3rd Dec 2019 08:25
(Alliance News) - Ferguson PLC said Tuesday revenue was up in the first quarter, as the FTSE 100 firm boasted about its increasing market share in the US.
The plumbing and heating products distributor recorded USD5.21 billion of revenue in the three months to October 31, up 5.3% on the USD4.95 billion seen the year before.
Ferguson's group trading profit was up 9.2% year on year to USD451 million in the first quarter, with its underlying trading profit - which excludes a USD18 million accounting boost - rose 4.8% to USD433 million from USD413 million.
"Ferguson continued to take market share against a backdrop of flat US markets, and we remain firmly focused on maximizing organic revenue growth, while tightly managing gross margins and costs," said Chief Executive Kevin Murphy.
"We are pleased that this disciplined approach enabled us to grow US trading profit in line with revenue growth in the quarter. Cash generation in the quarter was good and our balance sheet remains strong. We will continue to invest organically in our businesses and in selective bolt-on acquisitions which will be integrated into our network."
In the US, revenue was up 6.1% year on year to USD4.89 billion, while Canadian revenue slipped 5.8% to USD315 million. Ferguson noted its Blended Branches, Waterworks and HVAC units all grew in the first quarter.
US trading profit grew 6.3% to USD442 million. However, Ferguson's Canadian businesses posted a 26% year on year fall in trading profit to USD20 million.
Ferguson's UK revenue dropped 2.2% to USD541 million, with trading profit down 17% to USD15 million. The company said its UK demerger is progressing as planned, and is expected to be completed in 2020.
The company blamed the disappointing quarter in the UK on a backdrop of "uncertainty" in repair, maintenance and improvement markets, where the majority of Ferguson's UK revenue is generated.
At the end of October, Ferguson's net debt, excluding leases, stood at USD1.38 billion.
Looking ahead, Murphy said: "We expect to make further good progress in the year ahead. While US market growth is currently broadly flat, we remain confident of outperforming our end markets and our order books support continued modest revenue growth in the months ahead. This strong focus on growth with continued cost and margin discipline gives us confidence in our expectations for the full year which remain unchanged."
Shares in Ferguson were down 0.5% in London on Tuesday morning at 6,626.00 pence each.
By Paul McGowan; [email protected]
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