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Notes to the consolidated financial statements
Year ended 31 July 2007
26. Provisions
| Environmental and legal £m |
Wolseley Insurance £m |
Restructuring £m |
Other provisions £m |
Total £m |
|
|---|---|---|---|---|---|
| At 1 August 2005 | 33 | 35 | – | 17 | 85 |
| Utilised in the year | – | (9) | (1) | (2) | (12) |
| Charge for the year | 6 | 23 | 2 | 4 | 35 |
| Transfers | 1 | – | 1 | (5) | (3) |
| New businesses | 1 | – | – | 4 | 5 |
| Exchange differences | (2) | (2) | – | – | (4) |
| At 31 July 2006 | 39 | 47 | 2 | 18 | 106 |
| Utilised in the year | (4) | (16) | (5) | (3) | (28) |
| Charge for the year | 9 | 20 | 18 | – | 47 |
| New businesses | 2 | – | – | 8 | 10 |
| Exchange differences | (4) | (3) | – | 2 | (5) |
| At 31 July 2007 | 42 | 48 | 15 | 25 | 130 |
Provisions have been analysed between current and non-current as follows:
| At 31 July 2007 | Environmental and legal £m |
Wolseley Insurance £m |
Restructuring £m |
Other provisions £m |
Total £m |
|---|---|---|---|---|---|
| Current | 4 | 15 | 10 | 2 | 31 |
| Non-current | 38 | 33 | 5 | 23 | 99 |
| Total provisions | 42 | 48 | 15 | 25 | 130 |
| At 31 July 2006 | Environmental and legal £m |
Wolseley Insurance £m |
Restructuring £m |
Other provisions £m |
Total £m |
|---|---|---|---|---|---|
| Current | 8 | 13 | 2 | 6 | 29 |
| Non-current | 31 | 34 | – | 12 | 77 |
| Total provisions | 39 | 47 | 2 | 18 | 106 |
Wolseley Insurance provisions represent an estimate, based on historical experience, of the ultimate cost of settling outstanding claims and claims incurred but not reported on certain risks retained by the Group (principally US casualty and global property damage).
Environmental and legal liabilities include known and potential legal claims and environmental liabilities arising from past events where it is probable that a payment will be made and the amount of such payment can be reasonably estimated. Included in this provision is an amount of £35 million (2006: £31 million) related to asbestos litigation involving certain Group companies. This liability is fully covered by insurance and accordingly an equivalent insurance receivable has been recorded in ‘Other receivables’ (note 17). The liability has been actuarially determined as at 31 July 2007 based on advice from independent professional advisors. The provision and the related receivable have been stated on a discounted basis using a long-term discount rate of 5.0 per cent (2006: 5.2 per cent). The level of insurance cover available significantly exceeds the expected level of future claims and no profit or cash flow impact is therefore expected to arise in the foreseeable future.
Restructuring provisions mainly relate to branch closure programmes at Stock Building Supply, the US building materials business, and at Wolseley UK. The majority of these obligations fall due within one year.
Other provisions relate to rental commitments on vacant properties, dilapidations on leased properties and warranties. The weighted average maturity of these obligations is approximately five years.