All right. Good morning, everybody. Welcome to the Wolseley Half Year Results. In terms of the highlights, we saw good improvement in like for like growth at the topline and good gains in market share. This was driven across the group by improvements and better service, product availability and the scale and efficiency of our sales teams and more tailored customer propositions. Clearly the U.S. had an excellent six months and we did see improving topline performance in the rest of the group as we planned. Gross margin progress remains a constant battle. Our initiatives around managing our mix better, improving pricing management and better sourcing are all gaining traction, but as we begin to see recovery in markets, there is also some growth in lower margin segments, new residential and commercial and in the U.K., the heating products market. However we absolutely believe, we can grow our gross margins over time. We do not believe that we have to accept lower gross margins to gain share. We know that there are plenty of profit actions we can execute better to offset the margin pressure we feel. We've continued to invest in gaining share and improving the efficiency of our business model. This work is beginning to pay back in the U.S. as you can see from the leverage we delivered and we believe we will see the same in the rest of the Group as markets recover slowly. Flow through was good in the U.S. at 12%, but disappointing in Europe, driven by increased investment to drive growth and some gross margin pressure. However, we do expect to see better productivity and profitability in the second half of the year. Net our whole focus continues to be on executing our strategy as effective as we can. Now let me hand over to John who'll go through the numbers and I'll come back and give you some color on the progress and some of the initiatives that we're undertaking.

Thank you very much Ian and good morning, everybody. At this time last year, we said we were going to redouble our efforts to get a bit more topline growth into the Group and it's great to see now that we got the best topline growth that we've achieved since the financial crises with growth at constant, rates of over 10% in total and 7.8% on a like-for-like basis. The cost price of our products over the last six months has fallen slightly with lower commodity prices giving us modest deflation in the U.S. in Central Europe and in the U.K. That makes the growth we've achieved even more valuable. Despite that deflation and some FX headwinds, like-for-like gross margins were slightly ahead in the period. The trading profit of our ongoing business of £390 million is 12% higher than last year and that's despite the investment that we've made in the continuing development of improvements of our business model. The trading margin is 20 basis points higher than last year and now we're closing in on that former peak of 6.3%. Headline earnings per share 13.3% ahead and our net debt, which is usually at a seasonal high in January is in line with expectations after the final dividend and after share buybacks of £1.2 billion. Ferguson has delivered a really sparkling performance with topline revenues up 11.7%. Market conditions across the United States are good with market growth of just over 5%. Residential growth rates have slowed a little, consistent with housing starts and also with house price indices, but commercial markets have picked up a little though the AIA Commercial and Industrial Index came up a little last month. Overall the market in the U.S. looks fine. We've got no reason to believe that it's going to…

Great, thanks John. Good look, our strategy has basically remained unchanged, but clearly we are emphasizing different aspects of it now and the bulk of the group-wide resource allocation work has now been completed and as we explore ways to exit our last business in France, this is the remaining significant action of getting the right portfolio of businesses in the right geographies, assuming of course this business perform well going forward. So now we’re focusing more on point three, accelerating profitable growth, both organically and by bolt-on M&A and also point for improving the efficiency and productivity of our business model. Most of the group synergies are being captured and John has also explained how we planned to keep an appropriately geared balance sheet going forward. So today I want to focus on points three and four. For points three, specifically how we're accelerating organic -- growth organically, we review progress on bolt-on M&A at the last set of results. For point four, how we're trying to improve our productivity and generate the benefits of scale we know exists, specifically today looking at how eCommerce is becoming an important channel for our customers. In terms of the growth end, the first half has shown a significant pick up from the low point of the first half of 2013. We’re now at 7.8% like-for-like versus 3.6% two years ago. Clearly this has been driven by better like-for-like growth in the U.S. where we are now hitting 11.7%, but we’re also growing again in the U.K. by just under 2% and the Nordics is growing again by nearly 3.5%. Overall the trends are improving, although H1 was particularly strong flat compared with some weak competitors of last year. That’s why we believe that about 6% growth is the right forecast for…

Good morning, Andy Murphy from Bank of America, Merrill Lynch. Two questions, first of all on the e-commerce slide, obviously things are moving quite quickly and it's obviously offering you a lot of opportunity. Can you just give us a flavor for the like -- well, the growth rates you quoted? Are they including M&A? I suspect they might be. But perhaps more importantly could you maybe, if you can, give us a flavor what margin improvement a growing proportion of eCommerce might be able to offer the Group? And just secondly on the potential disposals in France, could you give us a flavor for the amount of cash that might be raised, if that's possible? And just a flavor of what might be left after disposal in terms of properties and what income that might generate. Thank you.

Just on eCommerce, all the data we got there was organic eCommerce. We haven’t got the M&A information of past empire or anything like that or Build.com. So all the data is organic and look, in terms of margin improvement as I said, we are seeing, I mean this is why we’re encouraged by, now this may just be a function of the customers who adopt early, so we can’t be absolutely sure that it will happen across the whole of the customer base, but a little bit of an improvement in the basket size people are buying a few more items, it seems as if they're being more planful about it. Secondly, marginally, marginally better gross margins and that’s predominantly because people -- customers can’t effectively negotiate with this, they have a set of trade terms or discounts. If they come into the branch, they will often -- they have big job want to negotiate again. So we're seeing -- when you're buying online, you don’t have that opportunity, and thirdly, just slightly better net margins for us as well because it is lower cost to serve channel for us. So if we got to 50% of our business, how much of impact it will have be very difficult to tell at the moment, but it positive for us. France, do you want to…

France, yes, so I mention we got about £60 million of working capital assets on the ground in building materials business and I think it would be optimistic to think we're going to recover those. That’s where my £60 million to £70 million estimate of loss of disposals comes from. There are about the same again in terms of property assets, real estate assets, associated with our business. It would be disappointing not to be able to recover those. So we ought to be able to exit France with the receipt of our property valuations of about £60 million or £70 million.

Does that exclude the wood solutions businesses?

Yeah, the wood solutions business. All the accounting has gone through except for there are some loan notes on our books, but they're not material Andy.

Thank you.

Just pass it forward.

Howard Seymour from Numis, a couple for me. Firstly, could I just start on the U.K. because there is sort of two things you mentioned. One, the markets are weak, but two competitive -- difficult to quantify, but do you perceive that the biggest issue at the moment is the weakness of the market because you mentioned you're a bit happier about life going out in the second half because there does appear to be an element of market share war going on between the two biggest players?

Yes, look I think the -- actually if you look back over the last five years, in fact you take the market share of ourselves and our nearest competitor - actually together, we have actually gained market share. Now clearly we've been -- we have and we do compete absolutely head to head with Travis, day in and day out, but I think your point is well made. At the moment it's more to do I think with market weakness than maybe there are probably three things going on, but the market is weak. John outlined why, because there was lot of Eco activity a year ago that hasn’t now -- Eco too hasn’t kicked off, it only kicks off in April and our suspicion is that because of the election, all the big players will be waiting to see what happens in Eco-2. Eco-2 is quite a lot smaller in the boiler activity. It's about 15% in quantum terms. Secondly, you do have to have two measures of efficiency improvements to get a qualification and thirdly some of the big players did have some hangover from Eco-1 over delivery that they can use to count an Eco-2. So we're not anticipating anything like the disruption that we saw in Eco-1. I think the other factor is clearly the boiler manufacturers have been -- they've had a very tough time in the last six months. They had a good time a year ago. They've been very aggressive in the market as well. So I don't think it's just down to the distributors.

Okay. And secondly probably a general question, but you mentioned that the sales management, what you're doing there etcetera, does that require a change in terms of the incentivization to the salesman as well because obviously you are from the one hand you're judging them too aggressively. But on the other hand do they then expect a bigger share of the wallet as a result?

Yes, I think look across all the classes and it does vary quite a lot between the classes. I mean the U.S. has got a well established commission structure based on the metrics of gross margin and then obviously the scale and size of the customer that they're dealing with. That has worked very well and you can see it in the results and we pay our salesman good commissions in the U.S. In Europe and when we come back to Europe, the commission structures are far less -- historically have been far less ambitious and we've increased the degree of leverage in those schemes and that is part of the reason why cost in H1 have gone up a bit. We have put more money at risk in terms of these incentivization schemes. We've also I think become because of the data we've got now, we've been able to really penetrate the management, the day to day management of the sales teams and bluntly weed out the really strong performance from the not so strong performance and making sure that the strong performance are really getting the rewards that they thoroughly deserve. So I think we like to move all of the businesses more towards a more [mortgage] [ph] commission structure and bluntly we've got to test our way to get to the right position here. We just don't know in the U.K. and Nordics and also in Canada as well where will be the right sort of balance between incentivization and topline trading off a bit, but I think we still got a fair way to go in that respect, but we're working -- it's a good point -- we're working very hard to get those incentivization schemes to work for us now.

Thank you.

We'll go directly behind those two gentlemen.

Hi, Gregor Kuglitsch from UBS. Can I ask a question on the Scandi, it's obviously in more difficult reflecting I think your impairment charge, can I -- could I get a sense to what you think this business can go to long term? I think you're now sort of 4% margin, it used to be north of 7%. Is there any reason why you think you can't get there and perhaps some kind of view on how quickly?

Sure.

And the second question is on U.S. flow through. You mentioned 12%, I think in the second quarter it was quite a bit lower than that. Can you may be elaborate on expectations of flow through rates from here obviously with the higher level now in terms of revenue base and have quite a bit. And then finally in terms of -- you're obviously getting rid of France, now you've got relatively small Continental European business left is performing well. Is there any reason, I know it’s performing well, but is there any reason that should remain in the group considering a sort of a little bit isolated now. Thank you.

Sure. I’ll do one and three John, you can have a crack at two here. Look in terms of Scandi yes, we do think we can get back to far better margins than we have now. The peak margins in Scandi was about 7.4%. That was let me stress that was at a time when a buy-out company was selling it to us and we were undoubtedly paying, I think a full, very full price. The reason for that is several fold, firstly, we didn’t see any structural differences or any material major shifts in the market that would prevent us from doing; our gross margins are very similar to where they were pre the recession, so there hasn’t been a decline in gross margins, and clearly in a market like the U.S. where we’ve now had four or five years of good growth, you can see what we can do in terms of net margins and it's pleasing to say that we're now well ahead of our historic peak. But I think as we've always said, we do now need three or four years of good growth in the market that we're playing. Scandinavia has been I think it's been a surprise to us in terms of actually out of the recession, the first two years out of recession, if you would back at the numbers. We actually did get some good leverage. We got the margins back up to the sort of 5.7 to 5.8 levels and it’s come down again since then which is disappointing. But the markets have been very tough for the past three years. Only in the last six months, literally we've begun to see a little bit of growth in Denmark. I think some reasonable growth in Sweden, but Finland as you all…

Yes U.S. flow-through in Q2 was sort of slightly lower than I guess we had expected. We lost a trading day, which has an impact. The GM was tough, it was quite tough going on margins in Q2 in the U.S. and then the third is the acquisitions were quite dilutive as well. You can see that in the numbers. So I think going forward, we haven’t changed our outlook, our view, we haven’t changed the team. We haven’t changed its view. This is very much is a 12-week period. So we're looking forward to getting better flow through than we had in Q2 going forward.

Okay, good thank you.

It's Paul Checketts from Barclays. I've got three questions as well please. The first one is on the U.S. opportunity Ian, perhaps could you summarize what you think in the U.S. really are the biggest opportunities either by vertical of by geography as opposed to New York. It sounds like it would be on that list. And the second is on the acquisition of BathEmpire, I appreciate its not new news today, but perhaps you could explain what it was that attracted you to this business because I know there is another one out that was probably on the agenda and what’s the strategy from here to grow that and as a second part of that, why was the Build.com didn’t work in the U.K. And the last one for John please, maybe you could outline what the M&A pipeline looks like at the moment?

Sure, look I think in the U.S., we've -- we really do see a sort of metrics here of growth opportunity. We can see very good growth in all of our core lines of business. Our Blended Branches business, we've got an 18% absolutely market share. We're the market leader. There is a huge amount of fragmentations still to go. So a lot of organic growth there across the whole of the geographies, certainly organic, but also we would do bolt-on M&A whenever we see that coming up and we will take that opportunity. Waterworks, we're over 20% market share, we're the number two player just behind HD Supply, again lots of opportunity for organic growth there. We would take all of the big metro areas and look to see how we could expand that business, probably more limited in terms of bolt-on M&A because in certain states, we will be probably running into some competition issues and very few of those companies will come up for sale. But exactly the same we would say for HVAC, industrial and also in terms of fire and fab and the B2C eCommerce business, we want to grow all those businesses organically and sensible bolt-on M&A and to your point geographically, it really is now far more around the big metro areas as I outlined. Sure New York is a huge one, we've put a lot of capital deployed there. We won’t need to deploy the same amount of capital obviously in some of the other metros. We’ve already got good infrastructure. DC's a branch that we can use, but absolutely we see a huge, huge way of growing organically across the dock. In terms of BathEmpire, it’s a very nice business. It is predominantly driven by an own label offering, the BathEmpire offering and that’s what really attract -- so the size, the scale the growth and the own label nature of the business, which does give far higher gross margins and that was really the reason why we were not succeeding in TapOutlet, UK the business that we set up because we were selling branded product there, they weren’t own label and the gross margins were just nowhere near the degree or the level that we thought was going to be exciting for us moving forward. So I think BathEmpire for us and had we not acquired BathEmpire, we were absolutely going to do this organically. So it came along at the right time for us.

And in terms of M&A pipeline, John?

M&A pipeline there are eight to 10 opportunities in the M&A pipeline at the moment, $300 million or $400 million turnover in total. So it does move quite a lot, if one or two is the larger end of those, so it just move a little bit month-on-month, but it's nice to land some of those in the second half. There is nothing very large in that pool.

Good, thanks and just last one is on Chicago is that possible organically to replicate?

It will be a combination of organic and bolt-on M&A in Chicago. Again, we would like to do more bolt-on M&A, but if not we will be doing it and are doing it organically now.

Can you pass the mic to Tom behind you?

Thanks very much, Tom Sykes from Deutsche Bank. Just a few questions on the U.S. please. So firstly just you mentioned the gross margin was a bit weaker in the quarter in the U.S., were you getting a benefit though of Workers Comp rates coming down? So was the gross margin include those and if you haven’t got the benefit yet, would you expect the benefits of those to come through over the course of the second half and then just when one looks at the gross margin improvement over the last say three years, could you say roughly how much of the operating margin improvement has come from gross margin improvement and how much may have come from leverage overall of advantages leveraging the business. And then just finally, you gave that diagram, which you’ve given before of the percentages of market share by state. I just wondered if you could say how consolidated your business is in say the top five states in the U.S.? How important -- how much of sales and in particular perhaps at the moment, how much of the growth of the accounting for it as well please?

Yes, so gross margin Workers Comp is totally irrelevant to our cost space. So it’s not -- it’s just immaterial Tom. G&A over the last three years it’s a nice, it is an adult. Why have we been relentless in talking about gross margins, since Ian and I arrived to the business? The reason is to make sure that we don’t get them beat down because it's very hard work when they start getting bid down, but most of the leverage has come through volume growth essentially that is very important in the business. The third is the top -- the revenue of the top five states is 45% that is pretty similar to the GDP of those top five states, you can guess which certainly four of them are and given that our home is Virginia, we can probably guess the fifth. So the growth though is very broadly based. The growth in those states, there is no significant difference between the growth in those top five states and the growth in the other 45 on a percentage basis obviously the numbers are bigger.

Okay. And just would you be able to split out Texas from that and how important…

Texas is about 10% of the U.S. business.

And growing...

And growing similarly to the U.S. business.

Okay, great. Thank you. And just going back to what you said about the gross margin, and I think you did say before the gross margin was mainly plus minus 100 basis points over the course of the cycle. So therefore have you seen that kind of movement in the U.S. gross margin given that you’re stating that your back at record highs?

On the net, well we're back at record highs on the net margins of 7.9% as it happens that gross margins are at peaks as well, but if you look back over time, the gross margin for 20 years is improved pretty consistently in the U.S. not every single year, but nevertheless if you put it on the chart, the chart goes from the bottom left to the top right and I look it’s a few percent, I mean it sits 2.5% over 20 years.

Okay

But that's the sort of progression that we've had, that’s neither accelerated nor decelerated particularly in the last two or three. Lots of different reasons by the way for that margin at different points in that evolution, does that answer the question.

Yes, it does thank you.

If we pass the mic across in front quick...

Yeah, morning Yuri Serov of Morgan Stanley; a few questions not that many. First of all on acquisitions, may I just ask you a bit more specifically, you only spent £28 million in the first half then you had five more acquisitions since the ending of the period? What is your expectation on the total spend including those five for the full year and also, could you also give us your expectation as to whether you think that you’re going to spend on acquisitions more in your fiscal '16 than in this year? What's your intention and yes, I know that it's hard to predict and it's lumpy, but from your perspective what are you desires, what are your plans?

So as you said in the first half the investment was about £30 million, since its yearend, it's been about another, sorry since the end of the period, it's been about another £50 million. If you look at sort of conversion of the pipeline are we going to get to £200 million this year, don't know. So likely to be less than £200 million, I would think £150 million is a decent estimates. Don't hold me to that in six months time. Next, we haven’t really changed over view Yuri on sort of the likely incidents of M&A coming up and our ability to sort of system through and convert the ones we want to £200 million or £300 million a year would be -- would continue to be our estimate of what we're likely to bring home.

And your expectation is that that level, will basically remain in the future years. You don’t expect to grow at I don’t know 25% every year.

Well, I think it will be -- I think they're volatile. I think we said before, we've looked to sort of three or four over the last sort of four or five years, which have been quite a lot bigger that was sort of break through that. I think they will continue to be somewhat lumpy if you bring one of those home by which you mean, if there arises an opportunity and it stacks up in due diligence and we really want to buy it because we add value to it, then it's quite binary. So I don’t really see that it will step up at 25%. I think it will be volatile along the way and £200 million to £300 million remains our best view of the likely range.

Okay, thanks. The next question if I may, so you’re pushing for market share in many markets. In the U.S. you're growing very rapidly faster than the market. At the same time there is price deflation and we’re talking about gross margin pressure. Is there a correlation there? Are you being more price competitive, is that your current tactic and you’re also talking about investing and increasing your revenue more now than in the past.

Yuri look no, very, very specifically, we do not want to become share gainers by reducing our prices, okay. I think we’ve highlighted quite clearly, as the markets have come back, there is growth in new build, new build be it residential, commercial or institutional or industrial is the contracted work that is lower margin work. So as you get market growth recovery, there will be margin pressure point one. I think the second thing is we are very explicit with our teams about what we’re trying to achieve here, which is to manage the mix of our business to improve our gross margins going forward. So there is no desire for us to reduce price on a given product or given SKU to gain share. Now around the edges at the margin there’s bound to be some element of that. Clearly we can’t control 8,000 sales people on a day to day basis. And we have made it very clear in the company we do want to step up our rate of organic growth, but not at the expense of gross margin. So the good news in the states we've managed to hold our gross margin and nudge up a bit. In the Nordics, we got good growth and held our gross margin. We talked about the U.K. it was disappointing from a gross margin point of view and the team are hard at it trying to improve the mix of the business, because where the gross margin improvements have come from over time, is not by selling more of a standard SKU, it’s by improving the mix of the business. So selling more plumbing equipment a bigger showroom business, more pipe valves fittings business, more drainage products, those are the products where there are far higher margins and better pricing control. So we believe there’s still a hell of a lot that we can do to gain market share, but to do that profitably without increasing the price pressure.

There’s probably just wroth commenting Yuri on deflation and what we mean by deflation that’s a measure of our input prices, our purchase prices. So we said that in the U.S. and U.K. and Central Europe, this time we got modest deflation. Actually it was less than 1% and we got modest inflation in Canada and Nordics of about the same amount. And then the only other sort of area where deflation really has shown if you’ve got commodities, you know copper has come off for example quite a lot over the last couple of years. Some of our customers are quite sensitized if you’re buying copper pipe, a lot of those customers know what the copper input is. That's not reflected in our pricing strategy. Our pricing strategy in a sense is independent, because we’re trying to edge our margins up. So we’re not trying to use price or deflation as a way of sort of gaining share and reducing our margins that’s not there, that’s not in our talk.

Okay. And if I may just one last question. On the branches are you starting to add more branches to your network you are showing two or three additions in the U.S. some of that will be acquisitions I don’t know when maybe you publish the number how of much of that acquisitions is just didn’t notice. Can you talk about that a bit?

Yeah it’s in the appendix. So you’ll see the branch movements in the appendix. But just overall, there is some branch expansion. I touched on to for example Canada, we have some very specific opportunities and we have not been able over time to find the acquisition opportunities. And therefore we’re absolutely pursuing a Greenfield strategy, we’ll also continue to look at M&A. If you look for example in the U.S. something slightly different is happening where we’ll be looking at the network and see is that the best network to reach -- to reach and service the customers. So in some instances, we’re still doing some modest consolidation. Look it’s not a lot, but I think you’ll see the network remaining fairly stable in terms of numbers, of course over time, we’ll need a bit more volume to put more volume through in some areas. But I don’t think you’ll see the whole shape of the network changing very substantially except where we’ve got areas like New York and Ian talked about where we’re absolutely trying to expand our footprint substantially.

But your revenue growth is continuing how much more capacities do you have in your branches? At some point to continue growing you probably will need to start adding branches even if you don’t want to capture new areas, but simply just to service the business in the existing…

And if you go back sort of five years, we had a lot of questions about how much surplus capacity was there in the business. That’s not how we think about our business. What we really think about is what you’ve got all the channels and you’ve got fulfillment channels. Those fulfillment channels include Supplier Direct, they include DC Direct, they will include -- will include now Hub Direct to Ian's point about for example the cyclical ship hub, branch pick up and branch delivered. It's only really the branch pick up that needs you to have lots more branch space. So we need to see how important that fulfillment channel becomes as a part of the overall revenue growth Yuri. In some areas, yes we’ll need larger branches. You need a large marshalling area. You need to carry more local inventory. But for those other fulfillment channels, you don’t necessarily need more space close to the customer. That makes sense. So it will vary a little bit but I don’t think, we will see -- if you look now, we’ve had 40% something of growth over the last four years in the States and we haven’t added very much capacity at all into the U.S. and that's partly because of really trying to optimize the use of those fulfillment channels.

Okay.

Aynsley Lammin from Citigroup, Just given your comments on the run rate for likely runway for acquisitions and sale of France should we reasonably expect some more kind of share, capital returns and given the share price, we’re at balance should you have to announce a share buyback. Should that be -- should we expect that to be more in the form of special dividends and if you just comment on what should we expect in that 12 months in terms of scale as well. And then secondly just on the -- if you could confirm the kind of and what you think consensus trading profit for the full year is?

I am not allowed to make any comments about consensus because John will smack me, so definitely no. But just I think in terms of your adjusted balance sheet, we’re very clear we want to fund organic growth dividend, bolt-on M&A and then if we have spare cash we will return to shareholders. So we do that process every half year and every full year. It depends on conversations around the M&A pipeline, exactly where will be at the full year and then 12 months from now. So I don’t think, we've changed our view on that. It totally depends very much on where we are and I think we're kind of agnostic in terms of which way we get it back to shareholders, whatever is the best use at the time.

On consensus, I think yesterday night consensus was 855 for ongoing trading profit I’m getting some notes from 855?

Clyde Lewis from Peel Hunt. Two if I may. Just one on the comments in the U.S. and your competitors, you flagged up Grainger and Amazon as being best in class. Could you maybe just run through how you think you will fare compared to them and I obviously understand the differences versus Amazon but Grainger obviously there is little bit more of a similarity. So just wanted to go through that and whether you think you’re out or underperforming those two piece in particular and the second one I had was on the U.K., obviously there is change in management that is actually sort of knock on and have any other impacts in terms of sort of how the structure as opposed within the U.K. and within the European business will also post that management change?

Look in terms of Amazon and Grainger, if you take Grainger first and actually Grainger’s results seemed to have slowed down a little bit on the top line in the last six to nine months they're still a great business. So there is still very good and certainly from an eCommerce perspective, they have a penetration way up into the mid-30s getting a close on to 40% of that business. So we look at them as a very valid analogy for us. We don’t compete directly probably about 10% of our business is overlapped with them and look what we do is we benchmark our performance in all the functionality of our eCommerce offering, website availability, product availability, list all the way through it. Two, three years ago, we would have said, we would have been scoring versus Grainger six or seven out of 10. We’re now up at about nine out of 10. So I think we have done well to catch up. Still a lot more to do and again they keep moving forward, but I think we feel okay now about where we are in terms of our eCommerce offering versus Grainger clearly versus virtually all of our local smaller competitors in the states we're a long way ahead. We've invested a lot over the past five years. It would be CapEx wise upwards of $30 million, $40 million to put a really good eCommerce platform in place compared to the local competition, I think we're in very good shape. Versus Amazon you know two years ago they announced the launch of the Amazon trade offering. It doesn’t seem to have gone that well for them and if we look at the latest set of announcements, they look to have been as our American colleagues say sun-setting…

Thanks John Messenger from Redburn. Maybe if I could stick with that last question Ian just carry on for a moment, when you look at the U.K., obviously earlier we saw the 60:40 split in terms of sales kind of driven revenues. Can you give us a bit of a shape on what the U.K. actually looks like today because I suppose behind this I’m thinking with Steve leaving, is there not more fundamentally issue for the U.K. going forward in that you got 762 branches, big DC up in Leamington. When we look at one of your key competitors is doing the argument is look the cost certainly needs to be incredibly low for that kind of high volume contract market and we need a slim down network with DCs to deliver to that. Is there not actually a challenge for Peter coming in that actually the U.K. needs a pretty dramatic overhaul just make it fit for purpose or is there a sales mix differential that you would say look we still need the branches, we still need cross service offering, we have to have that. Second question was just on the guidance for U.K. and Nordic making progress in the second half, can I just be clear whether that’s on a like-for-like or including acquisitions because obviously Fusion Provida and Puukeskus were in the second half benefit or should be an accrual coming through there. So are you thinking like-for-like or is that with the benefit of the tailwind from acquisitions that you expect U.K. and Nordic progress? Third was just BathEmpire, can you give us an idea of what it means, how much have you bought in terms of the equity stake, because obviously we've minority going forward and was that the company you mentioned in USPG and about B2B offering, are you defining it as B2B or do you think it as B2C because you mentioned something around the $25 million in your speech and final one was just again in terms of actually I will stop there?

Good. John I will go to the first one as you could take two and three.

Yes.

John it's a fair challenge about the U.K. market, when we benchmark our overall sort of supply chain cost and look at it, it’s very competitive. We think it’s a good network to have as you rightly point out over 750 branches, which gives us good deep coverage to where we want to in terms of the plumbing and heating business in the Pipe and Climate business and the DC network is not just one DC, we have several across the country, we just opened up a new one to support the Pipe and Climate business and mission. So I think from a supply chain point of view, I would anticipate that we need to do radical changes there. We know it’s a good infrastructure. I think fundamentally we have got to get more volume through it, but more volumes through it at the right margin and to the earlier conversation there is still a hell of a lot more that we can do. Steve has done a good job getting us to where we to go to. We got out of some very unattractive businesses, he and the team did that very well, I think moving forward it very much is about though driving that mix of business. Relative to our U.S. business, we are significantly underpenetrated in the plumbing business. We have 40 showrooms if you do the math, we should and we absolutely planned to have 100 showrooms okay over a period of time. That is a better mix, higher gross margin business for us similarly our other business is the Pipe and Climate business is a higher gross margin business as well. And thirdly, I think the discipline that we have in some of our other businesses in terms of pricing management again we made good strides in the U.K. I think again there is more we can go at. We're just putting in now a place, a very good price guidance system, basically for every single item in the branch, it drags out the last six months worth of transactions across the whole of the branch network and says these are the ranges of pricing, you want to be pricing this you knit at. So you don’t need to guess it anymore. This is the price you ought to be going in at and this is the price that people are buying at. So it is robust and our people are really trusting. So we got that in 69 branches, now we’re planning to roll that out. So I think it is very much around managing more profitable volumes through the existing network rather than reentering the whole network. John do you want to add?

Yes the U.K. and Nordics the comment are really made on an absolute basis just reported versus reported. We expect reported profits to be higher in the U.K. and Nordics in the second half than reported profits last year, John. Just in terms of BathEmpire, we've acquired a majority stake. It turned over last year £26 million. We’re being very respectful to our joint venture partners in this. We still own a significant minority stake. So we’re not disclosing profitability in those types of things. It's not material actually to the Group. So we’re not going to disclose too much on that. What we’re going to do is support the business to carry on growing in the way that it has and try and get the best possible growth out of that business.

John that was a B2C business, it's B2B, apologies its B2C.

And sorry, there was one final just France. Just looking at the numbers because the 66 kind of just to be clear that, when you think of building materials France that is international wood solutions and BM is that total working capital numbers that you mentioned, is that correct?

No, the wood business accounting has been done, that’s what given rise to the exceptional item in the first half. The BM business, that accounting could not be done at the half year because you're not allowed to anticipate essentially a loss on disposal under IFRS 5.

So when we look at net assets at £129 million in terms of what's carried forward as discontinued, you're basically saying look we should get property back at £70 million and the other balance effectively we make at zero. Just on -- is that because we're talking working capital here, clearly I guess the diary issue in terms of what you have to basically get going with the business to get somebody to buy it, but is not an argument to actually just run the bloody thing down brutally or is there -- does the just property valuation rely on the ongoing business effectively as the rent grow.

I think it’s more the latter John because we’ve got 2,500 staff as well. So we need to be suitably careful with that, business loss $4 million in the first half and actually in the second half of course its seasonally strongest. So we should get to breakeven in the second half, but the market is in a very challenging place at the moment in France because you can see new starts that have come off very substantially and 50% of that business is serving the new built market. So it’s a tough all old market. Look hopefully we’ve been glum. It would be nice to stand up there in six months or 12 months however long it takes us and say, we've been glum and we got something for us. It’s just a -- its our best view at the moment John.

Thank you.

Sorry time for one more. I think if take the last one here.

Thank you. I've just got two questions to come back on basically answers that you’ve given. Firstly, I’m slightly struggling to understand the basis on which you took the goodwill impairment in Nordic. If you’re still saying its perfectly achievable medium term to retrace the sort of margin profitability levels that you've had in the past and secondly, when in respect of your 6% like-for-like second half in view of what was achieved in the first half again going back to your sort of commentary through the divisions. I’m sort of struggling to see which areas you seem is going to be growing slower than the first half?

Yeah. So, I think on the goodwill, if you look back, what you have with goodwill and I'll give the accounts in terms because Ian can give the positive stuff. The reality is if you look back two or three years ago over time, we have not achieved our expectations. As a combination of the market and finding other factors as well, but we haven’t achieved it and therefore, we have to look pretty, pretty totally up that as a bench of attendance and that’s what we've done. Clearly with our -- we’re absolutely going to define it at like hell to make that that business as good as we possibly can. The accounting for it, I think is just a reality of where the business is trading compared with where we expect it to be trading two or three years ago.

Yeah, I suppose the underlying question is there is no hint in what you're doing here that you're in any sense preparing to market the business or any other businesses.

No, that’s not the purpose of the accounting. The accounting is just done very coldly and very analytically, completely separate any commercial considerations are clearly, if we're going to market it you wouldn't. If we were going to market it last thing you would do is want to take an impairment. For the impairment review just stands alone it's a cold harsh analytical accounting exercise. Do we regret having to take, yes of course we do. It’s a relatively long time. We absolutely bitterly regret having to take an impairment charge, but we really bitterly regret is that we haven’t managed to achieve a better performance in the business. Does that make sense? Just on a like-for-like in the second half, I think if you look at the Q2 like-for-likes, they were clearly pretty good compared with weaker comparatives this time last year. If you remember this time last year Q1 going into Q2, we've had some lousy weather in the U.S. and the like-for-likes were quite a lot lower as a consequence. So today, the sort of Q1, Q2 like-for-likes particular in Ferguson have been comparatively stronger because they were against weaker comparatives. Now we are coming up against some pretty tough comparatives in Ferguson. First one and then second if you look around Europe, Finland, Switzerland and Canada as well, those three in particular have still got some headwinds. So we wouldn’t expect those necessarily to improve in the short term. So that’s the reason for our overall view on the 6% in the second half.

Thank you.

That was going back and actually we got no plans to market the Nordic business, just so we're crystal clear on that.

Good, I think that’s it in terms of time. Thank you very much for coming.