1st Oct 2019 08:29
(Alliance News) - Ferguson PLC said Tuesday that profit and revenue for its recently ended financial year rose above market expectations, as work on the US-focused group's demerger of its UK operations was said to be "progressing well".
Shares in the plumbing and heating products company were up 3.7% at 6,161.96 pence on Tuesday, the best performer in the FTSE 100.
For the year to the end of July, Ferguson reported pretax profit of USD1.32 billion, up 11% from USD1.19 billion the year before.
Trading profit, which excludes exceptional items and the amortisation of acquired intangible assets, increased by 7.5% year-on-year to USD1.60 billion from USD1.49 billion. This was on revenue that grew 6.1% to USD22.01 billion from USD20.75 billion.
Consensus expectations for Ferguson's 2019 financial year had trading profit at USD1.58 billion, on revenue of USD21.87 billion.
On a constant currency basis, revenue was up 7.9% year-on-year.
Regionally, Ferguson's US business continued to perform well, with trading profit rising by 7.3% to USD1.40 billion on revenue increasing by 10% to USD18.36 billion, making up 83% of group revenue.
Meanwhile, the UK division had a weaker period, with trading profit down by 4.2% to USD72 million, and revenue declining by 10% to USD2.22 billion, as plumbing and heating markets remained flat.
In Canada, trading profit dropped by 4.2% to USD67 million and revenue by 0.1% to USD1.19 billion amid weaker residential markets, due to government measures to restrict mortgage credit and the impact of foreign buyer taxes.
Ferguson declared a final dividend of 145.1 US cents per share, bringing its total payout to 208.2 cents, up 10% from 189.3 cents the prior year.
Looking ahead, Ferguson said that although US market growth is currently flat, Ferguson expects a continued outperformance, with its order books supporting continued modest growth in the next few months.
"Ferguson performed strongly in 2019 with organic growth in the US of 6.2% and substantial investments in acquisitions to further consolidate our market leading positions. Markets weakened in the second half but our well-executed approach to expanding gross margins and decisive cost control measures ensured strong profit delivery," said Chief Executive John Martin.
"We recently proposed the demerger of our UK operations and work on this is progressing well. We have also announced that as part of our orderly succession plans Kevin Murphy will succeed me as group chief executive in November. We are assessing the most appropriate listing structure for the group going forward and we will continue to consult with shareholders," Martin added.
By Dayo Laniyan; [email protected]
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