Ferguson boosts profit ahead of planned demerger
Plumbing parts distributor Ferguson today announced a better-than-expected seven per cent rise in full-year profit as it benefited from cost cutting measures.
The company said trading profit rose to $1.6bn (£1.3bn) in the year to 31 July, up from $1.49bn the previous year.
Revenue grew six per cent to $22.01bn.
Read more: Ferguson to split UK and US operations as chief executive heads for the exit
Analysts had predicted a consensus of trading profit of $1.57bn and revenue of $21.87bn.
Last month Ferguson announced plans to spin off its UK business under the Wolseley brand and focus its core business on the North American market.
The company also said chief executive John Martin is stepping down on 19 November, to be replaced by Ferguson’s US chief executive Kevin Murphy.
Read more: Ferguson dips on concerns over US market
Today the company said the planned demerger was “progressing well”.
Ferguson said it was considering the “most appropriate listing structure” for the unit. Analysts expect the company’s North American business to be listed in the US, with Wolseley UK remaining in Britain.
Richard Hunter, head of markets at Interactive Investor, said: “Given the level of challenges, some of which are of its own making, Ferguson is generally making solid progress.”
And said: “The demerger makes sound strategic sense in recognising the US business as a separate entity, as well as creating some additional value for shareholders. This in turn has garnered wide support for the company’s objectives, with the market consensus of the shares as a buy reflecting general optimism.”