Ferguson announced its financial results for Q4 and fiscal year end 2023.
Fourth quarter highlights
- Sales decline of 1.7% (with organic decline of 5.3%) against a 21.4% prior year growth comparable.
- Operating margin of 10.0% (10.4% on an adjusted basis).
- Diluted earnings per share of $2.85 ($2.77 on an adjusted basis).
- Declared quarterly dividend of $0.75 per share, implying an annualized increase of 9% over the prior year.
- Completed three acquisitions during the quarter, generating annualized revenue of approximately $450 million.
- Share repurchases of $124 million during the quarter with an outstanding balance of approximately $500 million remaining under the current share repurchase program at July 31, 2023.
Full year highlights
- Sales growth of 4.1%, on top of a 25.3% prior year growth comparable, with continued market share gains.
- Operating margin of 8.9% (9.8% on an adjusted basis).
- Diluted earnings per share of $9.12 ($9.84 on an adjusted basis).
- Net cash provided by operating activities of $2.7 billion, an increase of $1.6 billion over the prior year.
- Total dividends declared of $3.00 per share representing 9% growth over the prior year.
- Completed eight acquisitions during the year, generating annualized revenue of approximately $780 million.
- Share repurchases of $908 million during the year.
- Balance sheet remains strong with net debt to adjusted EBITDA of 1.0x.
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.”