Ferguson returns to full-year dividends

Ferguson — US-based parent company of UK plumbers merchant chain Wolseley UK — saw revenue fall 0.9% for the year to 31 July to $21.8bn (£17bn). Despite this, the plumbing giant is to resume paying a year-end dividend to shareholders.

Profit before tax fell 4.8 per cent to $1.26bn (£980m) from $1.3bn (£1.01bn) in 2019.

The group said it remained “cautious on the outlook for the year” ahead, but assured investors it stands in good stead to weather future fallout from the pandemic.

Shares rose 5.4 per cent to 7,818p in early trading.

The group said there was a ‘significant business impact’ during the second half of the year which saw it reduce headcount by 2,100 over the year across the US, Canada and the UK, and make 94 branch closures. The plan is t will continue pursuing the demerger of Wolesley — its beleaguered UK arm — announced earlier this month. The group will offload Wolesley as a new company on the FTSE 250 with a fresh board line-up and estimated value of £600m.

However, Ferguson cautioned that the timing of the demerger remains uncertain amid ongoing market turbulence during the pandemic.

“The board is assessing other separation options in parallel with progress towards the demerger to facilitate the exit of the Wolseley UK business,” the company stated.

Kevin Murphy, group chief executive, said: “We have delivered a strong performance in 2020, which given the global pandemic has highlighted the resilience of our business model. Early in the crisis we moved decisively to protect the health and wellbeing of our associates while continuing to serve our customers supporting critical infrastructure.

“On an ongoing basis we delivered Group revenue growth and grew trading profit ahead of revenue despite lockdowns in the second half.

“It is impossible to predict the future progress of the virus, or its economic impact and we expect the current levels of uncertainty to continue for the foreseeable future. However, the fundamental aspects of our business model remain attractive and since the start of the new financial year Ferguson has generated low single digit revenue growth in the US in flat markets overall.

“While we remain cautious on the outlook for the year as a whole, the business is in good shape and well prepared to address any further market related disruption.”