The Directors submit their annual report and the audited consolidated financial statements of the Company and its subsidiaries for the year ended 31 July 2008.
Principal activities and business review
Wolseley plc is the parent company of the Group and its operating subsidiaries are organised into two geographical divisions, which are set out in the Performance review. The principal activities of the Group are the distribution of plumbing, heating and air conditioning equipment, pipes, valves and fittings and building materials (including timber) within Europe and North America. In the USA, the Group also supplies other construction and installation services. In the UK, France and Austria, the Group operates tool hire centres and, in the UK, France and USA, it distributes electrical components and supplies. Details of the development of the Group's businesses during the year, including an assessment of the Group's exposure to financial risks and how these are managed, and information which fulfils the requirements of the Business Review, are given in the Performance review and in the Group Chief Executive's review, which are incorporated into this report by reference.
Results and dividends
The Group's consolidated income statement, shows a decrease of 60 per cent in Group operating profit from £753 million in 2007 to £301 million. An analysis of revenue and trading profit is given in note 2 to the financial statements. Details relating to post balance sheet events are given in note 42. Shareholders were paid the 2008 interim dividend of 11.25 pence per share (2007: 10.85 pence) on 30 May 2008. No final dividend is recommended for the year ended 31 July 2008 (2007: 21.55 pence).
The Wolseley plc 2004 Overseas Employee Benefit Trust, the Wolseley plc 2004 Employee Benefit Trust and the Wolseley plc 2004 Directors Benefit Trust were established on 5 October 2004 in connection with the Wolseley Share Option Plan 2003 and the Wolseley plc 2002 Long Term Incentive Scheme, details of which are set out in the Remuneration report. The trustees of each of the trusts have waived their rights to receive dividends on any shares held by them. Following purchases of shares in the capital of the Company made between November 2004 and January 2007 and the vesting of 6,472 shares in March 2008, the trustees of the Wolseley plc 2004 Employee Benefit Trust hold 6,193,528 ordinary shares in the capital of the Company and the average purchase price was 1174.7 pence per share (excluding dealing costs). The amount of dividends waived that would have been payable during the year ended 31 July 2008 was £2,032,872 (2007: £1,572,000).
Change of control
The Company does not have agreements with any Director or Officer that would provide compensation for loss of office or employment resulting from a change of control following a takeover bid, except that provisions of the Company's share plans may cause options and awards granted under such schemes to vest on a takeover.
All of the Company's share schemes contain provisions relating to a change of control. Outstanding options and awards would normally vest and become exercisable for a limited period of time upon a change of control following a takeover, reconstruction or winding up of the Company (not being an internal organisation), subject at that time to rules concerning the satisfaction of any performance conditions.
Acquisitions and disposals
Details of acquisitions and disposals made during the year are contained in the Performance review and in notes 33 and 35 to the financial statements.
Future development
It remains the Board's intention to develop the Group through organic growth and by selective acquisitions. The Board will aim to position the Group to meet the challenges created by the current market conditions with actions designed to achieve the best long-term value for shareholders whilst ensuring that the strategic objectives of the Group are not compromised, in order that the Group is in a position to capitalise from the opportunities created by any market recovery.