Ferguson revenue falls 15% in April as Covid-19 takes toll

Ferguson's revenue dropped by more than 15% in April as the Covid-19 crisis hit sales across the plumbing and heating company's business

Revenue from continuing operations fell 2.2% in Ferguson's third quarter. After registering growth of 5.1% in the first two months of the period revenue fell 15.3% in April.

Underlying trading profit fell 1.5% to $334m (£272m) in the three months to the end of April as revenue from ongoing operations fell 0.9% to $4.75bn.

In the US, which makes up about 80% of Ferguson's business, revenue swung from 8.2% growth in February and March to a 9.3% decline in April. In Canada revenue shrank 7.7% in the first two months of the quarter and by a third in April.

Ferguson said trading in the US was varied with big falls in revenue in infection hotspots such as New York, Michigan and northern California. Revenue rose 8.5% at its US water, sewer and stormwater business, which faced fewer restrictions.

The biggest drop-off in business was in the UK where Ferguson is planning to split off its Wolseley division. After falling 10.3% in February and March revenue plunged by 60% in April, leading to a 26.5% drop for the quarter.

The update is Ferguson's second in a month after the FTSE 100 company withdrew its dividend and scrapped a $500m share buyback in April. The company has also frozen hiring, reduced working hours, laid off employees temporarily and cut capital spending to reduce costs and save cash during the crisis.

Kevin Murphy, Ferguson's chief executive, said: "Our strong revenue momentum in February and March was adversely impacted in April as federal, state and local Covid-19 restrictions and safety measures brought about a reduction in demand."

Net debt, excluding lease facilities, was $1.8bn on 30 April and the company had $1.3bn of cash and $1.8bn of undrawn credit facilities.

Ferguson also said it would make no changes to its pay policy after more than a quarter of shareholder votes failed to support the plan at November's annual general meeting. The company said it had explained its position to disgruntled investors and had not been made aware of new concerns.