Ferguson plays down talk of UK exit amid US sales boom
FERGUSON has played down suggestions it could jettison its UK business after rival Travis Perkins set out plans to sell its plumbing and heating arm.
The FTSE 100 giant, formerly known as Wolseley, was founded more than a century ago in the UK and is listed in London but now does the vast majority of its business across the Atlantic. While its US arm has been booming in recent years thanks to the strong economy, its home division has been going through a drawn-out restructure aimed at bolstering margins amid stagnation in the market.
Analysts at Peel Hunt said Ferguson’s presence in the UK “looks increasingly circumspect” in light of Travis Perkins’ decision to sell up. But a spokesman said Ferguson, which sells pipes, fittings and boilers, remained “fully committed” to its UK business.
Asked if the company could put in a bid for the Travis Perkins unit, John Martin, CEO, declined to comment.
Separately, Mike Powell, Ferguson’s chief financial officer, told analysts: “Clearly we’ll look to understand Travis’s announcement in a little more detail going forward. But we’re pretty focused on our own business.”
Ferguson unveiled another set of strong results yesterday, as trading profits grew 10pc to $432m (£338m) in the three months to October and revenues rose 8.5pc to £5.5bn despite a contraction in the UK, where it has been shutting stores and exiting lowmargin wholesale business.
Mr Martin said Ferguson had seen “no weak spots” in the US.
However, UK sales tanked 9.5pc, excluding the impact of exchange rate fluctuations, to £607m, but were up 1.5pc on a like-for-like basis as it traded from fewer stores.
Shares in Ferguson closed down 4.3pc at £49.76 yesterday.