Wolseley Parent to Move Headquarters Back to UK

The parent company of Wolseley UK - Ferguson PLC - has announced its intention to move its tax domicile to the UK in May 2019.

In its interim results presentation, Ferguson stated that tax reform in Switzerland (where the company is currently domiciled) had made the country less attractive, adding that the UK corporate tax regime had become more competitive in recent years. 

The Group reported an 8.1% rise in half-year turnover (six months to January 31 2019) having made gains in the US business.  

UK revenue for the same period declined by 10.3% to $1,177m, with flat like-for-like growth of 0.3%.

Highlights

− Ongoing revenue 8.1% ahead of last year including organic growth of 6.5%.
− Strong US organic revenue growth of 9.7% with continued market share gains and trading profit growth.
− Within our Blended Branches network organic revenue growth was strong in every region:
− East +8.4%
− West +10.1%
− Central +9.2%
− US Waterworks business generated strong organic revenue growth of 7.8%.
− Solid trading performance in Canada and good progress on strategic initiatives in the UK.
− Completed a number of acquisitions including Blackman and Wallwork with 33 branches in NY and NJ.
− Exit of Dutch plumbing and heating business and other surplus assets generated $255 million of cash.
− Interim dividend of 63.1c up 10.0%.
− Strong balance sheet, net debt : EBITDA ratio of 1.1x.
− Proposal to move tax domicile to the UK.

John Martin, Chief Executive, commented:

“Ferguson performed well in the first half with continued strong organic growth in the US of 9.7%. Growth in the US was widespread across all geographic regions, major business units and end-markets. In our Blended Branches network the East grew organic revenue 8.4%, with the West up 10.1% and the Central region was 9.2% ahead. The Waterworks business also made good progress generating organic revenue growth of 7.8%. In other geographies residential markets weakened in Canada and in the UK markets were flat.

“After a strong revenue performance in the first half our growth rate has moderated recently in line with conditions in our markets. While we still expect to generate further revenue growth in the second half, we have revised our estimates of Group organic revenue growth to between 3-5%. Consequently, we expect trading profit for the full year to be towards the lower end of the range of analysts’ expectations(2).

“We will continue to execute our strategy of delivering excellent customer service to maximise profitable growth opportunities whilst remaining vigilant on costs. Our capital allocation policy is unchanged and we will continue to maintain a strong balance sheet.”

(2) Current analysts’ consensus for Group trading profit for 2019 is published on the Company’s corporate website. The bottom of the range is $1,585 million and the average is $1,629 million.

Source : insight DIY Team and Ferguson PLC

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