0 million (2001: £6.2 million). At present, 
it is not anticipated that any tax will become payable in the foreseeable future.
6. Dividends
2002 2001
£m £m
Interim paid 5.00p per share (2001: 4.55p) 28.9 26.2
Final proposed 13.90p per share (2001: 12.35p) 80.3 71.2
Total 18.90p per share (2001: 16.90p) 109.2 97.4
7. Earnings per share
Basic earnings per share of 49.96p is calculated on the profit of £288.2 million accruing to ordinary share capital and on a weighted
average number of ordinary shares in issue during the year of 577.1 million. The earnings per share before exceptionals and goodwill
amortisation of 54.58p is calculated on the profit of £314.9 million accruing to ordinary share capital. The impact of all potentially dilutive
share options on earnings per share would be to increase the weighted average number of shares in issue by 5.8 million and to reduce
basic earnings per share by 0.50 pence.
53 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
8. Employee information and directors’ remuneration
2002 2001
Employment costs £m £m
Wages and salaries 896.8 817.2
Social security costs 113.5 100.6
Other pension costs (note 33) 24.2 27.8
1,034.5 945.6
Details of directors’ remuneration and share options are set out in the remuneration report on pages 40 to 44.
Average weekly number of employees: 2002 2001
European Distribution 14,063 13,106
North American Plumbing and Heating Distribution 13,786 11,711
US Building Materials Distribution 9,287 9,414
Manufacturing and other – 503
37,136 34,734
9. Intangible fixed assets
The group £m
Goodwill cost
At 1 August 2001 510.9
Additions 82.3
Disposals (0.1)
Revisions to prior year 5.8
Exchange rate adjustment (35.0)
At 31 July 2002 563.9
Goodwill amortisation
At 1 August 2001 36.6
Charge for the year 26.7
Exchange rate adjustment (2.1)
At 31 July 2002 61.2
Net book value at 31 July 2002 502.7
Net book value at 1 August 2001 474.3
54 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
Following the completion of the opening balance sheet review of Westburne, acquired in July 2001, its provisional fair values have been
amended. Fair value of stock was reduced by £8.8 million to £93.8 million, creditors increased by £5.1 million to £99.5 million, taxation
provisions reduced by £4.3 million to a £2.1 million debtor and consideration decreased by £2.0 million to £253.1 million. The net
adjustment to goodwill arising from these revisions is £7.6 million. The revised total goodwill on acquisition of Westburne included in these
financial statements is £131.5 million.
Completion of opening balance sheet reviews of a further 8 acquisitions reduced purchased goodwill by £1.8 million.
10. Tangible fixed assets
Land and buildings
Plant
Long term Short term machinery,
Freehold leasehold leasehold equipment Total 
The group £m £m £m £m £m
Cost
At 1 August 2001 395.5 11.3 129.9 512.8 1,049.5
Exchange rate adjustment (22.9) – (6.4) (25.4) (54.7)
New businesses 15.2 0.3 9.6 6.8 31.9
Additions 27.1 2.2 12.6 73.7 115.6
Disposals and transfers (6.5) – (7.2) (43.7) (57.4)
Property awaiting disposal (11.2) ––– (11.2)
At 31 July 2002 397.2 13.8 138.5 524.2 1,073.7
Accumulated depreciation
At 1 August 2001 71.2 3.2 67.5 315.3 457.2
Exchange rate adjustment (3.4) – (3.5) (17.8) (24.7)
New businesses –– 6.4 3.1 9.5
Charge for the year
– Owned assets 11.2 0.6 12.5 67.7 92.0
– Leased assets –– 0.2 4.0 4.2
Disposals and transfers (2.0) – (5.0) (37.8) (44.8)
Property awaiting disposal (1.7) ––– (1.7)
At 31 July 2002 75.3 3.8 78.1 334.5 491.7
Owned assets 321.9 10.0 60.4 179.2 571.5
Assets under finance leases ––– 10.5 10.5
Net book amount - 31 July 2002 321.9 10.0 60.4 189.7 582.0
Net book amount - 1 August 2001 324.3 8.1 62.4 197.5 592.3
The cost of tangible fixed assets at 31 July 2002 included £13.1 million (2001: £16.4 million) in respect of assets in the course of
construction. Freehold land, which is included above and amounts to £93.1 million (2001: £98.3 million), is not depreciated.
55 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
11. Investments
Net book
Cost Provisions amount
The group and company £m £m £m
Investment in own shares
At 1 August 2001 0.2 – 0.2
Decrease (0.1) – (0.1)
At 31 July 2002 0.1 – 0.1
At 31 July 2002 there were 16,318 Wolseley plc shares of 25 pence each held by Wolseley QUEST Ltd at 31 July 2002 (2001: 68,130) 
at recoverable amount, which are excluded from the EPS calculation.
Investment in subsidiaries
Net book
Cost Provisions amount
The company £m £m £m
At 1 August 2001 and at 31 July 2002 1,512.4 (25.0) 1,487.4
The principal subsidiary undertakings of the group and details of the nature of the shares held are listed on pages 74 to 75 
of these accounts.
A complete list of subsidiary undertakings is available on request to the company.
12. Stocks
The group
2002 2001
£m £m
Goods purchased for resale 1,050.9 1,093.8
The current replacement cost of stocks does not differ materially from the historical cost stated above. 
Certain subsidiary undertakings have consignment stock arrangements with suppliers in the ordinary course of business. Items drawn from
consignment stock are generally invoiced to the companies concerned at the price ruling at the date of drawdown. The value of such
stock, at cost, which has been excluded from the balance sheet in accordance with the application notes included in FRS 5, amounted 
to £8.1 million (2001: £6.5 million).
56 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
13. Debtors
The group The company
2002 2001 2002 2001
£m £m £m £m
Amounts falling due within one year:
Trade debtors 1,179.8 1,188.7 – –
Amounts owed by group undertakings – – 2,302.2 1,897.8
Other debtors 123.3 98.6 – –
Prepayments and accrued income 43.2 47.4 2.6 2.6
Corporation tax recoverable 1.1 – 0.9 2.2
Property awaiting disposal 14.0 9.4 – 2.2
1,361.4 1,344.1 2,305.7 1,904.8
Amounts falling due after more than one year:
Deferred tax asset 11.3 17.9 – 0.8
1,372.7 1,362.0 2,305.7 1,905.6
14. Construction loans
The group
2002 2001
£m £m
Construction loans receivable - secured 171.4 215.5
Borrowings to finance construction loans - unsecured (171.4) (215.2)
– 0.3
Construction loans receivable, which are secured principally against homes in the course of construction or completed homes awaiting
sale, are made to customers of Stock Building Supply. 
Included in construction loans receivable is an amount of £9.1 million (2001: £12.6 million) representing properties held for sale in lieu 
of foreclosed loans.
15. Current asset investments
The group
2002 2001
£m £m
US Life Assurance policies 4.2 3.7
French SICAV, bonds and commercial paper 3.0 8.7
Austrian marketable securities (A3 bonds) 2.1 1.9
9.3 14.3
57 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
16. Short-term borrowings
The group The company
2002 2001 2002 2001
£m £m £m £m
Bank loans and overdrafts:
Unsecured 246.8 268.5 289.1 199.3
Other loans:
Secured 5.0 5.5 – –
Unsecured 0.4 0.4 – –
252.2 274.4 289.1 199.3
17. Creditors: amounts falling due within one year
The group The company
2002 2001 2002 2001
£m £m £m £m
Trade creditors 773.8 725.3 – –
Bills of exchange payable 91.6 84.7 – –
Amounts owed to group undertakings – – 1,499.6 1,087.1
Corporation tax 46.0 59.8 – –
Other tax and social security 34.7 31.4 – 0.3
Other creditors 77.0 112.9 4.9 5.9
Accruals and deferred income 142.5 161.7 2.5 3.1
Proposed dividend 80.3 71.2 80.3 71.2
1,245.9 1,247.0 1,587.3 1,167.6
18. Borrowings falling due after one year
The group The company
2002 2001 2002 2001
£m £m £m £m
Maturity of borrowings
Due in one to two years 55.2 268.0 48.0 258.2
Due in two to five years 405.7 54.2 525.7 52.6
Due in over five years 46.7 354.8 – 348.1
507.6 677.0 573.7 658.9
Repayable after five years otherwise than by instalments
US Industrial Revenue Bonds 3.2 3.5 – –
Bank facilities 43.3 348.1 – 348.1
Repayable within 2 to 5 years
Bank facilities 405.7 322.3 525.7 310.8
Repayable within 1 to 2 years
Finance leases and other facilities 7.1 – – –
Bank facilities 48.1 – 48.0 –
Repayable by instalments, any one of which is due for repayment after five years:
Other loans – 2.9 – –
Repayable by instalments all of which are due for repayment after five years:
Other loans 0.2 0.2 – –
507.6 677.0 573.7 658.9
Details of the group’s undrawn committed facilities are set out in the Operating and financial review on pages 18 to 27.
Finance lease obligations included above are secured against the assets concerned. Other secured loans amounting to £10.7 million 
(2001: £10.5 million) are secured against various group assets. 
58 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
19. Provisions for liabilities and charges
Wolseley Other
Reorganisation Pensions Insurance provisions Total
The group £m £m £m £m £m
At 1 August 2001 0.1 39.2 21.7 24.8 85.8
Utilised in the year (0.1) (25.8) (10.8) (0.3) (37.0)
Charge for the year – 25.2 12.2 28.3 65.7
T ransfers – 5.5 –– 5.5
New businesses ––– 0.1 0.1
Exchange differences – (0.4) (1.8) (0.9) (3.1)
At 31 July 2002 – 43.7 21.3 52.0 117.0
Wolseley Insurance provisions represent certain accumulated balances on its general business fund in respect of provisions for outstanding
and potential claims based on historical experience.
Other provisions include for property, £7.0 million, environmental and legal liabilities (including asbestos related litigation), £30.9 million
and deferred taxation, £11.7 million. The asbestos related litigation is fully covered by insurance and accordingly an equivalent insurance
receivable has been recorded in ‘Other debtors’ (note 13) in line with FRS 12 ‘Provisions, contingencies and contingent assets’. The level of
insurance cover available significantly exceeds the expected level of future claims and no profit or cash flow impact is therefore expected
to arise in the foreseeable future.
At 31 July 2002 the company had provisions of £nil (2001: £nil).
20. Share capital
Authorised Allotted and issued
2002 2001 2002 2001
Number of ordinary 25p shares (million) 800.0 800.0 577.9 576.3
Nominal value of ordinary 25p shares (million) £200.0 £200.0 £144.5 £144.1
All the allotted and issued shares are fully paid or credited as fully paid.
Allotment of shares
From 1 August 2001 to 31 July 2002, new ordinary shares of 25 pence each in the company have been issued as follows:
Allotment Number of Price per Value/
date shares share proceeds
£ £m Purpose of issue
Various 88,104 2.51 to 4.09 0.3 Exercise of savings related share options
Various 1,230,198 2.0325 to 4.835 5.0 Exercise of executive share options
March 2001 328,137 7.045 2.3 Allotted to Wolseley Quest Ltd for exercise of 
savings related share options
1,646,439 7.6
59 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
All employee share plans
The maximum number of shares over which options may be granted (but excluding any which lapse) under all share option schemes 
and the stock appreciation plan in any ten year period is 10% of the issued share capital from time to time. The number of shares over
which options may be granted under all such schemes as at 31 July 2002 was 57,794,990 of which 14,152,921 have already been issued
pursuant to options exercised in the ten year period ended on 31 July 2002. The following options were outstanding under the various 
all employee share plans:
Number of Not
shares under exercisable
option Price after
3,259 275.00p September 2002
63,951 368.00p September 2003
7,410 409.00p September 2002
66,249 409.00p September 2004
1,415,200 372.00p April 2003
349,000 345.00p September 2003
97,478 345.00p September 2005
1,612,000 324.00p April 2004
3,094 375.00p September 2002
246,870 375.00p September 2004
85,024 375.00p September 2006
2,012,200 348.00p April 2005
587,521 251.00p September 2003
689,677 251.00p September 2005
160,548 251.00p September 2007
2,419,700 376.00p April 2006
247,286 336.00p September 2004
352,495 336.00p September 2006
86,344 336.00p September 2008
518,019*** 597.00p June 2003
290,118* 562.00p November 2005
23,515** 562.00p January 2006
262,221* 562.00p November 2007
1,130** 562.00p January 2008
81,117* 562.00p November 2009
11,681,426
* Granted 18 April 2002
** Granted 10 April 2002
*** Granted 20 March 2002
60 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
Executive share option schemes
The maximum number of shares over which options may be granted (but excluding any which lapse) under the rules of the executive
share option schemes in any ten year period is 5% of the issued share capital from time to time. The number of shares over which options
may be granted as at 31 July 2002 was 28,897,495 of which 8,930,769 have already been issued pursuant to options exercised on or
before 31 July 2002. As at that date the following options were outstanding:
Number of shares 
Date of grant under option Price Not exercisable after
November 1992 38,000 220.75p November 2002
October 1993 87,200 350.25p October 2003
November 1994 179,600 388.75p November 2004
November 1995 160,000 440.00p November 2005
November 1995 115,400 433.00p November 2005
March 1996 16,000 460.00p March 2006
November 1996 124,000 456.50p November 2006
December 1996 110,200 456.50p December 2006
December 1997 368,646 483.50p December 2007
November 1998 367,626 381.00p November 2008
October 1999 775,556 397.00p October 2009
October 2000 1,076,200 349.75p October 2010
May 2001 400,000 468.00p May 2011
June 2001 100,000 485.00p June 2011
November 2001 2,372,500 467.00p November 2011
6,290,928
21. Reserves
Share 
premium Profit
account and loss
The group £m £m
At 1 August 2001 161.9 1,190.4
Transfer from profit and loss account – 179.0
Shares issued 7.2 –
Goodwill written back on disposal – 1.2
Currency translation differences – (84.3)
At July 31 2002 169.1 1,286.3
Share 
premium Capital Profit
account reserve and loss
The company £m £m £m
At 1 August 2001 161.9 166.6 972.1
Shares issued 7.2 ––
Profit for this year –– 70.6
T ransfer – (166.6) 166.6
Dividends payable –– (109.2)
At 31 July 2002 169.1 – 1,100.1
61 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
As permitted by s230 of the Companies Act 1985, Wolseley plc has not presented its own profit and loss account.
Included in this profit and loss account balance is an amount of £938.9 million which may not be distributable. 
During the year the English High Court confirmed that the company had been released from its undertaking given in 1986 when the share
premium account was reduced and further confirmed that the £166.6 million reserve be treated as a realisable profit and a distributable
reserve for the purposes of the Companies Act 1985.
22. Reconciliation of movements in equity shareholders’ funds 
The group The company
2002 2001 2002 2001
£m £m £m £m
Profit for the financial year 288.2 185.1 70.6 30.9
Dividends (109.2) (97.4) (109.2) (97.4)
Currency translation differences (84.3) 35.6 – –
New share capital subscribed 7.6 5.5 7.6 5.6
Goodwill written back on disposals 1.2 44.4 – –
Net additions to shareholders’ funds 103.5 173.2 (31.0) (60.9)
Opening shareholders’ funds 1,496.4 1,323.2 1,444.7 1,505.6
Closing shareholders’ funds 1,599.9 1,496.4 1,413.7 1,444.7
23. Acquisitions
The details of acquisitions made since 1 August 2001 and consideration paid are shown in the Operating and financial review on 
pages 18 to 27.
Book Accounting Fair
values Property policy values 
acquired Revaluation alignments acquired
£m £m £m £m
Tangible fixed assets 17.5 5.8 (0.9) 22.4
Stocks 39.5 – (3.7) 35.8
Debtors 68.9 – (0.7) 68.2
Creditors (47.5) – (0.8) (48.3)
Taxation ––––
Borrowings - short-term (45.8) –– (45.8)
Provisions (0.1) –– (0.1)
Total 32.5 5.8 (6.1) 32.2
The accounting policy adjustments to tangible fixed assets reflect their restatement at depreciated replacement cost with useful lives
determined in accordance with group accounting policies. The book value of stocks has been adjusted to write down slow moving and
obsolete stocks to their estimated net realisable values in accordance with the group accounting policy.
Adjustments to debtors comprise provisions for bad and doubtful debts in accordance with the group accounting policy. 
The fair value adjustments shown above for the year ended 31 July 2002 are provisional figures, being the best estimates currently available.
Further adjustments to goodwill may be necessary when additional information is available concerning some of the judgemental areas and
completion accounts exercises are finalised. 
62 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
The acquisitions in the year are listed on page 76.
Consideration Fair value of
(excluding net assets
debt assumed) acquired Goodwill
Goodwill £m £m £m
European Distribution 39.0 20.1 18.9
North American Plumbing and Heating Distribution 61.8 4.5 57.3
US Building Materials Distribution 13.7 7.6 6.1
114.5 32.2 82.3
At 31 July 2002 deferred consideration outstanding was £1.1 million (2001: £10.7 million) payable in cash.
The aggregate amount of goodwill written off to reserves since 1 May 1958 is as follows:
2002
£m
North American acquisitions 268.0
French acquisitions 109.3
Austrian acquisitions 67.9
Other acquisitions 98.5
Total 543.7
24. Analysis of the net outflow of cash in respect of the purchase of businesses
2002 2001
£m £m
Purchase consideration (note 23) 114.5 398.0
Net deferred payments 9.6 1.0
Cash consideration 124.1 399.0
Bank overdrafts acquired 45.8 1.6
169.9 400.6
25. Analysis of the net inflow of cash in respect of the sale of businesses
2002 2001
£m £m
Disposal proceeds 8.2 16.0
Cash disposed of – (3.0)
8.2 13.0
During the year the group disposed of two operations in the North American Plumbing and Heating Distribution division. Assets with 
a net book value of £7.7 million were disposed of. A loss of £0.7 million was recorded on disposal, after taking into account goodwill 
of £1.2 million, previously written off to reserves.
63 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
26. Reconciliation of operating profit to net cash inflow from operating activities
2002 2001
£m £m
Operating profit 437.2 396.4
Depreciation (including profit/loss on fixed asset disposals) 92.5 85.4
Goodwill amortisation 26.7 17.8
Decrease in stocks 7.4 33.1
Increase in debtors (24.0) (70.1)
Increase in creditors and provisions 44.0 54.8
Decrease/(increase) in construction loans receivable 44.1 (12.5)
(Decrease)/increase in construction loans payable (43.8) 13.1
Net cash inflow from operating activities 584.1 518.0
27. Analysis of cash flows shown net in the cash flow statement
2002 2001
£m £m
Returns on investments and servicing of finance
Interest received 43.9 30.7
Interest paid (65.7) (66.8)
Interest element of finance lease rentals (0.7) (0.8)
Net cash outflow for returns on investments and servicing of finance (22.5) (36.9)
Capital expenditure
Payments to acquire tangible fixed assets (118.3) (120.8)
Receipts from sales of tangible fixed assets 21.5 12.0
Net cash outflow for capital expenditure (96.8) (108.8)
Management of liquid resources
Decrease/(increase) in current asset investments 4.8 (6.0)
Increase in money market and other deposits (3.4) –
Net cash inflow/(outflow) from management of liquid resources 1.4 (6.0)
Financing
Issue of ordinary share capital 7.6 5.5
(Repayment)/drawdown of long-term borrowings (104.2) 253.6
Capital element of finance lease rental payments (2.2) (5.1)
Net cash (outflow)/inflow from financing (98.8) 254.0
The group includes in liquid resources all current asset investments and interest-bearing amounts on deposit which are readily disposable
and convertible into cash at values close to book value.
64 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
28. Analysis of change in net debt
Acquisitions
and new
finance Exchange
2001 Cash flow leases movement 2002
£m £m £m £m £m
Cash in hand and at bank 215.3 (19.7) – (19.6) 176.0
Overdrafts (268.9) 5.7 – 16.0 (247.2)
(53.6) (14.0) – (3.6) (71.2)
Debt due after more than one year (669.7) 104.2 – 63.4 (502.1)
Finance leases (12.8) 2.2 (2.6) 2.7 (10.5)
(682.5) 106.4 (2.6) 66.1 (512.6)
Current asset investments 14.3 (4.8) – (0.2) 9.3
Money market and other deposits 28.1 3.4 – (2.6) 28.9
42.4 (1.4) – (2.8) 38.2
Net debt (693.7) 91.0 (2.6) 59.7 (545.6)
29. Related party transactions
There are no related party transactions requiring disclosure under FRS 8, Related Party Disclosures.
65 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
30. Assets and liabilities by currency
US Other Group 
Sterling Dollars Euros currencies total
£m £m £m £m £m
As of 31 July 2002
Intangible fixed assets 142.3 270.0 30.2 60.2 502.7
Tangible fixed assets 152.7 335.3 77.6 16.5 582.1
Stocks 230.8 616.4 151.8 51.9 1,050.9
Debtors 285.5 776.2 233.2 77.8 1,372.7
Creditors (281.0) (542.8) (243.6) (52.2) (1,119.6)
Provisions (15.1) (65.1) (32.3) (4.5) (117.0)
Taxation (39.8) (9.1) 1.3 1.6 (46.0)
Proposed dividend (80.3) ––– (80.3)
Gross assets 395.1 1,380.9 218.2 151.3 2,145.5
(Borrowings)/funds - net
– Short-term (5.4) 19.0 (49.5) (2.1) (38.0)
– Long-term – (332.4) (51.1) (124.1) (507.6)
Net assets 389.7 1,067.5 117.6 25.1 1,599.9
Exchange rates at 31 July 2002
Balance sheet $1.5622 k1.5934
Profit and loss account $1.4569 k1.6085
As at 31 July 2001
Gross assets 376.1 1,477.3 175.0 161.7 2,190.1
(Borrowings)/funds - net
– Short-term 20.0 45.6 (76.1) (6.2) (16.7)
– Long-term – (531.5) (0.9) (144.6) (677.0)
Net assets 396.1 991.4 98.0 10.9 1,496.4
Exchange rates at 31 July 2001
Balance sheet $1.4252 k1.6289
Profit and loss account $1.4464 k1.6299
As at 31 July 2002, the group has entered into certain short-term currency swaps amounting to $206.9 million and £131.8 million. Both
the dollar liabilities and the sterling assets are excluded from the above tables. 
There are no material foreign currency transactional exposures as, where appropriate, group companies use forward exchange contracts to
hedge transactions that are not denominated in their functional currency.
66 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
31. Interest rate and currency profile
The current value of interest bearing assets, borrowings and off balance sheet contracts is as follows:
Weighted Weighted 
average average
Interest Off balance fixed time for
bearing sheet interest which rate
assets Borrowings contracts Net Floating Fixed Total rate is fixed
Currency £m £m £m £m £m £m £m % Years
Sterling 0.3 (5.7) 131.8 126.4 126.4 – 126.4 ––
US Dollars 189.3 (502.7) (132.4) (445.8) (253.8) (192.0) (445.8) 4.1 1.1
Euros 18.8 (117.2) – (98.4) (79.6) (18.8) (98.4) 4.2 1.5
Canadian dollars 3.0 (127.4) – (124.4) (82.7) (41.7) (124.4) 6.0 6.7
Other currencies 2.8 (6.8) – (4.0) (4.0) – (4.0) ––
Total 214.2 (759.8) (0.6) (546.2) (293.7) (252.5) (546.2)
The off balance sheet contracts are currency and interest rate swaps as detailed below. 
Interest receipts and payments on the floating rate asset and liabilities are determined by reference to short-term benchmark rates
applicable in the relevant currency or market, such as LIBOR. 
The group has entered into the following interest rate swaps and forward rate agreements with the following net effect 
as of 31 July 2002:
Amount Expiry date Wolseley receives Wolseley pays
US $ 100m May 2003 6 month Libor 4.685% to 5.09%
US $ 100m October 2003 3 month Libor 3.625% to 3.64%
US $ 100m November 2003 3 month Libor 3.705% to 3.72%
Euro 30m February 2004 3 month Euribor 4.185%
32. Financial instruments
The group held the following categories of financial instruments at 31 July 2002:
Book value Fair value
£m £m
Financial instruments held to fund the group’s operations
Short-term borrowings (252.2) (252.2)
Loans and other borrowings payable after one year (507.6) (507.6)
Cash and deposits 204.9 204.9
Construction loans receivable 171.4 171.4
Construction loans payable (171.4) (171.4)
Current asset investments 9.3 9.3
Financial instruments held to manage the group’s interest rate and currency profile
Interest rate swaps – (5.0)
Short-term currency swaps – (0.6)
67 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
For the purpose of the previous table, the fair values of short-term borrowings, cash and deposits, construction loans payable and current
asset investments, approximate to book value due to their short maturities. The loans and other borrowings payable after one year
generally attract variable interest rates based on 6 month LIBOR, thus the fair value of these instruments at 31 July 2002 also
approximates to their book value. The fair value of construction loans receivable approximates to book value as the interest rates attaching
to these loans reflect a market risk premium. Sterling cash and deposits are utilised to reduce currency borrowings through the use of
short-term currency swaps. 
To determine the fair value of currency and interest rate swaps for inclusion in the previous table, a calculation was made of the net gain
or loss which would have arisen if these contracts had been terminated on 31 July 2002. 
At 31 July 2002 unrecognised gains and losses on forward exchange contracts taken out as hedges of sales and purchase transactions
were not significant.
The group’s policy in respect of foreign currency and interest risk management and the related use of financial instruments are set out 
in the treasury section of the Operating and financial review on pages 25 to 27 and form part of these financial statements.
Short-term debtors and creditors arising directly from the group’s operations are excluded from the above disclosures other than those
relating to assets and liabilities by currency.
33. Pensions and other post retirement benefits
United Kingdom
The principal plan operated for UK employees is the Wolseley Group Retirement Benefits Plan which provides benefits based on 
final pensionable salaries. The assets are held in separate trustee administered funds. The plan’s retirement benefits are funded by a
contribution from employees of 5% of earnings with the balance being paid by group companies. The contribution rate is calculated 
on the Projected Unit Method and agreed with independent consulting actuaries.
An independent actuarial valuation was last carried out on 1 May 2001. On that date the market value of the plan’s assets was £350.5
million. The market value of the assets was 105% of accrued benefits, after allowing for increases in earnings and pensions in payment.
The normal cost to the company was 14.4% of pensionable earnings. The financial assumptions used were based on gilt and bond yields
as at the valuation date. The principal actuarial assumptions used were an investment return of 6.5% per annum before retirement and 
an investment return of 5.5% per annum after retirement, future salary increases of 5% or 6% per annum and increases to pensions in
payment of 2.5% per annum. The total charge to the profit and loss account for UK companies was £9.4 million (2001: £7.2 million).
North America
The principal plans operated for US employees are defined contribution schemes, details of which are set out below. In addition the group
operates 3 defined benefit schemes in the United States. In Canada both a defined benefit scheme and a defined contribution scheme are
operated. The majority of assets are held in trustee administered funds independent of the assets of the companies.
Defined contribution plans
Defined contribution plans are established in accordance with US 401(k) rules. Companies contribute to both employee compensation
deferral and profit sharing plans. Contributions are charged to the profit and loss account in the period in which they fall due. In the 
year to 31 July 2002 the cost of defined contribution plans charged to the profit and loss account was £9.9 million (2001: £16.4 million).
Defined benefit plans
Defined benefit plans are operated by three US subsidiary undertakings and Wolseley Canada. Two of the US plans and the Canadian plan
are funded. Two plans are closed to new entrants. The closed plans now provide a minimum pension guarantee in conjunction with a
defined contribution plan. The remaining plans provide benefits based on final pensionable salaries. The contribution rate is calculated 
on the Projected Unit (credit) method as agreed with independent consulting actuaries. The independent actuaries have reported on the
assets and liabilities of the plans at 31 July 2002. The principal actuarial assumptions were based upon investment returns of 7% – 7.5%
and future salary increases of 4%. The obligations are discounted at 7%. The fair value of the assets of the funded plans amounted to
£44.0 million. The market value of the assets was 81.3% of the accrued benefits. Surpluses and deficits revealed by the valuation are
being amortised over the expected remaining service lives of members. The total profit and loss account charge for North American
schemes was £3.2 million (2001: £2.9 million).
68 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
69 Wolseley plc Annual report and accounts 2002
Other territories
Both defined contribution and defined benefit schemes are operated. Liabilities arising under defined benefit schemes are calculated 
in accordance with actuarial advice. Full provision is made for such liabilities in these accounts. Contributions to defined contribution
schemes are accounted for in the period in which they fall due. 
The cost of other defined contribution and defined benefit schemes charged to the profit and loss account was £2.7 million 
(2001: £2.5 million).
Post retirement health care
There are no material obligations to provide post retirement health care benefits.
FRS 17 Retirement benefits
The valuation used for FRS 17 disclosures with respect to the UK scheme has been based on the most recent actuarial valuation at 
1 May 2001 and updated by the scheme actuary to take account of the requirements of FRS 17 in order to assess the liabilities of 
the scheme at 31 July 2002. Scheme assets are stated at their market value at 31 July 2002. Non-UK schemes have been aggregated 
and weighted averages applied.
The financial assumptions used to calculate scheme liabilities under FRS 17 are:
2002 2001
UK Non-UK UK Non-UK
Projected Projected Projected Projected
Valuation method Unit Unit Unit Unit
Discount rate 6.00% 6.50% 6.00% 6.24%
Inflation rate 2.45% 2.50% 2.64% 2.50%
Increase to deferred benefits during deferment 2.50% 2.50% 2.75% 3.86%
Increases to pensions in payment 2.50% 2.50% 2.75% 3.86%
Salary increases 4.50% 3.50% 4.75% 3.43%
The assets in the schemes and the expected rates of return were:
2002 2001
UK Non-UK UK Non-UK
Long-term Long-term Long-term Long-term
rate of Value rate of Value rate of Value rate of Value
return at 31 return at 31 return at 31 return at 31
expected July expected July expected July expected July
at 31 July 2002 at 31 July 2002 at 31 July 2001 at 31 July 2001
2002 £m 2002 £m 2001 £m 2001 £m
Equities 7.00% 130.1 –– 7.00% 164.3 ––
Bonds 5.00% 39.8 –– 5.00% 40.2 ––
Overseas 6.90% 92.6 7.35% 45.9 6.90% 119.5 8.47% 53.5
Other 5.00% 6.1 –– 5.00% 5.2 ––
Total market value of assets 6.62% 268.6 7.35% 45.9 6.69% 329.2 8.47% 53.5
Present value of schemes liabilities (354.7) (91.6) (342.1) (101.5)
Deficit in the schemes (86.1) (45.7) (12.9) (48.0)
Related deferred tax asset 25.8 16.3 3.9 14.4
Net pension liability (60.3) (29.4) (9.0) (33.6) Notes to the accounts
year ended 31 July 2002
The group
2002 2001
Net assets £m £m
Net assets 1,599.9 1,496.4
Pension liability over that established under SSAP24 (60.4) (14.1)
Net assets including pension liability 1,539.5 1,482.3
The group
2002 2001
Reserves £m £m
Profit and loss reserve 1,286.3 1,190.4
Pension liability over that established under SSAP24 (60.4) (14.1)
Profit and loss reserve 1,225.9 1,176.3
The net pension liability of £89.7 million calculated in accordance with FRS 17 compares with the pension provision currently recorded of
£43.7 million (note 19) less the related deferred tax asset of £14.4 million.
UK Non-UK
2002 2002
Analysis of amount charged to operating profit £m £m
Current service cost 10.4 3.1
UK Non-UK
2002 2002
Analysis of amount charged to other finance income/(expense) £m £m
Interest on pension liabilities (20.6) (5.6)
Expected return on scheme assets 22.2 3.4
1.6 (2.2)
70 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
UK Non-UK
2002 2002
Movement in scheme deficit during year £m £m
Deficit at 1 August (12.9) (48.1)
Exchange – 1.8
Current service cost (10.4) (3.1)
Contributions 9.0 2.9
Other finance income/(expenses) 1.6 (2.2)
Actuarial (loss)/gain (73.4) 3.0
Deficit at 31 July (86.1) (45.7)
UK Non-UK
2002 2002
History of experience gains and losses £m £m
Difference between the expected and the actual return on scheme assets
Amount (84.5) (5.3)
Percentage of scheme assets (31.5)% (11.5)%
Experience gains and losses on scheme liabilities
Amount (0.9) 9.0
Percentage of the present value of scheme liabilities (0.3)% 9.8%
Effect of changes in assumptions underlying the present value of scheme liabilities
Amount 12.0 (0.7)
Percentage of the present value of scheme liabilities 3.4% (0.8)%
Total amount recognised in the statement of total recognised gains and losses
Amount (73.4) 3.0
Percentage of the present value of scheme liabilities (20.7)% 3.3%
34. Capital commitments
At 31 July 2002 authorised capital expenditure which was contracted for but not provided in these accounts amounted to £48.1 million
(2001: £69.7 million).
35. Operating lease commitments
Future minimum payments due in the next twelve months under operating lease commitments are as follows:
Property leases Other leases
2002 2001 2002 2001
£m £m £m £m
Leases which expire within
12 months 7.3 7.7 1.4 1.2
13-24 months 11.1 10.6 3.6 2.3
25-36 months 11.7 11.0 3.7 3.6
37-48 months 8.0 8.7 0.6 0.5
49-60 months 8.6 7.1 0.4 0.2
Over 60 months 39.3 38.3 0.7 0.8
86.0 83.4 10.4 8.6
71 Wolseley plc Annual report and accounts 2002 Notes to the accounts
year ended 31 July 2002
36. Contingent liabilities
Wolseley plc and the group have the undermentioned quantifiable contingent liabilities which arose in the ordinary course of business and
which have not been provided in these accounts since no actual liability is expected to arise:
The group The company
2002 2001 2002 2001
£m £m £m £m
Value added tax of certain subsidiary undertakings – – 7.8 5.9
Sundry guarantees, performance bonds and indemnities 29.8 14.0 0.6 0.9
Obligations under forward foreign exchange contracts 131.8 156.0 – –
In addition, Wolseley plc has given its principal UK bank authority to transfer at any time any sum outstanding to its credit against or
towards satisfaction of the liability to the bank of certain subsidiary undertakings. 
As of 31 July 2002, cash deposits of Wolseley Insurance Limited amounting to £28.9 million (2001: £22.5 million) were charged in favour
of Lloyds TSB Bank plc to secure a letter of credit provided by that bank.
The company acts as guarantor or surety for various subsidiary undertakings in leasing and other agreements entered into by them in the
normal course of business and has given indemnities and warranties to the purchasers of businesses from the company and certain group
companies in respect of which no material liabilities are expected to arise. Additionally, the company has guaranteed the pension payable
by Brossette BTI to Mr G Pinault, a former director.
37. Post balance sheet events
There have been no significant post balance sheet events.
72 Wolseley plc Annual report and accounts 2002 Independent auditors’ report to the members of Wolseley plc
We have audited the financial statements which comprise 
the profit and loss account, the balance sheet, the cash flow
statement, the statement of total recognised gains and losses and
the related notes (including the additional disclosures relating to
the remuneration of the directors specified for our review by the
UK Financial Services Authority) which have been prepared under
the historical cost convention and the accounting policies set out 
in the statement of accounting policies.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report and
the financial statements in accordance with applicable United
Kingdom law and accounting standards are set out in the directors’
responsibility statement.
Our responsibility is to audit the financial statements in accordance
with relevant legal and regulatory requirements, United Kingdom
Auditing Standards issued by the Auditing Practices Board and the
Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial
statements give a true and fair view and are properly prepared 
in accordance with the Companies Act 1985. We also report to
you if, in our opinion, the directors’ report is not consistent with
the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by
law or the Listing Rules regarding directors’ remuneration and
transactions is not disclosed.
We read the other information contained in the annual report 
and consider the implications for our report if we become aware 
of any apparent misstatements or material inconsistencies with 
the financial statements. The other information comprises only 
the report of the directors (including the corporate governance
statement), the chairman’s statement and the operating and
financial review.
We review whether the corporate governance statement reflects
the company’s compliance with the seven provisions of the
Combined Code specified for our review by the Listing Rules, 
and we report if it does not. We are not required to consider
whether the board’s statements on internal control cover all risks
and controls, or to form an opinion on the effectiveness of the
company’s or group’s corporate governance procedures or its risk
and control procedures.
Basis of audit opinion
We conducted our audit in accordance with auditing standards
issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the company’s
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity 
or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial
statements.
Opinion
In our opinion the financial statements give a true and fair view of
the state of affairs of the company and the group at 31 July 2002
and of the profit and cash flows of the group for the year then
ended and have been properly prepared in accordance with the
Companies Act 1985.
PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
Temple Court
35 Bull Street
Birmingham B4 6JT
24 September 2002
73 Wolseley plc Annual report and accounts 2002 Principal subsidiary undertakings and their directors
European Distribution 
UNITED KINGDOM 
Wolseley Centers Ltd, Ripon, North Yorkshire, HG4 1SL 
(Incorporated and operational in the United Kingdom)
A J Hutton, C A Banks, A Barden, D Bradley, K Evans,
P Gauron, K H D Jones, D E Moody, P W Sheppard,
P G Shewbrook, I Tillotson, A Mander, M J Neville,
R Clay (Secretary)
Services: D Hufton, A Mander, M J Neville
FRANCE
*Brossette SA, 69007 Lyon
(Incorporated and operational in France)
J R Descours, C A Banks, A Domenget,
C Poulaillon, D A Vilbois
AUSTRIA
*OAG Hundelsbeteiligungs AG, 1110 Vienna
(Incorporated and operational in Austria)
A Hartlieb, J Dutter, A Lassnig, A M Wolff,
A J Hutton, P W Sheppard
NETHERLANDS
*Wasco Holding B.V., Twello
(Incorporated and operational in the Netherlands)
G J R van den Belt, H A T van den Belt, O G J van den Belt,
A J Hutton
DENMARK
*Electro – Oil International AS, Glostrup
(Incorporated and operational in Denmark)
B Oestergaard, Mrs A Boldt, I Tillotson
IRELAND
*Heatmerchants Ltd, Athlone, Co. Westmeath
(Incorporated and operational in the Republic of Ireland)
M McCague, B McTernan, M O’Brien, C Soden, K H D Jones, 
S McBride, P Roche
HUNGARY
*Mart Kft, Budapest
(Incorporated and operational in Hungary)
W Hatzl, A M Wolff
CZECH REPUBLIC
*Cesaro Spol sro, Prague
(Incorporated and operational in the Czech Republic)
A M Wolff, C Vogelesang
ITALY
*Manzardo SpA, 39100 Bolzano
(Incorporated and operational in Italy)
C Manzardo, J R Descours, P W Sheppard,
S P Webster, C A Banks
LUXEMBOURG
*Comptoir des Fers et Métaux SA, L–1882 Luxembourg
(Incorporated and operational in Luxembourg)
J–A Thorn, Y Cheret, H Baraer, D A Vilbois,
M J White
North American Plumbing & Heating
USA
*Ferguson Enterprises Inc., Newport News, Virginia 23602
(incorporated and operational in the United States of America)
C S Hornsby, C A Banks, J R English, J H Garrett,
S F Grosslight, M L Grunkemeyer, W S Hargette, S P Mitchell,
F W Roach, D P Strup, T G Adams, L J Stoddard
*Familian Northwest Inc., Portland, Oregon 97217
(incorporated and operational in the United States of America)
R C E Johnson, C A Banks, L Burback, C S Hornsby
*Westburne Supply Inc., Plymouth, Minnesota
(incorporated and operational in the United States of America)
C S Hornsby, C Nichol, S P Mitchell
CANADA
*Wolseley Canada Inc., Burlington, Ontario
(incorporated and operational in Canada)
P R Lachance, C A Banks, M D Lamontagne,
I Thompson, G Petrin, P Goulet, B Wilcox, J Ballance
*Wolseley Industrial Products Group Inc., St.Laurent, Quebec
(incorporated and operational in Canada)
P R Lachance, C A Banks, M D Lamontagne,
R Malloy
USA Building Materials Distribution
USA
*Carolina Holdings Inc. (d/b/a Stock Building Supply), 
Raleigh, North Carolina 27629
(incorporated and operational in the United States of America)
F N Hord, C A Banks, G E Robinette, D W O’Halloran,
W D Rose
74 Wolseley plc Annual report and accounts 2002 Principal subsidiary undertakings and their directors continued
Service companies
Wolseley – Hughes Ltd
(incorporated and operational in the United Kingdom)
*Wolseley Insurance Ltd
(incorporated and operational in the Isle of Man)
*Wolseley Investments Inc.
(incorporated and operational in the United States of America)
*Wolseley Holdings Canada Inc.
(incorporated and operational in Canada)
Wolseley Overseas Ltd
(incorporated and operational in the United Kingdom)
*Wolseley Holdings (Ireland)
(incorporated in the Republic of Ireland and operational
in the United Kingdom)
*Wolseley – Hughes Ireland
(incorporated and operational in the Republic of Ireland)
*DAB Investments Sarl
(incorporated and operational in Luxembourg)
*DAB Investments 2 Sarl
(incorporated and operational in Luxembourg)
All subsidiary undertakings have been included in the
consolidation.
Shareholdings in companies marked * are held by intermediate
subsidiary undertakings.
All shareholdings in the above subsidiary undertakings are of
ordinary shares or equity capital, plus the following preference
shares in the case of:
Wolseley Insurance Ltd. 100%
Wolseley Investments Inc. 100%
75 Wolseley plc Annual report and accounts 2002 Acquisitions completed during the year
Name Date Country of incorporation
Pacific Poly-Pipe Products August 2001 Canada
Evergreen Wholesale Lumber, Inc. October 2001 USA
Gobled November 2001 France
Wilson Brothers Inc. December 2001 USA
Quoirin January 2002 France
Motherwell Industrial Plastics January 2002 UK
Clayton Group Inc. April 2002 USA
Brock Engineering Manufacturing Inc. April 2002 Canada
O’Rourke Plumbing Supplies April 2002 UK
Sumner & Dunbar May 2002 USA
Tahoe Truckee May 2002 USA
Fusionex June 2002 Canada
Wasco July 2002 Netherlands
Capper Plastics July 2002 UK
76 Wolseley plc Annual report and accounts 2002 Five year summary
2002 2001 2000 1999 1998
£m £m £m £m £m
Turnover 
European Distribution 2,517.5 2,371.4 2,196.4 1,952.8 1,642.0
North American Plumbing and Heating Distribution 3,592.4 3,000.5 2,551.2 2,142.6 1,900.0
US Building Materials Distribution 1,857.7 1,769.7 1,362.5 1,038.3 801.9
7,967.6 7,141.6 6,110.1 5,133.7 4,343.9
Manufacturing – 53.3 293.3 371.3 415.6
7,967.6 7,194.9 6,403.4 5,505.0 4,759.5
Trading profit
European Distribution 171.4 158.2 145.3 109.3 107.9
North American Plumbing and Heating Distribution 200.7 155.5 135.9 113.6 87.4
US Building Materials Distribution 91.8 96.8 85.5 64.2 47.7
463.9 410.5 366.7 287.1 243.0
Manufacturing – 3.7 19.0 31.5 34.4
463.9 414.2 385.7 318.6 277.4
Goodwill amortisation (26.7) (17.8) (12.5) (5.5) –
Operating profit 437.2 396.4 373.2 313.1 277.4
Exceptional loss on disposal of operations – (70.0) (42.6) (3.1) (5.3)
Profit on ordinary activities before interest 437.2 326.4 330.6 310.0 272.1
Net interest (payable)/receivable (26.5) (35.2) (28.3) (3.6) 2.1
Profit on ordinary activities before tax 410.7 291.2 302.3 306.4 274.2
Current tax charge (108.1) (102.8) (114.4) (107.7) (92.2)
Deferred tax charge (14.4) (3.3) (2.7) ––
Exceptional tax credit/(charge) – – 6.0 0.7 (5.6)
Profit on ordinary activities after tax 288.2 185.1 191.2 199.4 176.4
Minority interests – – (0.4) (0.5) (0.4)
Profit accruing to ordinary capital 288.2 185.1 190.8 198.9 176.0
Ordinary dividends (109.2) (97.4) (88.3) (78.9) (71.7)
Net assets employed
Intangible fixed assets 502.7 474.3 277.0 179.0 –
Tangible fixed assets 582.1 592.5 531.6 417.0 316.2
Other net assets, excluding liquid funds 1,060.7 1,123.3 970.4 810.6 686.4
2,145.5 2,190.1 1,779.0 1,406.6 1,002.6
Financed by
Share capital 144.5 144.1 143.7 143.5 143.2
Share premium 169.1 161.9 156.7 154.3 150.6
Profit and loss account 1,286.3 1,190.4 1,022.8 796.7 664.5
Shareholders’ funds 1,599.9 1,496.4 1,323.2 1,094.5 958.3
Interests of minority shareholders – – 1.5 3.1 2.7
Net debt 545.6 693.7 454.3 309.0 41.6
Net assets employed 2,145.5 2,190.1 1,779.0 1,406.6 1,002.6
Cumulative goodwill written off 543.7 518.2 544.8 597.3 598.7
Gross capital employed 2,689.2 2,708.3 2,323.8 2,003.9 1,601.3
77 Wolseley plc Annual report and accounts 2002 Five year summary
2002 2001 2000 1999 1998
Earnings per share before exceptionals and goodwill amortisation 54.58p 47.43p 41.79p 38.08p 32.70p
Earnings per share after exceptionals and goodwill amortisation 49.96p 32.17p 33.24p 34.69p 30.80p
Dividends per share 18.90p 16.90p 15.35p 13.75p 12.50p
Cover for ordinary dividends before exceptionals 2.6 2.6 2.6 2.6 2.6
Gearing ratio (note 1) 34.1% 46.4% 34.3% 28.2% 4.3%
Net tangible assets per ordinary share 189.86p 177.36p 182.27p 160.03p 167.71p
Return on gross capital employed (note 2) 16.7% 16.5% 16.9% 17.0% 17.5%
Average number of employees 37,136 34,734 33,385 28,582 25,833
Aggregate wages and salaries £m 896.8 817.2 712.8 605.1 517.0
Number of shares in issue at year end (m) 577.9 576.3 574.8 574.0 573.0
Number of branches at year-end 
European Distribution 1,799 1,615 1,443 1,357 1,037
North American Plumbing and Heating Distribution 924 911 591 504 469
US Building Materials Distribution 216 220 210 131 116
Total branches 2,939 2,746 2,244 1,992 1,622
US Dollar translation rate
Profit and loss 1.4569 1.4464 1.5836 1.6360 1.6496
Balance sheet 1.5622 1.4252 1.4977 1.6200 1.6360
Euro translation rate
Profit and loss 1.6085 1.6299 1.6017 ––
Balance sheet 1.5934 1.6289 1.6163 ––
French Franc translation rate
Profit and loss – –– 9.6942 9.9326
Balance sheet – –– 9.9287 9.7503
Note 1.
The gearing ratio is the ratio of net borrowings, excluding construction loan borrowings, to shareholders’ funds.
Note 2.
Return on gross capital employed is the ratio of trading profit (before loss on disposal of operations and goodwill amortisation) to the
aggregate of average shareholders’ funds, minority interests, net debt and cumulative goodwill written off.
78 Wolseley plc Annual report and accounts 2002 Principal committees of the board
Audit committee
David L Tucker – Chairman
(until 12 April 2002)
James I K Murray - Chairman
(from 12 April 2002)
John M Allan
Richard Ireland
Remuneration committee 
John W Whybrow – Chairman 
John M Allan 
Robert M Walker
Nominations committee 
Richard Ireland – Chairman
Robert M Walker 
John W Whybrow
Treasury committee 
Richard Ireland – Chairman
Charles A Banks 
David L Tucker (until 12 April 2002)
James I K Murray (from 12 April 2002)
Stephen P Webster 
Michael J R Verrier
David A Branson (until 30 June 2002)
Group information
Head office and registered office
Parkview 1220
Arlington Business Park
Theale
Reading RG7 4GA
Telephone: +44 (0) 118 929 8700
Fax: +44 (0) 118 929 8701
Website: www.wolseley.com 
Auditors
PricewaterhouseCoopers
Corporate brokers 
UBS Warburg
Schroder Salomon Smith Barney
Solicitors
Freshfields Bruckhaus Deringer
UK Registrars
Lloyds TSB Registrars 
The Causeway 
Worthing 
West Sussex BN99 6DA
Telephone: within the UK: 0870 241 3934
from overseas: +44 (0) 121 433 8000
American Depositary Receipts
The Bank of New York 
Investor Relations 
PO Box 11258 Church Street Station 
New York, NY 10286 – 1258
Telephone: within the US toll free: 
1-800-BNY-ADRS 
from overseas: +1 610 312 5315 
NYSE specialist firm
Spear, Leeds & Kellogg
120 Broadway
6th Floor
New York, NY 10271
79 Wolseley plc Annual report and accounts 2002 Group information
Shareholder information
Shareholders can now register on-line to view their Wolseley plc shareholding details using Shareview, a service that has been launched by
our registrars, Lloyds TSB Registrars. To access the service, you should log on to www.shareview.co.uk and complete the simple on-screen
registration process. You will then need to enter your surname, postcode, e-mail address and shareholder reference number (which is
detailed on the form of proxy accompanying this Report).
By logging on to www.shareview.co.uk, you will be able to do all of the following at the click of a mouse:
• check your shareholding in Wolseley plc 24 hours a day;
• register your e-mail and mailing preference (post or electronic) for future shareholder mailings;
• gain easy access to a variety of shareholder information including indicative valuations and payment instruction details; and
• use the internet to appoint a proxy for you at general meetings of the shareholders.
The company can, at shareholders’ request, send shareholders an e-mail notification each time a new shareholder report or other
shareholder communication is put on the website. Shareholders will then be able to read and/or download the information at their leisure,
but will still be able to request paper copies of the documents should they so wish.
Stock Exchange Listings
The ordinary shares of 25 pence each of the company are listed on the London Stock Exchange. Ordinary shares of the company are also
traded on the New York Stock Exchange in the form of American Depositary Shares and held in the form of American Depositary Receipts
(“ADRs”). ADR holders receive the annual and interim reports issued to shareholders. The company files a form 20-F each year with the
United States Securities and Exchange Commission.
Published Information
Further copies of the Annual Report and the 2002 20-F may be obtained from the Corporate Communications Department, Wolseley plc,
Parkview 1220, Arlington Business Park, Theale, Reading RG7 4GA. Company information may also be viewed on the company’s website
at www.wolseley.com
Financial calendar 
Annual General Meeting Friday 13 December 2002
Ex-dividend date Thursday 2 January 2003
Record date Monday 6 January 2003
Last date for new DRIP elections Friday 10 January 2003
Warrants and counterfoils posted Thursday 30 January 2003
Dividend payment date Friday 31 January 2003
Dispatch certificates and statements (DRIP) Thursday 13 February 2003
Interim announcement date Tuesday 18 March 2003
80 Wolseley plc Annual report and accounts 2002 Wolseley plc 
Annual report and accounts 2002
1 Financial highlights
2 20 years of sustained growth
3 Chairman’s statement
4 Group Chief Executive’s review
16 Our people in the community
18 Operating and financial review
28 Our directors
31 Report of the directors
33 Corporate governance
40 Remuneration
45 Group profit and loss account
46 Balance sheets
47 Group cash flow statement
47 Group statement of total recognised
gains and losses
48 Accounting policies
50 Notes to the accounts
73 Auditors’ report
74 Principal subsidiaries and undertakings
76 Acquisitions
77 Five year summary
79 Group information
Contents
The group has established itself as the
world’s number one distributor of heating
and plumbing products and is a leading
supplier of builders’ products to the
professional market. Wolseley is an
international business, operating nearly
3,000 branches, in 12 countries in Europe
and North America, employing some
38,000 people. The group’s strength 
is to operate strong national businesses 
in home markets, retain local brand
superiority and continually exceed
customer expectations through wider
product ranges and superior service.
Wolseley plc 
Parkview 1220
Arlington Business Park
Theale
Reading
RG7 4GA
United Kingdom
Telephone: +44 (0) 118 929 8700
Fax: +44 (0) 118 929 8701
www.wolseley.com
Wolseley plc Annual report and accounts 2002