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Ferguson PLC

Ferguson PLC Continued to Grow Strongly

Ferguson PLC (LON:FERG), has today announced its third quarter results for the 3 months to 30th April 2018.

Ongoing businesses1

US$ millions

Q3 2018

Q3 2017

 

Change

Organicchange3

Revenue

5,080

4,610

+10.2%

+7.1%

Trading profit2

356

304

+17.1%

Trading days

63

63

Net debt

260

1,466

 

Third quarter highlights

− Ongoing revenue 10.2% ahead of last year, including 7.1% organic growth.

− Gross margin of the ongoing business was 29.3%, 0.4% ahead of last year.

− Ongoing trading profit of $356 million was 17.1% ahead of last year.

− Sale of Stark Group completed on 29 March 2018 for approximately $1.2 billion.

− Net debt of $260 million at 30 April 2018, before special dividend of $4 per share ($1 billion) to be paid on 29 June.

John Martin, Group Chief Executive, Ferguson PLC commented:

“The US continued to grow strongly with organic revenue growth of 10.6% in the quarter. Growth was broadly based across all US regions, supported by good market conditions. We also continued to manage gross margins effectively, making further progress. We generated good growth in Canada and in the UK we continued to focus on executing the restructuring plan.

The fourth quarter has started well with organic revenue growth in line with the third quarter. Given the third quarter out turn, the Group is well positioned for a successful outcome for the year.”

Group results

Revenue in the quarter was $5,080 million, 8.0% ahead of last year at constant exchange rates and 7.1% ahead on an organic basis. Gross margins continued to improve, up 40 basis points to 29.3% and operating costs were well controlled. Trading profit of $356 million was 16.3% higher than last year at constant exchange rates. Exceptional costs were $6 million in the quarter.

Financial position

Net debt at 30 April 2018 was $260 million (30 April 2017: $1,466 million) after receipt of proceeds from the Stark Group disposal of approximately $1.2 billion. During the quarter we purchased a further 1.9 million shares for $147 million (£104 million) in accordance with the ongoing $650 million (£500 million) share buyback programme announced on 3 October 2017. This brought the total amount purchased to 6.7 million shares for $482 million (£356 million) at 30 April 2018 and since the end of the quarter the share buyback programme has now been completed. In addition, $100 million of additional funding was paid in to the UK defined benefit pension scheme and the interim dividend of $142 million was paid.

Following approval by shareholders at the General Meeting on 23 May 2018 a special dividend of $4 per share, equivalent to about $1 billion, will be paid on 29 June to all shareholders on the share register at 8 June 2018. The accompanying share consolidation of 18 new ordinary shares for 19 existing ordinary shares was completed on 11 June 2018. Proforma net debt after payment of the special dividend and completion of the share buyback was 0.9x EBITDA.

Since 30 April 2018 we have completed one acquisition for total consideration of $8 million in the USA. The acquisition pipeline remains strong.

Outlook

The fourth quarter has started well with organic revenue growth in line with the third quarter. Given the third quarter outturn, the Group is well positioned for a successful outcome for the year.

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