Plans to spin off Wolseley remain uncertain, says plumbing giant Ferguson

Plumbing and heating giant Ferguson has said its plans to spin off UK arm Wolseley into a separate listed company are still uncertain because of the Covid-19 pandemic.

Ferguson’s board is looking at potential alternative solutions, after the economic problems caused by the virus threw its original plans off course.

The UK business grew revenue by 5.2% to 569 million dollars in the three months to the end of October.

The news comes over a year after Ferguson said it would part ways with Wolseley.

A statement from the company said it was “assessing other separation options in parallel with progress towards the demerger to facilitate the exit of the Wolseley UK business”.

Excluding UK results, which are counted separately because of the divorce plans, overall revenue jumped 3.1% to 5.4 billion dollars (£4.1 billion) in the first three months of Ferguson’s financial year.

Trading profit grew by nearly 12% to 504 million dollars (£378 million) over the period, as its markets in both the US and Canada showed a resilient set of results.

Chief executive Kevin Murphy said: “We are pleased with the revenue growth in the first quarter and today’s results further demonstrate the resilience of our business model.

“We are firmly focused on revenue growth and continued market share gains at the same time as carefully controlling gross margins and costs.”

The company felt confident enough in the quarter to start snapping up smaller businesses again, buying two companies in the US.

Ferguson said it had managed to continue growing in otherwise flat markets since the start of November, but added it is still cautious for how the rest of the financial year will look.

Mr Murphy added: “Since the start of the second quarter Ferguson has continued to generate low single digit revenue growth in broadly flat markets although we remain cautious on the outlook for the year as a whole, considering current pandemic trends.

“Despite these potential headwinds the business is in very good shape and we are well prepared should there be any further market related disruption and overall management’s expectations for the 2021 financial year are unchanged.”