Ferguson delivers £289m special dividend payout after Wolseley UK sale

Plumbing and heating firm Ferguson has posted an 18% jump in half-year profits and cheered investors with a 400 million US dollar (£289 million) special dividend payout after offloading its UK business.

The FTSE 100-listed firm said it would make the 180 cents (£1.30) a share payout to investors in May following the £308 million sale of its UK-based Wolseley division at the start of the year.

Ferguson is now focused on the US and Canada after selling Wolseley to private equity firm Clayton, Dubilier & Rice on January 29.

The deal came more than a year after Ferguson first launched the process to offload its UK arm, which has 542 branches in the UK, three distribution centres, and around 4,400 full-time employees.

Ferguson’s results showed the group made pre-tax profits of 739 million US dollars (£534 million) in the six months to January 31, up from profits of 628 million US dollars (£454 million) a year earlier on sales up 4.2%.

The group also announced an interim divi of 72.9 cents (52.7p) a share and a 400 million US dollar (£289 million) share buyback.

It said sales had continued to grow so far in its second half.

Kevin Murphy, group chief executive of Ferguson, said: “Since the start of the third quarter, we have continued to trade well, generating high single digit organic revenue growth.

“While the outlook for the second half remains very uncertain, we expect to generate above market revenue growth in good residential markets aided by increasing inflation.

“However, we expect this to be partially offset by increasing supply chain pressures, transportation costs and the reversal of temporary cost reduction actions taken during the initial stages of the lockdown starting in April of last year.”

The group said it invested 224 million US dollars (£162 million) in the first half, largely on four acquisitions.

Shares in Ferguson have surged over the past year after revealing plans to sell-off Wolseley and focus on the American market, with the stock around 20% higher than it was in February last year.