A weak US housing market dragged Ferguson (FERG) third-quarter organic revenue growth beneath its half-year forecasts. The world’s largest trade distributor of plumbing and heating products achieved growth of 2.7 per cent, below the range of 3 to 5 per cent it previously set out. Ferguson has taken the opportunity to make use of its potent balance sheet, announcing a $500m (£394m) share buyback programme that will take place over the next 12 months.
Like-for-like US revenue growth fell to 3.3 per cent from 9.7 per cent in the second quarter. Ferguson’s largest suppliers achieved no growth on average in the first calendar quarter against an average rate of 8 per cent in the prior year. New residential housing starts and residential construction put-in-place data lowered in the quarter, while commercial construction put-in-place data grew “very modestly”. Like-for-like revenues in Canada contracted 2.9 per cent, owing to rising interest rates and government initiatives enacted to restrict mortgage credit.
Broker Peel Hunt forecasts 2019 full-year pre-tax profits of $1.5bn and earnings per share of 518.8¢, rising to $1.6bn and 526.6¢ in 2020.
