Fer­gu­son plays down talk of UK exit amid US sales boom

The Daily Telegraph - Business - - Business - By Jack Torrance

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.

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