Ferguson shares tumble on coronavirus impact warning
Shares in plumbing group Ferguson slumped over 13 per cent in morning trading after it warned it could not confirm its full-year outlook due to the coronavirus pandemic.
The company also reported a 5.7 per cent drop in pre-tax profit for the six months ending 31 January, which fell to $640m (£522m).
Revenue rose 1.1 per cent during the first half to $11bn, while basic earnings per share fell to 206.7 cents.
Chief executive Kevin Murphy said Ferguson could not confirm its profit outlook for the full year, as it was too early to understand the impact of Covid-19 on current trading.
“Recent government actions to contain the spread of Covid-19 and societal reactions, alongside any potential actions we will take to mitigate them are not reflected in existing market forecasts and it is too early to quantify them,” he said.
Murphy said that Ferguson was taking steps to “mitigate any potential impacts” from the outbreak, adding: “Our immediate priority is safeguarding the health and wellbeing of our associates, supporting our business and customers and helping the communities in which we operate.”
The subdued guidance comes as Ferguson prepares to demerge its UK business, Wolseley, and considers a US listing following the split.
The company is considering two listing structures: one in which it seeks an additional listing on a major US exchange while remaining part of the FTSE 100, and another in which its primary listing is moved to the US, removing it from the blue chip index.
In today’s results, Ferguson said the Wolseley demerger was on track to complete during this calendar year, and that its board expects to make a further announcement on its listing decision later this spring.
The plumbing group reported five per cent growth in the US for the first half, but its UK and Canadian business reported weaker performances, with revenue from the divisions falling 4.7 per cent and 6.5 per cent respectively.
Murphy said the company was pleased with its progress during the first half “given the markets we serve remained flat”.
“Ferguson remains well positioned for long-term success operating in attractive and fragmented markets with a robust business model and backed by a strong balance sheet and liquidity position,” he said.