Ferguson profit boosted by home improvement demand
08:51, 28 September 2021
Ferguson, the US plumbing supplies company, announced higher annual profit on Tuesday as customers spent more on home improvement projects during the Covid-19 pandemic.
The London-listed company said good cost control helped it to deliver strong underlying trading profit as it climbed 31.1% to $2.18bn for the full year ended 31 July.
Ferguson also reported a 14.3% rise in revenue to $22.8bn.
Share buyback
In a statement, Ferguson said $1.4bn had been returned to shareholders during the year via dividends and share buy-backs –- and also reported a new $1bn stock buy-back.
The FTSE 100 firm declared a final dividend of 166.5c per share, resulting in a 15% jump for the year’s total dividend.
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Company outlook
Although the pandemic drove strong interest for home renovation across many western markets as people stayed indoors, Ferguson said it expected demand to taper later this year.
“The group started the new financial year with strong momentum, with organic revenue growth at similar levels to the fourth-quarter 2020/21. We expect a year of good growth overall but we anticipate a tapering in the second half on tougher prior year comparatives,” chief executive Kevin Murphy said.
He also said the business was mindful that the recent tailwinds from inflation on gross margins could moderate – but for the full year ahead, the company expected operational improvements to broadly offset headwinds from inflation in the cost base.
“Given the strong momentum in the business and the agility of our business model, we are well positioned to have a year of good growth and the board continues to look forward to the medium term with confidence,” he added.
Shares in Ferguson were down 0.43% by mid-morning on Tuesday on the London Stock Exchange.
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