Plumbing and heating products specialist Ferguson (FERG) belongs to an elite club of UK companies that have cracked the formula to success in the US. Over four-fifths of the group’s continuing revenue and 95 per cent of underlying trading profit comes from across the Atlantic. Intuitively, spinning off its UK Wolseley business to focus on its more lucrative operations makes sense.
However, Ferguson has further ambitions to abandon the FTSE 100 altogether and shift its primary listing to the US, eyeing the “substantial incremental pool of capital” there. The group says discussions with a large chunk of its shareholders indicate a majority would support such a move. But if the vote were held now, it would likely fall short of the 75 per cent approval required. Some institutional investors oppose the strategy because they have mandates preventing them from holding shares outside of the UK.
For now, it is settling for a secondary US listing, guiding that it will revisit the issue in a year’s time. Chairman Geoff Drabble – former chief executive of Ashtead (AHT) – believes this is “the most orderly and equitable path” to achieving its ultimate aim. Amid the current market turmoil, a vote on a dual listing won’t occur until the first half of 2021. Should conditions normalise, the Wolseley demerger is expected to complete this year as planned.
Uncertainty created by the Covid-19 pandemic has prompted the group to withdraw its full-year guidance and the 67.6c interim dividend. The $500m (£405m) share buyback programme has been suspended, although $100m-worth of shares have already been repurchased.
Mr Drabble remains bullish on his company’s prospects, having recently purchased 4,983 shares worth almost £250,000. He was joined by non-executive director Thomas Schmitt, who bought 13,500 shares for a little under £70,000.
| Buys | ||||||
| Company | Director/PDMR | Date | No. of shares | Price (p) | Aggregate value (£) | Comments |
| Capital & Counties Properties | Situl Jobanputra (cfo) | 17 Apr 20 | 12,500 | 88 | 11,000 | |
| Capital & Counties Properties | Michelle McGrath | 17 Apr 20 | 20,000 | 88 | 17,600 | |
| Ferguson | Thomas Schmitt | 15 Apr 20 | 13,500 | 5,147 | 69,497 | ADSs, converted from $ |
| Ferguson | Geoff Drabble (ch) | 16 Apr 20 | 4,983 | 5,004 | 249,349 | |
| Go-Ahead | Elodie Brian (cfo) | 21 Apr 20 | 2,500 | 1,205.42 | 30,135 | |
| Intercede | Klaas van der Leest (ce) | 17 Apr 20 | 35,000 | 53.75 | 18,813 | Residual holding 53,904 shares |
| Medica | Stephen Davies | 15 Apr 20 | 51,282 | 117 | 60,000 | |
| Rentokil | Julie Southern | 16 Apr 20 | 4,891 | 406.82 | 19,898 | |
| Robert Walters | Robert Walters (ce) | 21 Apr 20 | 25,685 | 389 | 99,915 | Residual holding 2,639,356 shares |
| Smurfit Kappa | Anne Anderson | 16 Apr 20 | 3,668 | 2,249 | 82,493 | Converted from € |
| Smurfit Kappa | Frits Beurskens | 17 Apr 20 | 2,800 | 2,327 | 65,156 | Converted from € |
| SRT Marine Systems | Simon Tucker (ce) | 14 Apr 20 | 400,000 | 25 | 100,000 | Placing participation |
| Sells | ||||||
| Company | Director/PDMR | Date | No. of shares | Price (p) | Aggregate value (£) | Comments |
| Genus | Daniel Hartley (co sec) | 17 Apr 20 | 750 | 3,610 | 27,075 |
