TIDMFERG 
 
 

Kevin Murphy, Ferguson CEO, commented "Our teams continued to execute, delivering strong full year results with continued market outperformance, as our balanced business mix served us well in challenging markets. I would like to thank our associates for their unwavering commitment to help make our customers' complex projects simple, successful and sustainable. As expected, disciplined working capital management drove excellent cash flow in the year. Our cash generative model and strong balance sheet allow us to invest for organic growth, sustainably grow our dividend, consolidate our fragmented markets through acquisitions and return capital to shareholders.

 

"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."

 

FY2024 Guidance

 
Total Company                   2024 Guidance 
Net sales*                      Broadly flat 
Adjusted operating margin**     9.2% - 9.8% 
Interest expense                $190 - $210 million 
Adjusted effective tax rate**   Approximately 25% 
Capital expenditures            $400 - $450 million 
 
 
* Net sales guidance assumes mid-single digit market decline with continued 
Company market outperformance, contribution from already completed 
acquisitions and one additional sales day. Overall impact of price inflation 
estimated to be broadly neutral for the year. 
** The Company does not reconcile forward-looking non-GAAP measures. See 
"Non-GAAP Reconciliations and Supplementary information". 
 
 
                    Three months ended July 31, 
US$ (In millions, 
except per share 
amounts)            2023                      2022                      Change 
                    Reported(1)  Adjusted(2)  Reported(1)  Adjusted(2)  Reported  Adjusted 
Net sales           7,838        7,838        7,971        7,971        (1.7) %   (1.7) % 
Gross margin        30.6 %       30.6 %       30.5 %       30.5 %       +10 bps   +10 bps 
Operating profit    782          814          814          849          (3.9) %   (4.1) % 
Operating margin    10.0 %       10.4 %       10.2 %       10.7 %       (20) bps  (30) bps 
Earnings per share 
 - diluted          2.85         2.77         2.73         2.85         +4.4 %    (2.8) % 
Adjusted EBITDA                  858                       896                    (4.2) % 
 
 
                    Twelve months ended July 31, 
US$ (In millions, 
except per share 
amounts)            2023                      2022                      Change 
                    Reported(1)  Adjusted(2)  Reported(1)  Adjusted(2)  Reported  Adjusted 
Net sales           29,734       29,734       28,566       28,566       +4.1 %    +4.1 % 
Gross margin        30.4 %       30.4 %       30.7 %       30.7 %       (30) bps  (30) bps 
Operating profit    2,659        2,917        2,820        2,951        (5.7) %   (1.2) % 
                                                                        (100) 
Operating margin    8.9 %        9.8 %        9.9 %        10.3 %       bps       (50) bps 
Earnings per share 
 - diluted          9.12         9.84         9.59         9.76         (4.9) %   +0.8 % 
Adjusted EBITDA                  3,105                     3,153                  (1.5) % 
Net debt(2) :                    1.0x                      1.0x 
 Adjusted EBITDA 
 
 
(1)    The results are presented in accordance with U.S. GAAP on a continuing 
       operations basis. 
(2)    The Company uses certain non-GAAP measures, which are not defined or 
       specified under U.S. GAAP. See the section titled "Non-GAAP 
       Reconciliations and Supplementary Information." 
 

Summary of financial results

 

Fourth quarter

 

Net sales of $7.8 billion were 1.7% below last year. Organic revenue declined 5.3%, partially offset by acquisition growth of 2.2% and 1.4% positive net impact from one additional sales day and the impact of foreign exchange rates. 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.

 

Gross margin of 30.6% was 10 basis points ahead of last year. Operating expenses continued to be diligently managed and we remain focused on productivity and efficiencies while investing in core capabilities for future growth.

 

Reported operating profit was $782 million (10.0% operating margin), 3.9% lower than last year. Adjusted operating profit of $814 million (10.4% adjusted operating margin) was 4.1% lower than last year.

 

Reported diluted earnings per share was $2.85 (Q4 2022: $2.73), an increase of 4.4%, while adjusted diluted earnings per share of $2.77 decreased 2.8% with the reduction due to lower adjusted operating profit and higher interest expense, partially offset by the impact of share repurchases.

 

Full year

 

Net sales of $29.7 billion were 4.1% ahead of last year, 1.5% higher on an organic basis with an additional 2.5% from acquisitions. An additional selling day contributed 0.4% to growth while the adverse impact of foreign exchange rates was 0.3%. Average inflation during the year was approximately 8%.

 

Gross margin of 30.4% was 30 basis points lower than last year and operating expenses continued to be well controlled. Reported operating profit was $2.7 billion (8.9% operating margin), 5.7% lower than last year. Adjusted operating profit of $2.9 billion (9.8% adjusted operating margin) was 1.2% lower than last year.

 

Reported diluted earnings per share was $9.12 (FY2022: $9.59), a decrease of 4.9%, while adjusted diluted earnings per share of $9.84 increased 0.8% due to the slightly lower adjusted operating profit and higher interest expense, offset by the impact of share repurchases.

 

USA - fourth quarter

 

Net sales in the US business declined 1.5%, with an organic revenue decline of 5.5% partially offset by 2.4% from acquisitions and a 1.6% positive impact from one additional sales day.

 

Residential end markets, which comprise just over half of US revenue, slowed further during the quarter as expected. New residential housing start and permit activity has remained relatively stable on a sequential basis but remains below prior year levels, while repair, maintenance and improvement ("RMI") work remained more resilient. Overall, residential revenue declined by approximately 4% in the fourth quarter.

 

Non-residential end markets, representing just under half of US revenue, continued to moderate with non-residential revenue growing by approximately 2% in the fourth quarter. Industrial and non-residential waterworks projects saw continued strength in the quarter on top of difficult prior year comparables and, as expected, we are seeing increased levels of megaproject related bid activity.

 

Adjusted operating profit of $804 million was 3.0% or $25 million behind last year.

 

We completed three acquisitions during the quarter that included Bruce Supply Corp., a plumbing distributor in the New York City Metro operating from 6 locations and The Kennedy Companies, a waterworks distribution business in the mid-Atlantic region with 9 locations. Additionally, we completed the acquisition of S. G. Torrice, an HVAC distributor in the New England region with 15 locations. In aggregate these businesses generate annualized revenue of approximately $450 million.

 

Canada - fourth quarter

 

Net sales compressed by 5.1%, with an organic revenue decline of 2.7%, a 1.6% positive impact from one additional sales day, and a further 4.0% due to the adverse impact of foreign exchange rates. Similar to the US segment, non-residential end markets have been more resilient than residential end markets. Adjusted operating profit of $22 million declined by $13 million compared to last year.

 

Segmental overview

 
                    Three months                  Twelve months ended 
                    ended July 31,                July 31, 
US$ (In millions)   2023    2022       Change     2023     2022        Change 
Net sales: 
USA                 7,428   7,539      (1.5 )%    28,291   27,067      4.5  % 
Canada              410     432        (5.1 )%    1,443    1,499       (3.7 )% 
Total net sales     7,838   7,971      (1.7 )%    29,734   28,566      4.1  % 
 
Adjusted operating 
profit: 
USA                 804     829        (3.0 )%    2,892    2,893       --   % 
Canada              22      35         (37.1)%    76       112         (32.1)% 
Central and other 
 costs              (12  )  (15  )                (51   )  (54   ) 
Total adjusted 
 operating profit   814     849        (4.1 )%    2,917    2,951       (1.2 )% 
 

Financial position

 

Net debt to adjusted EBITDA at July 31, 2023 was 1.0x and during the year we invested $0.4 billion in capital expenditures, paid $0.7 billion of dividends, invested $0.6 billion in eight acquisitions, and repurchased 7.0 million of our outstanding shares equating to $0.9 billion. We have a remaining outstanding balance of $0.5 billion under the current share repurchase program at July 31, 2023.

 

We have declared a quarterly dividend of $0.75, having transitioned from a semi-annual distribution schedule earlier in the fiscal year. This implies a 9% increase, as compared to a quarter of the prior year's total dividend, and will be paid on November 15, 2023 to shareholders on the register as of October 6, 2023. This brings the full year dividend to $3.00, a growth of 9% for the year.

 

There have been no other significant changes to the financial position of the Company.

 

Investor conference call and webcast

 

A call with Kevin Murphy, CEO and Bill Brundage, CFO will commence at 8:30 a.m. ET (1:30 p.m. BST) today. The call will be recorded and available on our website after the event at corporate.ferguson.com.

 
Dial in number     US:    +1 646 787 9445 
  UK:                    +44 (0) 20 4587 0498 
 

Ask for the Ferguson call quoting 710245. To access the call via your laptop, tablet or mobile device please go to corporate.ferguson.com. If you have technical difficulties, please click the "Listen by Phone" button on the webcast player and dial the number provided.

 

About us

 

Ferguson plc (NYSE: FERG; LSE: FERG) is a leading value-added distributor in North America providing expertise, solutions and products from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more. We exist to make our customers' complex projects simple, successful and sustainable. Ferguson is headquartered in the U.K., with its operations and associates solely focused on North America and managed from Newport News, Virginia. For more information, please visit corporate.ferguson.com or follow us on LinkedIn linkedin.com/company/ferguson-enterprises.

 

Analyst resources

 

For further information on quarterly financial breakdowns, visit corporate.ferguson.com on the Investors menu under Analyst Consensus and Resources.

 

Financial calendar

 
Annual General Meeting record date*      October 4, 2023 
Annual General Meeting                   November 28, 2023 
Q1 Results for period ending October     December 5, 2023 with call from 8:30 
31, 2023                                 a.m. ET 
 
 
*Shareholders entered on the register of members of the Company on October 4, 
2023 will be entitled to attend or vote at the Annual General Meeting 
 

Timetable for the quarterly dividend

 

The timetable for payment of the quarterly dividend of $0.75 per share is as follows:

 
Ex-dividend date:    October 5, 2023 
Record date:         October 6, 2023 
Payment date:        November 15, 2023 
 

The quarterly dividend is declared in U.S. dollars and since March 2021, the default currency for dividends is also U.S. dollars. Those shareholders who have not elected to receive the dividend in pounds sterling and who would like to make such an election may do so online by going to Computershare's Investor Center and returning the completed form to the address located in the upper--right corner of the form. The deadline to elect to receive the quarterly dividend in pounds sterling, or to amend an existing election, is 5:00 p.m. ET on October 20, 2023 and any requests should be made in good time ahead of that date.

 

The form is available at www-us.computershare.com/investor/#home and navigating to Company Info > FERG > GBP Dividend Election and Mandate Form.

 

The completion of cross-border movements of shares between the U.K. and the U.S. is contingent upon the receiving broker identifying and acknowledging any such movements. Where a cross-border movement of shares has been initiated but not completed by the relevant dividend record date (being October 6, 2023 for this quarterly dividend), there is a risk that the dividend in respect of such shares will not be received on the dividend payment date. Accordingly, shareholders are advised not to initiate any cross-border movements of shares during the period from October 4, 2023 through October 6, 2023 inclusive.

 

Cautionary note on forward-looking statements

 

Certain information included in this announcement is forward-looking, including within the meaning of the Private Securities Litigation Reform Act of 1995, and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, statements or guidance regarding or relating to our future financial position, results of operations and growth, projected interest in and ownership of our ordinary shares by investors including as a result of inclusion in North American market indices, plans and objectives for the future including our capabilities and priorities, risks associated with changes in global and regional economic, market and political conditions, ability to manage supply chain challenges, ability to manage the impact of product price fluctuations, our financial condition and liquidity, legal or regulatory changes, statements regarding our expectations for U.S. residential and non-residential growth drivers and other statements concerning the success of our business and strategies. Forward-looking statements can be identified by the use of forward-looking terminology, including terms such as "believes," "estimates," "anticipates," "expects," "forecasts," "guidance," "intends," "continues," "plans," "projects," "goal," "target, " "aim," "may," "will," "would," "could" or "should" or, in each case, their negative or other variations or comparable terminology and other similar references to future periods. Forward-looking statements speak only as of the date on which they are made. They are not assurances of future performance and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Although we believe that the forward-looking statements contained in this announcement are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including but not limited to: weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, and other factors beyond our control, including disruption in the financial markets and any macroeconomic or other consequences of the current conflict in Ukraine or potential conflict between China and Taiwan; failure to rapidly identify or effectively respond to direct and/or end customers' wants, expectations or trends, including costs and potential problems associated with new or upgraded information technology systems or our ability to timely deploy new omni-channel capabilities; decreased demand for our products as a result of operating in highly competitive industries and the impact of declines in the residential and non--residential markets, as well as the RMI and new construction markets; changes in competition, including as a result of market consolidation or competitors responding more quickly to emerging technologies (such as generative artificial intelligence ("AI")); failure of a key information technology system or process as well as exposure to fraud or theft resulting from payment--related risks; privacy and protection of sensitive data failures, including failures due to data corruption, cybersecurity incidents or network security breaches; ineffectiveness of or disruption in our domestic or international supply chain or our fulfillment network, including delays in inventory, availability at our distribution facilities and branches, increased delivery costs or lack of availability; failure to effectively manage and protect our facilities and inventory or to prevent personal injury to customers, suppliers or associates, including as a result of workplace violence; unsuccessful execution of our operational strategies; failure to attract, retain and motivate key associates; exposure of associates, contractors, customers, suppliers and other individuals to health and safety risks; inherent risks associated with acquisitions, partnerships, joint ventures and other business combinations, dispositions or strategic transactions; regulatory, product liability and reputational risks and the failure to achieve and maintain a high level of product and service quality; inability to renew leases on favorable terms or at all, as well as any remaining obligations under a lease when we close a facility; changes in, interpretations of, or compliance with tax laws in the United States, the United Kingdom, Switzerland or Canada; our indebtedness and changes in our credit ratings and outlook; fluctuations in product prices (e.g., commodity-priced materials, inflation/deflation) and foreign currency; funding risks related to our defined benefit pension plans; legal proceedings as well as failure to comply with domestic and foreign laws, regulations and standards, as those laws, regulations and standards or interpretations and enforcement thereof may change, or the occurrence of unforeseen developments such as litigation; our failure to comply with the obligations associated with being a U.S. domestic issuer and the costs associated therewith; the costs and risk exposure relating to environmental, social and governance ("ESG") matters, including sustainability issues, regulatory or legal requirements, and disparate stakeholder expectations; adverse impacts caused by a public health crisis; and other risks and uncertainties set forth under the heading "Risk Factors" in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2023 as filed with the Securities and Exchange Commission ("SEC") on June 7, 2023, our Annual Report on Form 10-K for the fiscal year ended July 31, 2022 as filed with the SEC on September 27, 2022, and in other filings we make with the SEC in the future.

 

Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with our legal or regulatory obligations, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Ferguson plc

Non-GAAP Reconciliations and Supplementary Information

 

(unaudited)

 

Non-GAAP items

 

This announcement contains certain financial information that is not presented in conformity with U.S. GAAP. These non-GAAP financial measures include adjusted operating profit, adjusted operating margin, adjusted net income, adjusted earnings per share - diluted, adjusted EBITDA, adjusted effective tax rate, net debt and net debt to adjusted EBITDA ratio. The Company believes that these non-GAAP financial measures provide users of the Company's financial information with additional meaningful information to assist in understanding financial results and assessing the Company's performance from period to period. Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company's Board of Directors. Such non-GAAP adjustments include amortization of acquired intangible assets, discrete tax items, and any other items that are non-recurring. Non-recurring items may include business restructuring charges, corporate restructuring charges, which includes costs associated with the Company's listing in the United States, gains or losses on the disposals of businesses which by their nature do not reflect primary operations, as well as certain other items deemed non-recurring in nature and/or that are not a result of the Company's primary operations. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for results reported under U.S. GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of operations that, when viewed with U.S. GAAP results, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review the Company's financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

 

The Company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures on a forward-looking basis because it is unable to predict with reasonable certainty or without unreasonable effort non-recurring items, such as those described above, that may arise in the future. The variability of these items is unpredictable and may have a significant impact.

 

Summary of Organic Revenue

 

Management evaluates organic revenue as it provides a consistent measure of the change in revenue year-on-year. Organic revenue growth (or decline) is determined as the growth (or decline) in total reported revenue excluding the growth (or decline) attributable to currency exchange rate fluctuations, sales days, acquisitions and disposals, divided by the preceding financial year's revenue at the current year's exchange rates.

 

A summary of the Company's historical revenue and organic revenue growth is below:

 
             Q4 2023               Q3 2023               Q2 2023               Q1 2023               Q4 2022 
                        Organic               Organic               Organic               Organic               Organic 
             Revenue     Revenue   Revenue     Revenue   Revenue     Revenue   Revenue     Revenue   Revenue     Revenue 
USA          (1.5 )%    (5.5 )%    (1.6 )%    (2.5 )%    5.4  %     2.6 %      17.4 %     13.0 %     22.1 %     19.8 % 
Canada       (5.1 )%    (2.7 )%    (9.5 )%    (1.5 )%    (4.5 )%    3.0 %      3.6  %     8.2  %     10.5 %     14.2 % 
Continuing 
 operations  (1.7 )%    (5.3 )%    (2.0 )%    (2.5 )%    4.9  %     2.7 %      16.6 %     12.7 %     21.4 %     19.5 % 
 

For further details regarding organic revenue growth, visit corporate.ferguson.com on the Investors menu under Analyst Consensus and Resources.

 
Reconciliation of Net Income to Adjusted Operating Profit and 
Adjusted EBITDA 
 
                    Three months ended     Twelve months ended 
                    July 31,               July 31, 
(In millions)           2023      2022         2023    2022 
Net income          $   584      $580      $   1,889  $2,122 
Loss (Income) from 
 discontinued 
 operations (net 
 of tax)                --        2            --      (23   ) 
Income from 
 continuing 
 operations             584       582          1,889   2,099 
Provision for 
 income taxes           146       193          575     609 
Interest expense, 
 net                    48        40           184     111 
Other expense 
 (income), net          4         (1    )      11      1 
Operating profit        782       814          2,659   2,820 
Corporate 
 restructurings(1)      --        5            --      17 
Impairments and 
 other charges(2)       (2    )   --           125     -- 
Amortization of 
 acquired 
 intangibles            34        30           133     114 
Adjusted Operating 
 Profit                 814       849          2,917   2,951 
Depreciation and 
 impairment of 
 PP&E                   37        35           148     140 
Amortization and 
 impairment of 
 non-acquired 
 intangibles            7         12           40      62 
Adjusted EBITDA     $   858      $896      $   3,105  $3,153 
 
 
(1)    For the three and twelve months ended July 31, 2022, corporate 
       restructuring costs primarily related to the incremental costs of the 
       Company's listing in the United States. 
(2)    For the three months ended July 31, 2023, the benefit recorded in 
       impairments and other charges related to a change in estimated 
       impairment charges in connection with the closure of certain, smaller 
       underperforming branches in the United States recorded in the third 
       quarter of fiscal 2023. For the twelve months ended July 31, 2023, 
       impairments and other charges related to the $107 million in software 
       impairment charges and $18 million in charges associated with the 
       closure of certain smaller, underperforming branches in the United 
       States. 
 

Net Debt : Adjusted EBITDA Reconciliation

 

To assess the appropriateness of its capital structure, the Company's principal measure of financial leverage is net debt to adjusted EBITDA. The Company aims to operate with investment grade credit metrics and keep this ratio within one to two times.

 

Net debt

 

Net debt comprises bank overdrafts, bank and other loans and derivative financial instruments, excluding lease liabilities, less cash and cash equivalents. Long-term debt is presented net of debt issuance costs.

 
                            As of July 31, 
(In millions)                2023     2022 
Long-term debt              $3,711   $3,679 
Short-term debt              55       250 
Bank overdrafts(1)           17       32 
Derivative liabilities       18       4 
Cash and cash equivalents    (601 )   (771 ) 
Net debt                    $3,200   $3,194 
Adjusted EBITDA             $3,105   $3,153 
Net Debt: Adjusted EBITDA    1.0x     1.0x 
 
 
(1)    Bank overdrafts are included in other current liabilities in the 
       Company's Consolidated Balance Sheet. 
 
 
Reconciliation of Net Income to Adjusted Net Income and Adjusted 
EPS - Diluted 
 
                    Three months ended 
                    July 31, 
(In millions, 
except per share 
amounts)            2023                    2022 
                               per 
                               share(1)            per share(1) 
Net income          $   584    $   2.85     $580   $   2.72 
Loss from 
 discontinued 
 operations (net 
 of tax)                --         --        2         0.01 
Income from 
 continuing 
 operations             584        2.85      582       2.73 
Corporate 
 restructurings(2)      --         --        5         0.02 
Impairments and 
 other charges(3)       (2  )      (0.01 )   --        -- 
Amortization of 
 acquired 
 intangibles            34         0.17      30        0.14 
Discrete tax 
 adjustments(4)         (32 )      (0.16 )   --        -- 
Tax impact on 
 non-GAAP 
 adjustments(5)         (16 )      (0.08 )   (9 )      (0.04 ) 
Adjusted net 
 income             $   568    $   2.77     $608   $   2.85 
 
Diluted weighted 
 average shares 
 outstanding                       205.1               213.4 
 
 
                    Twelve months ended 
                    July 31, 
(In millions, 
except per share 
amounts)            2023                 2022 
                             per 
                             share(1)             per share(1) 
Net income          $1,889   $   9.12    $2,122   $   9.69 
(Income) from 
 discontinued 
 operations (net 
 of tax)             --          --       (23  )      (0.10) 
Income from 
 continuing 
 operations          1,889       9.12     2,099       9.59 
Corporate 
 restructurings(2)   --          --       17          0.08 
Impairments and 
 other charges(3)    125         0.60     --          -- 
Amortization of 
 acquired 
 intangibles         133         0.64     114         0.52 
Discrete tax 
 adjustments(4)      (36  )      (0.17)   (72  )      (0.33) 
Tax impact on 
 non-GAAP 
 adjustments(5)      (73  )      (0.35)   (21  )      (0.10) 
Adjusted net 
 income             $2,038   $   9.84    $2,137   $   9.76 
 
Diluted weighted 
 average shares 
 outstanding                     207.2                218.9 
 
 
(1)    Per share on a dilutive basis. 
(2)    For the three and twelve months ended July 31, 2022, corporate 
       restructuring costs primarily related to the incremental costs of the 
       Company's listing in the United States. 
(3)    For the three months ended July 31, 2023, the benefit recorded in 
       impairments and other charges related to a change in estimated 
       impairment charges in connection with the closure of certain, smaller 
       underperforming branches in the United States recorded in the third 
       quarter of fiscal 2023. For the twelve months ended July 31, 2023, 
       impairments and other charges related to the $107 million in software 
       impairment charges and $18 million in charges associated with the 
       closure of certain smaller, underperforming branches in the United 
       States. 
(4)    For the three and twelve months ended July 31, 2023, discrete tax 
       adjustments primarily related to the release of uncertain positions 
       following the lapse of statute of limitations, as well as adjustments 
       in connection with amended returns. For the three and twelve months 
       ended July 31, 2022, the discrete tax adjustments primarily related to 
       the release of uncertain tax positions following the closure of tax 
       audits and prior year adjustments, including amended tax return items. 
(5)    For the three and twelve months ended July 31, 2023, the tax impact on 
       non-GAAP adjustments primarily related to the impairments and other 
       charges and amortization of acquired intangibles. For the three and 
       twelve months ended July 31, 2022, the tax impact on non-GAAP 
       adjustments primarily related to the amortization of acquired 
       intangibles. 
 
 
Ferguson plc 
 Condensed Consolidated Statements of Earnings 
 (unaudited) 
 
                 Three months ended  Twelve months ended 
                 July 31,            July 31, 
(In millions, 
except per 
share amounts)    2023      2022      2023       2022 
Net sales        $7,838    $7,971    $29,734    $28,566 
Cost of sales     (5,436)   (5,536)   (20,709)   (19,810) 
Gross profit      2,402     2,435     9,025      8,756 
Selling, 
 general and 
 administrative 
 expenses         (1,544)   (1,544)   (5,920 )   (5,635 ) 
Impairments and 
 other charges    2         --        (125   )   -- 
Depreciation 
 and 
 amortization     (78   )   (77   )   (321   )   (301   ) 
Operating 
 profit           782       814       2,659      2,820 
Interest 
 expense, net     (48   )   (40   )   (184   )   (111   ) 
Other (expense) 
 income, net      (4    )   1         (11    )   (1     ) 
Income before 
 income taxes     730       775       2,464      2,708 
Provision for 
 income taxes     (146  )   (193  )   (575   )   (609   ) 
Income from 
 continuing 
 operations       584       582       1,889      2,099 
(Loss) income 
 from 
 discontinued 
 operations 
 (net of tax)     --        (2    )   --         23 
Net income       $584      $580      $1,889     $2,122 
 
Earnings per 
share - Basic: 
Continuing 
 operations      $2.86     $2.74     $9.15      $9.64 
Discontinued 
 operations       --        (0.01 )   --         0.11 
Total            $2.86     $2.73     $9.15      $9.75 
 
Earnings per 
share - 
Diluted: 
Continuing 
 operations      $2.85     $2.73     $9.12      $9.59 
Discontinued 
 operations       --        (0.01 )   --         0.10 
Total            $2.85     $2.72     $9.12      $9.69 
 
Weighted 
average number 
of shares 
outstanding: 
Basic             204.3     212.3     206.4      217.7 
Diluted           205.1     213.4     207.2      218.9 
 
 
Ferguson plc 
 Condensed Consolidated Balance Sheets 
 (unaudited) 
 
                                                   As of July 31, 
(In millions)                                       2023     2022 
Assets 
Cash and cash equivalents                          $601     $771 
Accounts receivable, net                            3,597    3,610 
Inventories                                         3,898    4,333 
Prepaid and other current assets                    953      834 
Assets held for sale                                28       3 
Total current assets                                9,077    9,551 
Property, plant and equipment, net                  1,595    1,376 
Operating lease right-of-use assets                 1,474    1,200 
Deferred income taxes, net                          300      177 
Goodwill                                            2,241    2,048 
Other non-current assets                            1,307    1,309 
Total assets                                       $15,994  $15,661 
 
Liabilities and shareholders' equity 
Accounts payable                                   $3,408   $3,607 
Other current liabilities                           2,021    2,192 
Total current liabilities                           5,429    5,799 
Long-term debt                                      3,711    3,679 
Long-term portion of operating lease liabilities    1,126    878 
Other long-term liabilities                         691      640 
Total liabilities                                   10,957   10,996 
Total shareholders' equity                          5,037    4,665 
Total liabilities and shareholders' equity         $15,994  $15,661 
 
 
Ferguson plc 
 Condensed Consolidated Statements of Cash Flows 
 (unaudited) 
 
(In millions)                                  Twelve months ended 
                                               July 31, 
                                                   2023       2022 
Cash flows from operating activities: 
Net income                                     $   1,889     $2,122 
Income from discontinued operations                --         (23    ) 
Income from continuing operations                  1,889      2,099 
Depreciation and amortization                      321        301 
Share-based compensation                           51         57 
Non-cash impact of impairments                     125        15 
Changes in deferred income taxes                   (104   )   41 
Decrease (increase) in inventories                 607        (927   ) 
Increase in receivables and other assets           (1     )   (780   ) 
(Decrease) increase in accounts payable and 
 other liabilities                                 (196   )   436 
Increase (decrease) in income taxes payable        24         (103   ) 
Other operating activities                         11         10 
Net cash provided by operating activities of 
 continuing operations                             2,727      1,149 
Net cash used in operating activities of 
 discontinued operations                           (4     )   -- 
Net cash provided by operating activities          2,723      1,149 
Cash flows from investing activities: 
Purchase of businesses acquired, net of cash 
 acquired                                          (616   )   (650   ) 
Capital expenditures                               (441   )   (290   ) 
Other investing activities                         3          (6     ) 
Net cash used in investing activities of 
 continuing operations                             (1,054 )   (946   ) 
Net cash provided by investing activities of 
 discontinued operations                           --         24 
Net cash used in investing activities              (1,054 )   (922   ) 
Cash flows from financing activities: 
Purchase of own shares by Employee Benefit 
 Trust                                             --         (92    ) 
Purchase of treasury shares                        (908   )   (1,545 ) 
Proceeds from sale of treasury shares              17         13 
Net change in debt and bank overdrafts             (170   )   1,440 
Cash dividends                                     (711   )   (538   ) 
Other financing activities                         (35    )   (22    ) 
Net cash used in financing activities              (1,807 )   (744   ) 
Change in cash, cash equivalents and 
 restricted cash                                   (138   )   (517   ) 
Effects of exchange rate changes                   22         (40    ) 
Cash, cash equivalents and restricted cash, 
 beginning of period                               785        1,342 
Cash, cash equivalents and restricted cash, 
 end of period                                 $   669       $785 
 

For further information please contact

Investor relations

Brian Lantz, Vice President IR and Communications

Mobile: +1 224 285 2410

Pete Kennedy, Director of Investor Relations

Mobile: +1 757 603 0111

 

Media inquiries

John Pappas, Director of Financial Communications

 

Mobile: +1 484 790 2727

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230926027022/en/

 
    CONTACT: 

Ferguson plc

 
    SOURCE: Ferguson plc 
Copyright Business Wire 2023 
 

(END) Dow Jones Newswires

September 26, 2023 06:45 ET (10:45 GMT)

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