(Alliance News) - Plumbing and heating products supplier Ferguson PLC lifted its payout on Tuesday and announced plans for a new USD1.0 billion buyback.
Shares in the company were 1.2% higher at 10,638.81 pence each in London during early dealings on Tuesday.
The Wokingham, England-based firm said it saw strong annual profit growth which beat consensus estimates and noted it has kicked off the new year with "strong momentum" though it cautioned comparatives will get tougher later on.
For the financial year that ended July 31, revenue was USD22.79 billion, up 14% from USD19.94 billion in financial 2020, and pretax profit was USD1.89 billion, up 46% from USD1.29 billion.
Annual trading profit, which excludes exceptional items and amortisation of acquired intangible assets, was USD2.18 billion, up 31% from USD1.66 billion. The figure beat company-compiled consensus estimates of USD2.09 billion on revenue that had been forecast at USD22.50 billion.
"We were pleased with earnings growth that significantly outpaced revenue growth to deliver robust operating leverage and margin, demonstrating the agility of our business model. Cash generation was solid, as we continued to invest in inventory availability to service our customers, while our balance sheet remains strong. We welcomed talented associates from seven acquisitions as we continued to consolidate our fragmented markets," Chief Executive Officer Kevin Murphy said.
"The group started the new financial year with strong momentum, with organic revenue growth at similar levels to [the fourth quarter]. We expect a year of good growth overall but we anticipate a tapering in the second half on tougher prior year comparatives."
Murphy noted margins progress may also "moderate" going forward due to inflationary pressures.
Ferguson lifted its total dividend by 15% to 239.4 cents per share, from 208.2 cents a year earlier.
What's more, it also announced plans for a USD1.0 billion buyback, after "taking into account the group's prospects and strong financial position".
It will repurchase the shares over the next 12 months. During the year to July, Ferguson said it returned USD1.4 billion to shareholders through dividends and buybacks.
By Eric Cunha; ericcunha@alliancenews.com
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Ferguson (FERG)