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Ferguson profits underpinned by acquisitions, cost-cutting
1st Oct 2019 07:10
(Sharecast News) - Ferguson on Tuesday reported a jump in annual profits as it benefited from acquisitions and cost-cutting.
The plumbing and heating products specialist booked a profit before tax of $1.4bn for the year ended 31 July, up 7% compared to the year before, as revenue climbed 6% to $22.0bn.
Ferguson, formerly known as Wolseley, hiked its full year dividend by 10% to 208.2 cents per share.
The increase in turnover was driven by its performance in the US, where revenue climbed 10% to $18.4bn despite flat market growth after Ferguson acquired 14 new businesses in the country.
In the UK, where revenue fell 10% to $2.2bn, the company is preparing for a recently proposed demerger of its British operations and said work on this had progressed well.
Improved ongoing gross margins of 29.4%, compared with 29.3% the year before, were a result of disciplined pricing controls combined with the favourable impact of acquisitions, Ferguson said.
Chief executive John Martin said he expected the company to continue to outperform despite continued flat US market growth, as its order books support modest growth in the months ahead.
"We remain focused on maximising our organic revenue growth rate, gross margin expansion, tight cost control and strong cash generation," said Martin.
Ferguson shares were up 4.1% at 6,186.00p at 0945 BST.
The plumbing and heating products specialist booked a profit before tax of $1.4bn for the year ended 31 July, up 7% compared to the year before, as revenue climbed 6% to $22.0bn.
Ferguson, formerly known as Wolseley, hiked its full year dividend by 10% to 208.2 cents per share.
The increase in turnover was driven by its performance in the US, where revenue climbed 10% to $18.4bn despite flat market growth after Ferguson acquired 14 new businesses in the country.
In the UK, where revenue fell 10% to $2.2bn, the company is preparing for a recently proposed demerger of its British operations and said work on this had progressed well.
Improved ongoing gross margins of 29.4%, compared with 29.3% the year before, were a result of disciplined pricing controls combined with the favourable impact of acquisitions, Ferguson said.
Chief executive John Martin said he expected the company to continue to outperform despite continued flat US market growth, as its order books support modest growth in the months ahead.
"We remain focused on maximising our organic revenue growth rate, gross margin expansion, tight cost control and strong cash generation," said Martin.
Ferguson shares were up 4.1% at 6,186.00p at 0945 BST.