Ferguson says its profit climbed by 12.2% in the fiscal first quarter

In a report on Tuesday, Ferguson plc (LON: FERG) said that its profit in the fiscal first quarter posted a 12.2% annualised growth on the back of easing COVID-19 restrictions that fuelled housing permits in the United States, resulting in higher demand for plumbing and heating parts in recent months. Residential operations sales make up 97% of Ferguson’s underlying trading profit.

Ferguson shares (guide to buy stocks online here) remained almost flat in premarket trading on Tuesday but jumped roughly 1.5% on market open. The stock is now trading at a per-share price of £85.94 as compared to a sharply lower £40.86 per share in March when the COVID-19 restrictions were at their peak.

Ferguson’s commercial business remained under pressure in Q1

Ferguson had reinstated dividend payments in the last week of September as it published its full-year financial results that topped expectations.

The Anglo-American multinational also said on Tuesday that its commercial business remained under pressure in the first quarter due to restricted municipal funding. Ferguson added that its industrial clients were faced with novel manufacturing-related challenges due to the COVID-19 crisis that has so far infected more than 67 million people worldwide and caused over 1.5 million deaths.

CEO Kevin Murphy commented on the financial update on Tuesday and said:

“Since the start of the second quarter, Ferguson has continued to generate low single-digit revenue growth in broadly flat markets, although we remain cautious on the outlook for the year as a whole, considering current pandemic trends.”

Ferguson reports a 3.1% growth in first-quarter revenue

Ferguson said that its underlying trading profit came in at £364.23 million in the quarter that concluded on 31^st October. In comparison, it had recorded a lower £324.51 million of profit in the same quarter last year.

In terms of revenue, the plumbing and heating products distributor registered £4.02 billion in the recent quarter that represents a 3.1% year over year growth. Ferguson expressed plans of expanding its footprint in North America. As part of the process, the FTSE 100 listed company is currently seeking to sell its UK plumbing unit Wolseley.

Ferguson performed largely upbeat in the stock market last year with an annual gain of close to 40%. At the time of writing, the Wokingham-based company is valued at £19.24 billion and has a price to earnings ratio of 27.36.