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(Alliance News) - Ferguson PLC on Tuesday said that it is well positioned for organic growth, after seeing both profit and sales rise in the first quarter of its new financial year.
For the three months that ended October 31, the Wokingham, England-based, US-focused plumbing and heating products supplier reported pretax profit of USD792 million, up 11% from USD711 million a year prior.
Net sales also grew, up 17% to USD7.93 billion from USD6.08 billion the previous year.
Ferguson recorded organic revenue growth of 13%, with a further 2.7% contribution from acquisitions and 1.5% from an additional sales day, partially offset by a 0.3% hit from foreign exchange rates.
During the quarter, Ferguson completed an acquisition comprising several locations of Monark Premium Appliance, a distributor of high-end appliances serving builders, designers, developers and homeowners in the US.
Subsequent to the quarter-end, it also acquired Airefco, a distributor heating, ventilation, and air conditioning equipment, serving customers in the Pacific Northwest region of the US, and Guarino Distributing Co, an HVAC distributor operating in Louisiana and Mississippi.
In aggregate, these three businesses generate annualised revenue of approximately USD270 million.
Looking ahead, Ferguson's guidance for the financial year remains unchanged. It expects adjusted operating margin of 9.3% to 9.9%, and capital expenditures of USD350 million to USD400 million.
Net sales growth of low single digits is expected, to be driven by market outperformance and completed acquisitions.
"Our associates continued to deliver a strong performance in the first quarter, demonstrating the core strengths of Ferguson. Their focus on taking care of our customers' complex projects drove strong growth and continued market share gains," said Chief Executive Officer Kevin Murphy.
"At the same time, we appropriately managed costs to position the business for macro economic headwinds. Strong cash generation in the quarter and a strong balance sheet enabled us to continue to invest for organic growth, consolidate our fragmented markets through acquisitions and return capital to shareholders."
Ferguson declared an interim quarterly dividend of USD0.75, up 9% year-on-year.
Ferguson shares were trading 0.8% higher at 9,584.00 pence each in London on Tuesday afternoon.
By Holly Beveridge; Alliance News reporter
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