Insider Media Limited

Wolseley has returned to profit after posting pre-tax profits of £195m for the six months to 31 January 2011. This is up from a loss of £261m in the corresponding period last year. Revenue was up five per cent year-on-year to £6.6bn at the Leamington Spa company, which is the world's largest supplier of heating and plumbing products by market value.

Trading profit rose by 64 per cent to £275m, while net debt was cut to £933m from £1.4bn a year earlier.

As a result, the company is paying a 15 pence dividend to shareholders. Last year no dividend was paid.

The company made two major disposals in the period, selling Brandon Hire for £42m and its Italian operations for £29m.

It also made three bolt-on acquisitions, including US based Summit Pipe and Supply for £6m and L-BYG Alfred Nielson NS, based in Denmark, for £1m.

Chief executive Ian Meakins said: "This was a good first half performance, driven principally by resilient RMI markets and the considerable attention that we have paid to improving customer service, protecting gross margins and controlling costs.

"Construction markets have now broadly stabilised in most of our geographies, particularly the new residential and RMI segments in the USA. The overall macro-economic environment in several regions continues to be fragile and pricing competition remains intense. The impact of recent VAT increases and government spending cuts leaves the outlook in the UK more uncertain.

"We continue to maintain our emphasis on protecting market share and gross margins while keeping a tight control on the cost base to maximise operating leverage. The group expects to continue to grow in the second half of the year, though the comparatives will now be much more demanding.

"The reinstatement of the dividend reflects the strength of our balance sheet and our confidence in the future trading prospects of the group."