26th Mar 2019 07:52
LONDON (Alliance News) - Ferguson PLC on Tuesday reported profit growth in the first half of its current financial year, but said it expects annual profit at the bottom line of market forecasts due to weakness in plumbing and heating markets.
The plumbing and heating products distributor reported revenue of USD10.85 billion for the six months to the end of January, up 8.2% from USD10.03 billion reported a year earlier, pushing pretax profit up by 14% to USD679 million from USD598 million.
The company noted that its revenue and profit include results of its Dutch plumbing and heating business which was sold during the period.
Geographically, in the US, the FTSE 100 company reported organic revenue growth of 9.7% with acquisitions generating 3.2% of additional revenue growth. In Canada, organic revenue was 2.1% higher on the prior year and acquisitions contributed 5.8% of additional revenue growth.
In the UK, the group reported like-for-like revenue growth of 0.3% as it said it has continued to execute the restructuring programme including the exit of the national distribution centre, relocation of the support services office and completion of the roll out of the new Wolseley trading brand for its plumbing and heating business. Ferguson also inured a USD31 million charge relating to the restructuring of its UK business.
Ferguson proposed an interim dividend of 63.1 US cents per share, up 10% from 57.4 cents paid a year prior.
Looking ahead, Ferguson said it still expects to generate further revenue growth in the second half of its current financial year. The company has also revised its estimates of organic revenue growth to between 3% and 5%.
Consequently, Ferguson said it expect trading profit for the full year to be towards the lower end of the range of analysts' expectations of USD1.59 billion.
For the year to the end of July 2018, the company reported trading profit of USD1.50 billion.
"After a strong revenue performance in the first half our growth rate has moderated recently in line with conditions in our markets," said Chief Executive John Martin.
"We will continue to execute our strategy of delivering excellent customer service to maximise profitable growth opportunities whilst remaining vigilant on costs," added Martin.
Ferguson will announce its annual results on October 1.
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