Ian Meakins - Group Chief Executive: Got off to an early start. Good morning everybody. I am here with John Martin, CFO of Wolseley and I believe our (guest) Chairman is lurking somewhere. Mr. Gareth Davis in the corner here.
Welcome to the Wolseley half year results. I will just do brief summary and then hand over to John and then come back and give a summary of where we are on the strategic development of the Group.
Overall, we made decent progress again in the last six months, driven by very good performance in the U.S. However, the economic slowdown in Europe has affected our markets, especially in that Nordics and even more so in France. We have achieved reasonable like-for-like growth and gained or held share in most of our key businesses.
There has been no letup in the pricing environment, especially in Europe where we have been fighting for every order, but we continue to work hard to offset this pressure and overall across the Group we managed to nudge our gross margins up a little.
The control of operating expenses has been good across the Group. Our operating expenses increased by 2.7% in constant currency. We have slightly reduced headcount by more than 1,500 heads before acquisitions, which is about 3.7% of our total workforce. We'll retain this operating discipline and we have further cost reductions plans to make sure that we protect our margins going forward.
The costs of performances were impacted significantly by widely different market conditions. We continue to make good progress in the States, U.K. Canada and Central Europe performed pretty well in difficult markets, Nordics demonstrates how resilient our strategically strong businesses are in tough markets and it was disappointing to go into losses in France, but our teams have thought extremely hard to try and reduce operating expenses in line with rapidly declining new residential market conditions.
As John outlined we have good plans to address our underperformance in France, these plans are of course subject to employee consultation and competition terms. We have also managed to increase group margins and delivered reasonable leverage by productivity improvements on a slow top line performance.
So in summary, we believe we are well placed to generate a very good growth in the States and we will continue to take significant actions in Europe to protect our business. We will continue to invest where we see growth and where we need to improve our infrastructure for the longer term.
John, over to you.
John Martin - CFO: Thanks very much Ian and good morning to everybody. Given the difficult economic conditions in Europe it's great to be reporting like-for-like growth albeit just over 2% driven a strong performance in the U.S. The pricing environment in the period was demanding but we also improved gross margins. Costs are well under control.
Trading profits of GBP324 million was 7.6% ahead and the trading margin improved to 5.2%. Net debt increased after very large dividends, pension payments and also investments in shares for the employee shares schemes in the second quarter and we are proposing a 10% increase in the interim dividend to GBP0.22.