Plumb Centre parent Wolseley has announced proposals to create a new group holding company which will be UK listed, incorporated in Jersey and have tax residence in Switzerland.
The changes to its corporate structure aim to enable the group to achieve "a competitive effective corporate tax rate", according to a statement released by the company today, but will not change the tax position of the UK business. Wolseley generated 81% of its revenue overseas for the year to July 2010.
The implementation costs of the changes, which are still subject to shareholder approval, are estimated to be around £6m and are expected to become effective in late November.
The group also announced pre-tax losses of £328m for the year to July 31, 2010, down from £766m in 2009. Gross margin maintained at 27.7%, with operating costs down by £353m (10%). Trading profit was up £3m to £450m, despite a fall in revenue of 6% on a like-for-like basis.
In the UK, trading profit for the year was £36m ahead of 2009, at £91m, £23m of which arose from the exit of the business in Ireland. Plumb and Parts Centre performed well and ahead of last year, said the report, while Build Centre improved its trading performance and returned to profit, benefiting from a lower cost base.
The company sold its Brandon Hire business in August
as part of a strategy to concentrate on core business activity.
Chief executive Ian Meakins said: "Demand across our markets remains mixed and the economic outlook continues to be unclear. Revenue growth in the early part of the current financial year is similar to that seen in Q4 last year. We will continue to take actions that will strengthen the business and, whilst overall we remain cautious about the outlook for our markets, we are confident that Wolseley will make good progress in the year ahead."
The company also announced that Gareth Davis is to succeed John Whybrow as chairman after the AGM in January. Mr Davis has been a non-executive director of Wolseley since 2003.