19th May 2021 08:28
(Alliance News) - Ferguson PLC on Wednesday lifted its full-year outlook after reporting double-digit revenue growth in the third quarter amid strong growth in its key US market.
The Wokingham, England-based plumbing and heating products distributor said revenue for the three months to the end of March totalled USD5.92 billion, up 25% from USD4.75 billion a year ago, and underlying trading profit was USD560 million, up 69% from USD333 million, thanks to good cost control.
Ferguson said US market demand accelerated through the quarter as the US economy continued to re-open. The US business grew revenue 23%, thanks to acquisitions and an additional trading day.
Gross margins of 30.9% were 110 basis points ahead of last year, driven by channel mix improvement.
Also, the FTSE 100-listed company said it has completed USD140 million of USD400 million share buy back program in the period.
Given the better than expected results, Ferguson revised its outlook for financial 2021 upwards as it said it expects to continue to outperform strong end-markets in the fourth quarter.
Ferguson expects to generate group trading profit in the range of USD2.00 billion to USD2.10 billion in the year that ends July 31. In financial 2020, trading profit, which excludes exceptional items and amortisation of acquired intangible assets, was USD1.67 billion, up 8.6% from financial 2019.
"Ferguson has brought forward its third quarter announcement as we delivered strong revenue and profit growth ahead of expectations. Our associates continued to provide outstanding service and support to our customers in the face of increasing supply chain pressures leading to product availability concerns. We were pleased with the strong earnings growth and margin expansion arising from continued operating efficiencies and pass through of acute price inflation as the US economy re-opens," Chief Executive Officer Kevin Murphy said.
Ferguson shares were trading 4.1% higher in London on Wednesday morning at 9,654.00 pence each, the best performer in the FTSE 100.
By Evelina Grecenko; [email protected]
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