Ferguson raises dividend as profit jumps on U.S. home improvement demand (updated)
16/03/2021 07:50
(Adds details of dividend, buyback, CEO quote, background)
March 16 (Reuters) - Plumbing and heating parts distributor
Ferguson Plc FERG.L raised its dividend and announced a share
buyback on Tuesday after posting a higher half-year profit,
buoyed by cost control measures and strong U.S. home improvement
demand.
The London-listed company, which has a secondary U.S.
listing, said half-year profit jumped 12.2% as residential
operations sales recovered with housing activity picking up in
the United States, its biggest market by revenue.
Ferguson's performance followed its U.S. peers Home Depot
HD.N and Lowe's Cos Inc LOW.N , who have also benefited from
stuck-at-home Americans snapping up building materials all
through the COVID-19 lockdowns. However, vaccine roll out and
return to normalcy have led many to believe that the trend could
fade for home-improvement chains. urn:newsml:reuters.com:*:nL4N2KT2F3 urn:newsml:reuters.com:*:nL4N2KU3EL
The company expects revenue growth in residential operations
to be partially offset by "increasing supply chain pressures,
transportation costs and reversal of temporary cost reduction
actions" taken during the initial stages of the lockdown in
2020, Chief Executive Officer Kevin Murphy said.
Ferguson's underlying trading profit rose to $837 million
for the six months ended Jan. 31 from $746 million a year ago.
The Virginia, U.S.-headquartered company also raised interim
dividend to 72.9 cents per share, which it said will be paid in
May, and announced a $400 million share buy back.
The demerger of Wolseley UK, aimed at allowing the group to
focus solely on its main U.S. business, paid off, with the
company expecting to pay a special dividend of 180 cents per
share, or $400 million in May 2021.
(Reporting by Vishwadha Chander and Pushkala Aripaka in
Bengaluru; Editing by Rashmi Aich)
((Vishwadha.Chander@thomsonreuters.com; within U.S. +1 646 223
8780, outside U.S. +91 80 6749 6132;))