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Ferguson PLC on Tuesday reported an annual sales rise, but forecast a muted top-line outcome for the new financial year, as the heating and plumbing products distributor grapples with a ‘challenging market backdrop’.
In the financial year that ended July 31, net sales rose 4.1% to $29.73 billion from $28.57 billion a year prior. Revenue beat the company-compiled consensus forecast of $29.50 billion.
Pretax profit, however, was 9.0% lower at $2.46 billion from $2.71 billion. Selling, general and administrative expenses were 5.1% higher at $5.92 billion and Ferguson reported impairment charges of $125 million, against none a year prior.
For the fourth quarter alone, net sales declined 1.7% on-year to $7.84 billion from $7.97 billion. Pretax profit was 5.8% lower at $730 million from $775 million.
‘The company’s decrease in net sales was mainly driven by declines in residential, partially offset by growth in non-residential sales compared to the prior year period. As expected, price inflation stepped down from approximately 5% in the third quarter to approximately 1% in the fourth quarter,’ Ferguson said.
Ferguson’s annual dividend totalled $3.00, up 9.1% from $2.75. During the year just gone, Ferguson paid four equal quarterly dividends, as opposed to a semi-annual distribution previously.
Looking ahead, Ferguson expects flat net sales in financial 2024.
Chief Executive Kevin Murphy said: ‘FY2024 financial guidance reflects a continued challenging market backdrop, particularly in the first half of our fiscal year against strong prior year comparables. Our balanced end market exposure positions us well to leverage emerging multi-year structural tailwinds such as non-residential megaprojects. We remain confident in the strength of our markets over the medium and longer term and expect to capitalize on attractive growth opportunities.’
Ferguson shares rose 2.5% to 12,705.00 pence each in London on Tuesday afternoon.
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