December 4, 2018 / 7:23 AM / 6 days ago

Ferguson first quarter profit jumps as dominant U.S. business provides boost

(Reuters) - UK-based Ferguson Plc’s (FERG.L) first-quarter profit rose 9.9 percent, led by stronger demand in the United States and as the world’s largest heating and plumbing equipment supplier kept a tight lid on expenses.

Ferguson is betting on its dominant U.S. operations to drive revenue and also wants to build out its Canadian business, as its British unit undergoes a restructuring amid slowing demand for house repairs.

Previously known as Wolseley, the company changed its name to Ferguson, its U.S. brand, to reflect the size and importance of its operations in the country.

Organic revenue at Ferguson’s U.S. business, which contributes some 90 percent of ongoing trading profit, climbed 9.6 percent in the three months ended Oct. 31.

The FTSE-100 group, which sources, distributes and sells specialist plumbing and heating products, said it expects trading profit for the full year to match analysts’ expectations, led by optimistic expectations for its U.S. business.

The company also said its plans to sell its Dutch plumbing and heating business were proceeding on track.

Ferguson’s ongoing trading profit rose to $432 million (339 million pounds) in the three months ended Oct. 31, from $393 million a year earlier. Revenue jumped 8.5 percent to $5.6 billion.

Gross margin rose 50 basis points to 29.6 percent as a result of recent acquisitions and the close of a low-margin wholesale business in the UK.

Reporting by Tanishaa Nadkar and Arathy S Nair in Bengaluru; Editing by Sai Sachin Ravikumar

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