29th Sep 2020 09:02
(Alliance News) - Ferguson PLC on Tuesday said it will resume dividend payments despite the plumbing and heating products supplier's annual earnings being held back by the coronavirus outbreak.
The company separately said that Bill Brundage, currently chief financial officer of unit Ferguson Enterprises, will succeed Mike Powell as group CFO and executive director on November 1. Powell will step down at the end of October.
Shares in the company were up 5.7% at 7,850.00 pence each in London, the best performer in the FTSE 100 index. Year-to-date the stock has gained around 15% in value.
Ferguson said it delivered a strong performance in financial 2020, which in light of the coronavirus outbreak, highlighted the "resilience of its business model".
"On an ongoing basis we delivered group revenue growth and grew trading profit ahead of revenue despite lockdowns in the second half," Chief Executive Officer Kevin Murphy explained.
For the financial year ended July 31, revenue slipped 0.9% to USD21.82 billion from USD22.01 billion in financial 2019. The revenue figure, however, was higher than the company-compiled consensus forecast of USD21.76 billion.
Ongoing revenue - the company's preferred revenue measure - was 2.0% ahead of last year at USD19.94 billion.
Pretax profit was down 4.8% to USD1.26 billion from USD1.32 billion, while trading profit, which excludes exceptional items and amortisation of acquired intangible assets, was USD1.67 billion, up 8.6% from USD1.54 billion. The trading profit figure beat the consensus forecast of USD1.59 billion.
Exceptional charges increased to USD120 million from USD94 million, principally comprising business restructuring in the face of Covid-19 pandemic.
On the company's future performance, CEO Murphy said: "It is impossible to predict the future progress of the virus, or its economic impact and we expect the current levels of uncertainty to continue for the foreseeable future. However, the fundamental aspects of our business model remain attractive and since the start of the new financial year Ferguson has generated low single digit revenue growth in the US in flat markets overall.
"While we remain cautious on the outlook for the year as a whole, the business is in good shape and well prepared to address any further market related disruption."
Ferguson proposed a final dividend for the year of 208.2 cents which it said "effectively reinstates" the previously withdrawn interim dividend, and was in line with last year's payout. However, its USD500 million share buyback program remains suspended.
The company also has decided to resume its mergers and acquisitions programme, funding selective bolt-on acquisitions to improve market positions or expand capabilities of existing businesses.
By Tapan Panchal; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Ferguson