viewFerguson PLC

Ferguson beats flat US markets as outlook remains "modest"

The engineer is planning to demerge its lower-margin UK business, Wolseley UK, in 2020

Ferguson PLC - plumber

Ferguson PLC (LON:FERG) said that it has continued to outstrip rivals in a flat US construction market, as it progresses with the planned spin-out its UK business in 2020.

Organic revenues of $5.2bn in the three months to the end of October were up 5.4% year-on-year, of which organic growth was 2.5%, according to a trading update from the FTSE 100 plumbers’ merchant on Tuesday.

READ: Ferguson plans separate listing for former UK parent Wolseley

Sales in its largest market, the US, “continued to outperform” with revenue growth of 6.2% to US$4.9bn, comprising 3.1% organic growth and 3.1% from acquisitions.

With US trading profit growing in line with revenue, group trading profits ticked up 9% to US$451mln, thanks to tightly controlling costs.

“While US market growth is currently broadly flat we remain confident of outperforming our end markets and our order books support continued modest revenue growth in the months ahead,” said Kevin Murphy, the former US boss recently promoted to group chief executive.

Back in September, Ferguson confirmed plans to spin out its lower-margin UK business, Wolseley UK, where organic revenues continued to decline at 4.2% in the past three months, against what the group said was “a backdrop of uncertainty in repair, maintenance and improvement markets”.

It said the demerger remains “on track” to be completed in 2020, but did not mention any further discussion of its proposed plans to move its stock market listing to the US.

In the last three months, Ferguson invested $62mln in acquisitions, with another heating, ventilation, and air conditioning addition post period end.

Quick facts: Ferguson PLC

Price: 7106 GBX

Market: LSE
Market Cap: £15.98 billion

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