£21 million spent on
more than 142,000
days of employee
training

The workplace

One of the Board's objectives is to ensure that we provide a workplace environment that encourages and supports our employees in achieving their best personal performance. Further work was undertaken during the year in this area coordinated by the Groupwide human resource function that resides in Theale. The development of leadership skills of senior managers is also a key objective and further progress has been made to enable more participants than ever before to attend programmes at Darden and IMD. Training and development programmes for all employees are crucial to the ability of the business to achieve its goals. Significant attention and resources continue to be devoted to this issue. Just under £21 million (2005: £12 million) was spent on training of employees during the year, with over 142,000 (2005: 75,250) days of training provided. Whilst Wolseley is committed to promoting equal opportunities for all, it is believed that, overall, women and minorities continue to be underrepresented. We believe that we have the right policies in place to meet or exceed legal requirements in this area although we continue to explore the factors that are critical to achieving greater diversity. Further work continues to be undertaken in this area.

Wolseley UK and Stock Building Supply both undertook company-wide employee surveys during the year allowing employees to suggest areas for improvement and voice concerns. Wolseley UK's 2005 survey highlighted the need for better internal communications; in response, the company introduced a monthly online chat session which generated over 700 questions in the first two sessions. Each session is hosted by a senior manager from Wolseley UK and the level of interest to date has proved very encouraging. Themes and topics that do not receive sufficient coverage during the online sessions gain a response in the weeks following the live event and all questions and answers are posted on the company's intranet to allow employees who were not able to join the live event an opportunity to participate. Stock Building Supply's survey compared results to its previous survey in 2002 and to the US national norm; the results showed that of the 13 areas covered by the survey, including such matters as working conditions, supervisor's skills, communication and benefits, nine were statistically above the US national norm and four were at that level. Overall, Stock Building Supply's employees expressed far greater satisfaction with their jobs compared with the US national norm and demonstrated a significant amount of goodwill towards the company.

Community relations

Notwithstanding the international nature of the business, the Group continues to operate with a high degree of autonomy, working in and with our local communities. We recognise our responsibility to invest in the communities in which our businesses operate and to act as a good corporate citizen. We are members of Business in the Community in the UK and continue to work with that organisation to help develop our approach and practice. The Group's businesses are involved in a wide range of initiatives for the benefit of local communities, of which the following are representative:

The Group's businesses, customers, suppliers and employees were directly affected by the devastation in the southern states of the US caused by Hurricane Katrina in August 2005. Just a few weeks before the hurricane began the Group had announced the creation of Wolseley North America to leverage the combined resources of all of its North American businesses. The groundwork was thus in place to enable Ferguson and Stock to make a strong joint response to those affected in the Gulf Coast region by formulating plans to develop pre-existing relationships with local businesses and customers in order to offer joint premises staffed by local people to assist some of the hardest hit areas in re-establishing water and sewer systems and supplying pipe used to pump flood waters out of the area. Assistance was also given to the US Federal Emergency Management Agency to provide emergency housing. Among the numerous local efforts to help the victims of the hurricane and in addition to the Groupwide and local company cash donations noted below. Ferguson delivered emergency response products, including generators, batteries, torches and pumping equipment to the affected area. Stock Building Supply worked in partnership with a school in Raleigh, North Carolina to deliver donations of school supplies and books to a school in Gulfport, Mississippi where several of the classrooms and more than 10,000 library books had been destroyed. Teams of Stock Building Supply management trainees also travelled to areas where the families of colleagues had been affected by the hurricane to help with the relief effort. As well as school supplies donated by employees, supplies of tools were donated by many Stock Building Supply branches.

A Relay for Life team from Ferguson's corporate offices in Newport News, Virginia, participated in this year's event for the ninth consecutive year, raising $16,500 for cancer charities. In May 2006, Ferguson employees participated in a food drive in aid of the Virginia Peninsula Food Bank. The goal was to collect 1,000lbs of non-perishable foods ranging from individual meals and soups to baby food and rice. Within just 12 days, 10,350lbs of food had been collected, surpassing the goal by over ten times. Employees from Ferguson's Waterworks division in San Marco raised over $3,000 for the city's Rescue Mission, taking part in a fancy dress bed race around the city's Fletcher Park. In November 2005, employees from Ferguson's Fort Myers branch raised nearly $4,000 in a Turkey Drive allowing the Salvation Army to purchase over 400 Christmas turkeys for families in the local area.

In April 2006, numerous initiatives by employees at Stock Building Supply's corporate headquarters in Raleigh, North Carolina, raised over $5,000 for the US National Multiple Sclerosis Society. Stock Building Supply supported a project with the US television show Extreme Makeover: Home Edition to build a new home for the members of a family in Cincinnati who had experienced severe personal difficulties. Stock Building Supply, together with local contractors, donated time and materials to build a new home for the family in just five days. An initiative in Fort Worth, Texas, saw Stock Building Supply and Ferguson join forces to help a local contractor rebuild the home of a local family who were struggling to cope with the ongoing medical problems of their seven-year-old son and whose home had fallen into a state of disrepair. Between them, Stock Building Supply and Ferguson donated timber, windows, doors, plumbing fixtures, fittings and appliances for the project.

Wolseley UK supported the renovation of an old jetty at a special needs centre near Birmingham by donating materials from a local branch. The new jetty has been designed for children who are blind, partially sighted or wheelchair users so that they can get closer to the local wildlife. Many of Wolseley UK's employees took part in the 2006 Race for Life including three employees from the company's Ripon office who raised over £3,000 for Cancer Research UK. Wolseley UK and the Variety Club Golf Society raised £15,000 towards the 15th Variety Club coach which has been sponsored by the company. The 16 seat coach will be used to take pupils from a local school, 60% of whom are involved in the Special Olympics, to sporting events around the UK and overseas.

Habitat for Humanity supported
by all three North American
businesses

Habitat for Humanity

All three of the Group's North American businesses once again supported the efforts of Habitat for Humanity, the non-profit organisation that seeks to eliminate substandard housing and homelessness from the world. Ferguson and Stock Building Supply participated in the organisation's Home Builders Blitz with donations of materials and over 100 employees in 32 states working to help build 700 Habitat homes in a week. Wolseley Canada, through its membership of the Canadian Institute of Plumbing and Heating ("CIPH"), has helped to raise over C$1,000,000 for Habitat for Humanity Canada ("HFHC") in 2006. CIPH has raised over C$3,500,000 for HFHC since 1994, helping over 500 Canadian families across the country move into their own homes.

Donations

In response to the devastation of Hurricane Katrina, Wolseley plc together with its three operating companies in North America (Ferguson, Stock Building Supply and Wolseley Canada), committed $200,000 to the relief effort. In many cases, the Group's companies also match dollar-for-dollar employee donations to charitable causes, such as the $68,000 in hurricane relief donations made by its employees which were matched by Stock Building Supply. Ferguson made a $10,000 donation to Cancer Services of Greater Baton Rouge to help improve the quality of life for cancer sufferers in the hurricane affected region. In addition to these initiatives, the Group supports charities relevant to the countries and to the locations in which its businesses operate. These are wide-ranging and cover health, welfare, education, civic and community projects as well as culture and the arts. Each year, several hundred donations are made. In the USA, many of our employees make regular contributions to the United Way, an organisation which distributes funds to charities. In the UK, a Give As You Earn Scheme operates with the assistance of the Charities Aid Foundation which distributes funds to UK charities. Further details of the donations made during the year are set out in the Corporate governance report.