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Ferguson (FERG)

Ferguson plc is a public company limited by shares incorporated in Jersey under the Companies (Jersey) Law 1991 (as amended) and is headquartered in the UK. It operates as the ultimate parent company of the Group. Its registered office is 13 Castle Street, St Helier, Jersey, JE1 1ES, Channel Islands.

Company profile

Ticker
FERG, FERGY
Employees
Incorporated
Location
Fiscal year end
Watsco ...
SEC CIK
Subsidiaries
Ferguson Enterprises, LLC • A P Supply Company • A. P. Supply Co. • Action Automation, a Wolseley Industrial Group company • Action Supply Co. • Bruce-Rogers Company • Equarius Waterworks, Meter & Automation Group • Ferguson Enterprises of Virginia, LLC • Ferguson International • Ferguson Waterworks International ...

Analyst ratings and price targets

Last 3 months

Calendar

27 Sep 22
27 Sep 22
31 Jul 23
Quarter (USD) Jul 22 Jul 21
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Net income
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Diluted EPS
Annual (USD) Jul 22 Jul 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS

Financial report summary

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Risks
  • Weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, particularly in the United States, may adversely affect the profitability and financial stability of our customers, and could negatively impact our sales growth and results of operations.
  • We could be adversely impacted by declines in the residential and non-residential markets, as well as the RMI and new construction markets.
  • The industries in which we operate are highly competitive, and changes in competition, including as a result of consolidation, could result in decreased demand for our products and related service offerings and could have a material effect on our sales and profitability.
  • Fluctuating product prices may adversely affect the Company’s business, financial condition and results of operations.
  • We have funding risks related to our defined benefit pension plans.
  • Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs.
  • We may not be able to access the capital and credit markets on terms that are favorable to us.
  • Potential regional or global barriers to trade or a global trade war could increase the cost of our products, which could adversely impact the competitiveness of our products and our financial results.
  • The Company’s strategy could be materially adversely affected by its indebtedness.
  • Fluctuations in foreign currency may have an adverse effect on reported results of operations.
  • Our ability to pay dividends or effect other returns of capital in the future depends, among other things, on our financial performance.
  • We cannot guarantee that our share repurchase program will be fully consummated or that our share repurchase program will enhance long-term shareholder value, and share repurchases could increase the volatility of the price of our ordinary shares and could diminish our cash reserves.
  • The Company is a holding company with no business operations of its own and depends on its subsidiaries for cash, including in order to pay dividends.
  • We have relocated our primary listing to the United States, which could cause volatility in our share price and shareholder base.
  • Corporate responsibility, specifically related to ESG matters, may impose additional costs and expose us to new risks.
  • Our ordinary shares are subject to market price volatility and the market price may decline disproportionately in response to developments that are unrelated to our operating performance.
  • We are a foreign private issuer and, as a result, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies.
  • Our ordinary shares are listed to trade on more than one stock exchange, and this may result in price variations.
  • If our domestic or international supply chain or our fulfillment network for our products is ineffective or disrupted for any reason, or if these operations are subject to trade policy changes, our business, financial condition and results of operations could be adversely affected.
  • Execution of our operational strategies could prove unsuccessful, which could have a material adverse effect on our business, financial condition and results of operations.
  • We may not rapidly identify or effectively respond to direct and/or end customers’ wants, expectations or trends, which could adversely affect our relationship with customers, our reputation, the demand for our products and our market share.
  • Acquisitions, partnerships, joint ventures, dispositions and other business combinations or strategic transactions involve a number of inherent risks, any of which could result in the benefits anticipated not being realized and could have an adverse effect on our business, financial condition and results of operations.
  • If we fail to qualify for supplier rebates or are unable to maintain or adequately renegotiate our rebate arrangements, our results of operations could be materially adversely affected.
  • If we are unable to protect our sensitive data and information systems against data corruption, cybersecurity incidents or network security breaches, or if we are unable to provide adequate security in the electronic transmission of sensitive data, it could adversely affect the operations of our business.
  • We are required to maintain the privacy and security of personal information in compliance with privacy and data protection regulations worldwide. Failure to meet the requirements could harm our business and damage our reputation with customers, suppliers, and associates.
  • A failure of a key information technology system or process could adversely affect the operations of our business.
  • We are subject to payment-related risks that could increase our selling, general and administrative expenses, expose us to fraud or theft, subject us to potential liability, and potentially disrupt our business.
  • The COVID-19 pandemic has had an adverse impact on many sectors of the economy and it could have a material and adverse impact on our business and results of operations.
  • In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operations.
  • Failure to achieve and maintain a high level of product and service quality could damage our reputation and negatively impact our business, financial condition and results of operations.
  • The nature of our operations may expose our associates, contractors, customers, suppliers and other individuals to health and safety risks and we may incur property, casualty or other losses not covered by our insurance policies and damage to our reputation.
  • We occupy most of our facilities under non-cancelable leases with terms of 10 years or less. We may be unable to renew leases on favorable terms or at all. Also, if we close a facility, we may remain obligated under the applicable lease.
  • We have risks related to the management and protection of our facilities and inventory.
  • Changes in, or interpretations of, United States, United Kingdom, Swiss or Canadian tax laws could have a material adverse effect on our business, financial condition, results of operations and cash flows.
  • We are and may continue to be involved in legal proceedings in the course of our business, and while we cannot predict the outcomes of those proceedings and other contingencies with certainty, some of these outcomes may adversely impact our business, financial condition, results of operations and cash flows.
  • Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters, could significantly affect our financial results or financial condition.
  • We are subject to various risks related to the local and international nature of our business, including domestic and foreign laws, regulations and standards. Failure to comply with such laws and regulations or the occurrence of unforeseen developments such as litigation could adversely affect our business.
Management Discussion
  • The table below summarizes the Company’s Consolidated Statement of Earnings for the periods indicated.
  • Net sales were $28.6 billion in fiscal 2022, an increase of $5.8 billion, or 25.3%, compared with the same period in 2021. The increase in net sales was primarily driven by price inflation and higher volume, collectively contributing $5.4 billion, within both residential and non-residential end markets, as well as acquisitions which contributed $0.4 billion. The Company’s sales within its residential markets grew in both RMI and new construction, particularly in the first half of fiscal 2022, and non-residential markets also grew, particularly within the civil/infrastructure market compared to fiscal 2021. The impact of price inflation was approximately 19% for fiscal 2022.
  • Gross profit was $8.8 billion in fiscal 2022, an increase of $1.8 billion, or 25.4%, compared with fiscal 2021, reflecting increased net sales. The gross profit margin of 30.7% increased 10 basis points from 30.6% in the prior year, due to price realization, particularly during the first half of fiscal 2022, being partially offset by business mix and commodity pricing during the second half of the year.

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