Ferguson considers US listing, announces $500m buyback

The company, which is currently in the process of demerging its UK business, Wolseley, said it was mulling "the most appropriate" listing structure for the group.

The first option would involve seeking an additional listing of its shares on a major US stock exchange whilst maintaining its existing premium listing on the London Stock Exchange. The second would involve seeking a change of primary listing of Ferguson's ordinary shares to a major US stock exchange. The group would need to change its premium listing in London to a standard listing and as a result, Ferguson would no longer be eligible for inclusion in the FTSE 100 index.

Both options being put forward to shareholders would require majority approval of 75%, Ferguson said.

Chairman Geoff Drabble said: "The board believes that Ferguson's natural long-term listing location is the USA but it is mindful that this is a complex issue for many of our existing shareholders. We will now commence a period of further consultation with our major institutional shareholders and will listen carefully to their feedback before setting out any firm proposals in the Spring."

Ferguson also announced that it plans to buy back up to $500m of its shares over the next 12 months.

"In line with its capital allocation priorities and reflecting management's confidence in the business and the continuing strong cash generation of the company, and after taking into account the excellent opportunities to invest in organic growth and acquisitions, the board considers that the company has surplus cash resources available," it said.

Ferguson, which has returned $4bn of surplus cash to shareholders over the last eight years, said its balance sheet remains "strong" and it will continue to target net debt in the range of 1x to 2x EBITDA.

At 1010 GMT, the shares were up 5.5% at 7,270p.