26th Sep 2023 13:29
(Alliance News) - 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 USD29.73 billion from USD28.57 billion a year prior. Revenue beat the company-compiled consensus forecast of USD29.50 billion.
Pretax profit, however, was 9.0% lower at USD2.46 billion from USD2.71 billion. Selling, general and administrative expenses were 5.1% higher at USD5.92 billion and Ferguson reported impairment charges of USD125 million, against none a year prior.
For the fourth quarter alone, net sales declined 1.7% on-year to USD7.84 billion from USD7.97 billion. Pretax profit was 5.8% lower at USD730 million from USD775 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 USD3.00, up 9.1% from USD2.75. 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.
By Eric Cunha, Alliance News news editor
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