Ferguson’s profit jumps 18% in fiscal H1 as COVID-19 fuels demand

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on Mar 16, 2021
  • Ferguson’s profit jumps 18% in fiscal H1 as COVID-19 fuels demand.
  • The British multinational reports £7.44 billion of six-month revenue.
  • Ferguson declares £1.3 per share of a special dividend on Tuesday.

Ferguson plc (LON: FERG) said on Tuesday that its financial performance was resilient in the six months that concluded in January 2021. The company attributed its hawkish performance in recent months to excellent cost control and higher demand amidst the ongoing Coronavirus pandemic.

Chief Executive Kevin Murphy commented on the financial update on Tuesday and said:

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“While the outlook for the second half remains very uncertain, we expect to generate above-market revenue growth in good residential markets aided by increasing inflation.”

Ferguson shares that you can learn to buy online here slid close to 3% in premarket trading on Tuesday but jumped a little under 5% on market open. Including the price action, the stock is now exchanging hands at £91.58 per share after recovering from a low of £40.86 per share in March 2020, when the COVID-19 crisis wreaked havoc on the global financial markets.

Ferguson reports £7.44 billion of revenue

Ferguson, however, expressed caution for the upcoming months. The British multinational said that its supply chain was likely to face increased pressure due to higher transport costs.

In the six months that concluded in January, Ferguson generated £7.44 billion of revenue that represents a 4.2% annualised growth. Its profit in the same period came in at £534.09 million – an 18% year over year increase.

Excluding leases, the plumbing and heating products distributor narrowed its net debt to £790 million during the half-year period versus the year-ago figure of £1.40 billion.

In separate news from the United Kingdom, specialist pension provider Just Group plc reported an 11% increase in its 2020 profit on Tuesday.

Ferguson declares a special dividend

According to Ferguson, it will pay £1.3 per share of a special dividend in May. The Wokingham-based firm also declared a higher 52.69 pence per share of interim dividend on Tuesday.

Ferguson also expressed plans of repurchasing another £289 million worth of shares in 2021. In an announcement in the first week of January, Ferguson said that it will offload Wolseley to a United States-based private equity firm for £308 million in cash.

Ferguson plc performed fairly upbeat in the stock market last year with an annual gain of more than 25%. At the time of writing, the British multinational plumbing and heating products distributor has a market cap of £20.43 billion and a price to earnings ratio of 30.07.

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