StockMarketWire.com - Plumbing and heating products group Ferguson reported Tuesday improved trading profit and revenue, led by 'good' growth in the US.

For the 12 months to 31 October, trading profit rose 9.9% to $432m and revenue increased 8.5% to $5.55bn.

Exceptional costs of $6m owing to a UK restructuring programme weighed on profit, though cost cuts helped steady performance.

Gross margin continued to improve, up 50 basis points to 29.6%, supported by recent acquisitions and the exit of low margin wholesale business in the UK last year, Ferguson said.

The US business grew revenue 9.6% on an organic basis, which included price inflation of about 3%, and acquisitions contributed a further 2.4%, the company said.

Stronger US growth helped offset weaker growth in the UK, where revenue fell 9.5% 'due to closed branches and the exit of low margin business,' the company added. While Canada grew revenue by 8.9% at constant currency and 3.3% on an organic basis.

'Ferguson continued to perform well in the first quarter with good organic growth in the US of 9.6 per cent in supportive markets. Growth in the US was widespread across all geographic regions and major business units. Canada continued to grow against tough prior year comparatives and the UK also grew modestly on a like-for-like basis,' said John Martin, Group Chief Executive.

'Since the end of the quarter, the US has continued to grow well and the current indications are that growth will continue in the months ahead. As a result, we expect trading profit for the full year to be in line with analysts' expectations.'

'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.'

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