LONDON (Reuters) - Shares in plumbing and heating materials distributor Wolseley (WOS.L: Quote, Profile, Research) climbed over 9 percent after it kicked off a review of its U.S. Stock Building Supply arm and pledged to stay within its banking covenants.

Reporting full-year adjusted pretax profits down 30.5 percent to 527 million pounds, Wolseley said it had no plans to raise equity or renegotiate its banking covenants.

"We will continue to take the action necessary to create the headroom we need," Chief Executive Chip Hornsby told reporters on Monday.

While he was unable to rule out a rights issue in order to shore up the group's balance sheet, he added Wolseley's management team was taking all the actions it possibly could "to be in a situation where that's not an issue we need to address".

Wolseley shares rose over 9 percent to 451 pence at 10:55 a.m. after analysts welcomed the group's decision to undertake a "fundamental review" of its underperforming U.S. Stock Building Supply arm, in order to minimise the impact of any future losses from the division.

Deutsche Bank called the review a "significant development" and a potential driver for the group share price but warned that underlying market weakness made it wary of being too aggressive.

Despite continued concerns over its banking covenants, Wolseley shares have gained some 76 percent since falling to an eight-year low in July on the back of speculation the group would look to sell Stock Building Supply, with rival building materials group HD Supply touted as the most likely bidder.

Wolseley said net debt as of end-August remained virtually unchanged at 2.5 billion pounds, with the group operating at 2.7x net debt to EBITDA, well within its banking covenant limit of 3.5x.

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