(Alliance News) - Plumbing and heating products distributor Ferguson PLC on Tuesday said it saw strong operational delivery in the first half of financial 2020, but stopped short of confirming its annual trading profit outlook due to the "dynamic situation unfolding with Covid-19".
Shares in Ferguson were down 13% at 4,524.00 pence in London on Monday morning.
Ferguson Chief Executive Kevin Murphy said: "Given the strength of our first half results, we had intended to confirm our full-year trading profit outlook for 2020. However, due to the dynamic situation unfolding with Covid-19 it is too early to understand its impact on current trading.
"Recent government actions to contain the spread of Covid-19 and societal reactions, alongside any potential actions we will take to mitigate them are not reflected in existing market forecasts and it is too early to quantify them. Ferguson remains well positioned for long-term success operating in attractive and fragmented markets with a robust business model and backed by a strong balance sheet and liquidity position."
For the half year ended January 31, the company's revenue rose 1.1% to USD10.97 from USD10.85 billion a year before. Pretax profit fell 5.7% to USD640 million from USD679 million on a USD19 million exceptional charge and USD22 million impairment charge relating to an associate.
Ongoing revenue rose 4.3% to USD9.89 billion from USD9.49 billion, while trading profit - operating profit before exceptional items and amortisation of acquired intangible assets - rose 9.5% to USD782 million from USD714 million.
The company attributed the performance to continued market share gains in the US. In the US, Ferguson posted first half revenue growth of 5.0% to USD9.32 billion and underlying trading profit growth of 5.7% to USD740 million.
The company makes a bulk of its revenue in the US and said the demerger process for its Wolseley UK business is on track and expects to complete the transaction within the current calendar year.
The company named current DS Smith PLC Chair Gareth Davis to chair Wolseley once the demerger process has completed. Davis also serves as deputy chair of M&C Saatchi PLC and as a non-executive director of Gresham House PLC.
Ferguson raised its interim dividend by 7% to 67.5 US cents from 63.1 cents.
By Tapan Panchal; tapanpanchal@alliancenews.com
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Smith (DS) (SMDS)
Ferguson (FERG)
M&C Saatchi (SAA)