Wednesday 21 February 2018

Plumbing supplier Ferguson boosts London’s top flight

Ferguson, which has 1.1 million customers, saw annual pre-tax profits surge 75% to £1.2 billion, thanks to strong growth from its revamped US operation.

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Water use warning

By Ben Woods, Press Association Chief City Correspondent

Soaring shares from Ferguson gave the London market a leg up on Tuesday after the plumbing supplier unveiled a healthy boost to profits.

Ferguson, which has 1.1 million customers, saw annual pre-tax profits surge 75% to £1.2 billion, thanks to strong growth from its revamped US operation.

The FTSE 100 Index closed up 29.27 points at 7,468.11, with the group – formerly known as Wolseley – also hiking its dividend and rewarding investors with a £500 million share buyback.

Revenues were up 17% to £17.3 billion, with £2.1 billion coming in part from its move to pull out of the Nordic regions.

Group chief executive John Martin said the US arm had taken market share and secured “good growth”, leaving the group “well placed” to push ahead next year.

The group finished up as the biggest riser on the top flight, climbing more than 4% or 196p to 5,060p.

Across Europe, Germany’s Dax was up 0.6% and the Cac 40 in France pushed 0.3% higher.

On the currency markets, the pound slipped 0.2% against the US dollar at 1.325 and was 0.4% lower versus the euro at 1.126.

Sterling was already struggling when a dismal economic update from the UK construction industry compounded its misery.

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A generic photo of new homes being built, as figures reveal a slump in construction activity (PA)

Activity in Britain’s construction industry unexpectedly contracted for the first time in 13 months in September as a drop in new orders and civil engineering work dragged on the sector.

The Markit/CIPS UK Construction purchasing managers’ index (PMI) showed a reading of 48.1 last month, down from 51.1 in August, and falling well below economists’ expectations for a steady reading of 51.1.

A reading above 50 indicates growth.

In oil, Brent crude was marginally lower at 55.94 US dollars a barrel as investors embarked on a round of profit taking.

Focusing on UK stocks, Coca-Cola HBC was among the biggest fallers following the death of its chief executive Dimitris Lois, who passed away on Monday.

It comes just weeks after the chief executive took a temporary leave of absence to undergo medical treatment, but was expected to return after approximately four months.

Michalis Imellos will continue serving as acting CEO of the firm, which is one of the biggest bottlers of Coca-Cola beverages.

Shares in the firm were down 36p to 2,521p.

On the second tier, Greggs was enjoying a strong session after the sausage roll maker posted a significant lift in third-quarter sales.

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Greggs

Total sales grew by 8.6% and like-for-like sales rose 5% in the 13 weeks to September 30.

The group recorded particularly strong trade at breakfast time, along with an increase in its healthy eating ranges.

The group also saw margins hit by higher import costs and said it was remaining alert to the squeeze on consumer spending.

The firm said on Tuesday: “As we have previously indicated, food ingredient cost pressures are a headwind, although we continue to expect that the rate of increase will begin to ease towards the end of the year.”

Shares in Greggs were up 17p to 1,267p.

The biggest risers on the FTSE 100 Index were Ferguson up 196p to 5,060p, Ashtead Group up 59p to 1,851p, Sainsbury up 7.8p to 247.5p, International Consolidated Airlines Group up 15p to 622.5p.

The biggest fallers were Admiral down 50p to 1,784p, WPP down 29p to 1,364p, BAE Systems down 10.5p to 620p, Shire down 57p to 3,852p.

Press Association

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