Ferguson’s (LON:FERG) share price has surged in London this morning as the company unveiled plans to demerge its UK operations as it looks to focus on its operations on the other side of the Atlantic. The company further announced that its chief executive will step down later this year.
As of 10:38 BST, Ferguson’s share price had added 2.41 percent to 6,288.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.11 percent lower at 7,274.02 points. The group’s shares have been little changed over the past year, as compared with about a two-percent fall in the Footsie.
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UK unit demerger
Ferguson announced in a statement this morning that it intends to demerge its UK operations subject to shareholder approval. The decision marks the conclusion of a review of the group’s assets over the past few years. On completion of the transaction, Wolseley UK will become an independent listed company focusing exclusively on customers in the UK market, while Ferguson will be wholly focused on serving customers in North America.
“The demerger will enable both Wolseley UK and Ferguson to focus on accelerating the execution of their independent plans, providing clear investment propositions for each business,” Ferguson’s CEO John Martin commented in the statement.
The FTSE 100 group further noted that it is considering the most appropriate listing structure going forward.
CEO succession plans
The company also announced that its CEO John Martin will step down in November, to be succeeded by Kevin Murphy, CEO of Ferguson’s US operations.
Today’s updates come after the company recently reported slower sales growth in the third quarter of its financial year, while also announcing plans to return $500 million to investors.
According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating, while the average target on the Ferguson share price stands at 5,875.27p.