Ferguson annual profit rises after lockdowns fuel US appetite for home improvement
Plumbing group Ferguson has posted higher annual profits, buoyed by strong home improvement demand in the US, but expects the lockdown trend to taper in the upcoming financial year.
The FTSE 100 firm, which has a second US listing, said underlying trading profit climbed 32 per cent to $2.1bn in the full year ended 31 July 2021.
Revenue rose 14.3 per cent to $22.79bn, to which the US – its biggest market – contributed more than 94 per cent.
Ferguson declared a final dividend of 166.5 cents per share, bringing its total dividend to 239.4 cents per share – an increase of 15 per cent.
As well as raising its dividend, the company said it had returned $1.4 billion to shareholders during the year via dividends and share buybacks.
It comes after the company sold the last of its UK operations – its Wolseley business – in January, after which it paid out a special dividend of £299m and has completed $40mm share buybacks.
Today, Ferguson also announced a new $1bn share buyback which it plans to complete over the next year, ahead of its planned vote on moving its primary listing from London to Wall Street – a move that would follow a third of the company’s shareholders who are based in the US, slightly more than its 29 per cent of UK shareholders.
Kevin Murphy, CEO of Ferguson, backed the group’s strong balance sheet and forecast a year of good growth overall, but said the company expects sales to taper in the second half and be weaker in comparison to the first six months of 2021.
“We are mindful that the recent tailwinds from inflation on gross margins could moderate but for the full year ahead we expect operational improvements to broadly offset headwinds from inflation in the cost base,” Murphy said.