Wolseley’s name change in July to Ferguson Plc (LON:FERG) reflected the fact that the plumbing supplies group‘s US business accounts for the lion’s share of its revenues and profits.
The FTSE 100 listed firm’s recent disposal of Nordic building materials business Stark Group means that will be even truer when it issues a trading update on Tuesday.
Recent statistics suggest conditions in the US construction market remain favourable, particularly in the residential and commercial sectors that account for 85% of Ferguson’s sales, and Hargreaves Lansdown equity analyst George Salmon believes that should feed through to profits.
The €1bn Stark deal, together with a healthy underlying performance, should leave the group with net cash on the balance sheet at the end of the year, and although management have already said they’ll wait until the deal completes before updating the market on plans for any surplus, M&A and share buybacks both look to be on the table, Salmon said.
In a preview on Monday, analysts at JPMorgan Cazenove said they expect Ferguson’s first quarter group revenue growth to be similar to the year-to-date commentary with its full year results, at around 6% group organic growth.
IG looking to build on flying start despite placid markets
Tuesday’s pre-close trading update from IG Group Holdings PLC (LON:IGG) will reveal whether spread betting firm has continued to thrive despite relatively quiet financial markets.
The three months to the end of August – the first quarter of the group’s current financial year – was a record quarter for IG, with revenue up 21% year-on-year.
Investors will be keeping an eye out for a range of key performance indicators, including number of active clients and revenue per client.
In the first quarter the number of clients was up 9% year-on-year to 124,900 and the revenue per client was up 11%, so those are the run-rates the group will be looking to maintain or improve.
The group may comment on the regulatory threat that the sector is facing, particularly in Europe (including the UK).
In September, IG said: “Although none of the recently announced regulatory changes have adversely impacted the business to date, as previously noted, the nature and timing of potential regulatory changes in the UK and some other key markets for the group remain uncertain. It is therefore difficult to predict what impact, if any, regulatory change may have on the group this financial year and beyond.”
Significant events expected on Tuesday December 5:
Trading updates: Ferguson Plc (Q1) (LON:FERG), IG Group Holdings PLC (LON:IGG)
Interims: Collagen Solutions PLC (LON:COS), Consort Medical PLC (LON:CSRT), Gately Holdings PLC (LON:GTLY), Iomart Group PLC (LON:IOM), Northgate PLC (LON:NTG), Tatton Asset Management Plc (LON:TAM), Vianet Group PLC (LON:VNET), WYG PLC (LON:WYG)
Economic data: UK services PMI; US international trade; US non-manufacturing ISM