Shareholders of Ferguson PLC (LON: FERG) have seen their shares in red on Tuesday morning, despite a positive update from the firm.
Ferguson plc is a Jersey registered multinational plumbing and heating products distributor with its head office in Winnersh Triangle, United Kingdom. Ferguson has approximately 35,000 employees across three regions. Its brands include Ferguson Enterprises, Wolseley and William Wilson.
Ferguson told shareholders that revenue was up in the first quarter, as it impressed shareholders about expanding market share in the US.
The plumbing and heating products distributor recorded $5.21 billion of revenue in the three months to October 31, up 5.3% on the $4.95 billion seen the year before.
The FTSE100 listed firm saw its group trading profit rise 9.2% to $451 million in the first quarter, with underlying trading profit which excludes a $18 million accounting boost – rising 4.8% to $433 million from $413 million.
“Ferguson continued to take market share against a backdrop of flat US markets, and we remain firmly focused on maximizing organic revenue growth, while tightly managing gross margins and costs,” said Chief Executive Kevin Murphy.
“We are pleased that this disciplined approach enabled us to grow US trading profit in line with revenue growth in the quarter. Cash generation in the quarter was good and our balance sheet remains strong. We will continue to invest organically in our businesses and in selective bolt-on acquisitions which will be integrated into our network.”
Forecasting further, Murphy said: “We expect to make further good progress in the year ahead. While US market growth is currently broadly flat, we remain confident of outperforming our end markets and our order books support continued modest revenue growth in the months ahead. This strong focus on growth with continued cost and margin discipline gives us confidence in our expectations for the full year which remain unchanged.”
In the United States, revenue rose year on year by 6.1% to $4.89 billion, while revenue in Canada fell 5.8% to $315 million.
Ferguson’s UK revenue dropped 2.2% to $541 million, with trading profit down 17% to $15 million. The company said its UK demerger is progressing as planned, and is expected to be completed in 2020.
The company blamed the disappointing quarter in the UK on a backdrop of “uncertainty” in repair, maintenance and improvement markets, where the majority of Ferguson’s UK revenue is generated.
Shares in Ferguson fell 2.79% despite the update, which reflected the appetite from shareholders.
Shares now trade at 6,480p. 3/12/19 10:41BST.