Ferguson on track as strong US growth offsets weak UK

Ferguson, the plumbing and heating products supplier, said it was on track to meet annual profit expectations after strong growth in the US offset tough trading in the UK's stuttering housing market during the first quarter.

The world's biggest distributor of plumbing and heating products reported a 10% rise in revenue from continuing operations to $5.2bn (£3.9bn) in the three months to the end of October.

Excluding currency changes, acquisitions and disposals, revenue increased 7.6%. Trading profit excluding exceptional items rose 13.9% to $394m.

Ferguson's biggest market is the US where organic revenue rose 8.3% and trading profit increased 14.2% to $363m. In Canada and Central Europe organic revenue rose 7.7%.

In the UK, where Ferguson trades under its old name of Wolseley, organic revenue growth was 3.2% but most of this rise was due to inflation. Gross margins weakened as customers resisted suppliers' price rises and repair, maintenance and improvement markets were weak.

UK trading profit fell 3.8% to $21m. Ferguson said it was stepping up efforts to cut costs at its British business.

Ferguson's results reflect contrasting fortunes in the US and UK property markets. US house prices are rising amid strong demand though supply is weak. In the UK, confidence in the housing market has fallen to a five-year low due to growing concerns about the economy, falling sales volumes and flatlining prices.

John Martin, Ferguson's chief executive, said: "Our business continued to grow well in our first quarter with strong organic growth in the US. Growth in Canada was also strong, though market conditions remain challenging in the UK where we are continuing to implement our transformation programme.

"Since the end of the quarter, organic revenue growth has been broadly in line with the first quarter. The group expects trading profit for the full year to be in line with current analyst consensus expectations."