Ferguson shares knocked after gloomier full-year outlook
The plumbing supplier said market conditions had seen revenue growth ease back since its first half.
Plumbing supplier Ferguson has warned over slowing growth and said full-year profits will be at the lower end of market forecasts.
Shares slumped 9% as the group – formerly known as Wolseley – said market conditions had seen revenue growth ease back since its first half.
It said it now expects organic sales to grow by between 3% and 5% over the second half – a marked slowdown on the 6.5% reported for the first half.
The gloomier full-year outlook comes despite Ferguson reporting an 8% rise in trading profits to 744 million US dollars (£564 million) for the six months to January 31.
On a constant currency basis, revenues jumped 8.9% higher, but the half-year figures were lower than expected.
Ferguson also confirmed plans to switch its headquarters back to the UK from Switzerland following unfavourable Swiss corporate tax reforms.
It will put the plans to a shareholder vote on April 29.
Ferguson chief executive John Martin said: “After a strong revenue performance in the first half, our growth rate has moderated recently in line with conditions in our markets.
“While we still expect to generate further revenue growth in the second half, we have revised our estimates of group organic revenue growth to between 3% and 5%.
“Consequently, we expect trading profit for the full year to be towards the lower end of the range of analysts’ expectations.”
In the US, where the company makes more than 90% of its profits, Ferguson saw organic revenue growth of 9.7%, or 12.2% higher on a constant currency basis, and an 8.2% rise in trading profits to 700 million US dollars (£531 million).
But it continued to struggle in the UK amid difficult markets, with constant currency sales tumbling 10.4% and trading profits slumping 16.7%.
Ferguson has been overhauling its UK arm, axing branches and quitting unprofitable wholesale business in an attempt to turn around trading.
The group changed its name from Wolseley in 2017 as part of efforts to focus more on the US, where it makes the bulk of its revenue and trades as Ferguson.
But the Wolseley name has been retained in the UK, replacing previous brands such as Plumb Center.