Ferguson Plc (LON:FERG) shares pushed higher as the firm reported a near 25% rise in full-year trading profit as a strong a US performance offset weak growth in the UK and unveiled plans for a share buy-back programme.
The FTSE 100-listed heating and plumbing products supplier – formerly known as Wolseley – said trading profit from ongoing business rose to £1.03bn in the year to July 31, up from £827mln a year earlier.
READ: Ferguson higher as Citigroup ups rating to ‘buy’ ahead of full year results
The group said its revenue from ongoing business increased by 18.3% to £14.87bn, a 6% increase on a like-for-like basis, and the gross margin of the ongoing businesses was 28.9%, 0.4% ahead of last year.
John Martin, Ferguson’s group chief executive said: "US markets continue to be favourable, in particular residential and commercial markets where we generate the majority of our revenue.”
He added: “Our business is performing well, we have a strong balance sheet to support our plans and the Board continues to look to the medium-term with confidence."
READ: Wolseley weak as good performance in US residential, commercial markets offset by poor UK showing
The company proposed a final dividend of 73.33p making a total payout for the year of 110p, up 10% on the 100p paid in the previous year.
Ferguson also said it would buy back shares worth £500mln over the next 12 months.
In a note to clients, analysts at Liberum Capital said: "We see compelling value for what is effectively the dominant US leader, and would expect re-rating to resume as its own e-commerce strength becomes better understood."
Liberum reiterated a 'buy' rating and 5,300p price target on the stock.
In early morning trading, Ferguson shares were 3.7%, or 181p higher at 5.045p.
-- Adds broker comment, share price --