Ferguson flags challenging UK market as Europe and America flourish
The group, formerly known as Wolseley, reported a 10% rise in revenue to 5.2 billion US dollars (£3.8 billion), while trading profit was up 14% to 394 million US dollars (£293 million).
Plumbing supplier Ferguson said that a challenging UK market dragged on its performance in the first quarter, but the firm’s European and North American operations helped bump up profits.
The group, formerly known as Wolseley, reported a 10% rise in revenue to 5.2 billion US dollars (£3.8 billion) in the three months to October 31, while trading profit was up 14% to 394 million US dollars (£293 million).
But in the UK, despite revenue growing 3.4% to 679 million US dollars (£506 million), profit came in 3.8% lower at 21 million US dollars (£15.6 million).
This contrasted to the US, Canada and Central Europe, where profit rose.
Ferguson said that the sales growth in the UK was largely down to price inflation, which has rocketed since the value of the pound collapsed following the vote to quit the EU.
“Gross margins were lower in competitive markets as customers resisted supplier price rises.
“Repair, maintenance and improvement markets remained weak,” the firm said.
Chief executive John Martin added: “Our business continued to grow well in our first quarter with strong organic growth in the US.
“Growth in Canada was also strong, though market conditions remain challenging in the UK where we are continuing to implement our transformation programme.”
Earlier this year, Ferguson struck an agreement to offload its Nordic building materials business to US private equity firm Lone Star Funds for one billion euros (£885 million).
The group’s name change from Wolseley in July was part of efforts to focus more on the US, where it makes the bulk of its revenue and trades as Ferguson.