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Wolseley brings forward dividend: Company moves to beat budget tax change

WOLSELEY, Britain's largest builders' merchant, is to pay its interim dividend four months early, because of the Budget changes to advance corporation tax.

The group has increased its dividend for the six months to January by 14.5 per cent to 3.55p a share, although part of the increase is to provide a better balance between the interim and final payments. Last year's 3.10p interim represented only a fifth of the total.

The interim dividend is normally paid on 30 July, but Wolseley has decided to advance the payment to 5 April, the day before the Budget changes come into effect. That means shareholders that do not pay tax - such as pension funds - can reclaim a 25 per cent tax credit on the dividend, rather than the new, lower rate of 20 per cent.

Wolseley will have to pay ACT at 25 per cent, rather than the 22.5 per cent rate introduced in the Budget, but the difference will be recouped when it pays its main corporation tax bill.

Profits for the period rose 41.2 per cent to pounds 47.6m, helped by a pounds 9.3m contribution from Brossette, the French plumbing supplies business acquired last February. Earnings per share rose 30.4 per cent to 12.86p.

Jeremy Lancaster, chairman, said that the French construction market has been falling, although Brosette's repair and maintenance business has been more resilient.

The shares closed 15p higher at 609p.