Ferguson still springing a UK leak as customers shun price hikes
Weak UK markets are still a thorn in the side of the heating and plumbing supplies giant formerly known as Wolseley, figures showed on Tuesday.
The FTSE 100 blue-chip changed its name to Ferguson this year, ending a century of history associated with the Wolseley name, to reflect the fact 80% of the group’s revenues come from the US.
Across the pond, a buoyant US economy helped push sales ahead 8.3% in the quarter to October 31, while Canada was also strong. That helped the shares edge 20p higher to 5500p.
But in the UK the story is much weaker as Ferguson was reliant on cost inflation to gain any sales growth at all.
Revenues were up 3.2% “principally as a result of price inflation” but margins suffered as “customers resisted price rises”.
Repair and maintenance markets in the UK remain “weak” and trading profits of $21 million (£15.6 million) are nearly 4% below last year.
The firm is looking to cut costs more quickly.
Shore Capital’s Graeme Kyle said UK growth was “anaemic” with negative implications for builders’ merchants Travis Perkins and Grafton.
Travis Perkins fell 8p to 1541p while Grafton lost 8p to 749p.
