(Alliance News) - Plumbing and heating products supplier Ferguson PLC lifted its annual outlook on Tuesday after seeing surging growth at the start of its financial year.
Ferguson said supportive end-markets and continued market share gains drove substantial sales growth during its first quarter.
For the three months to October 31, net sales were USD6.80 billion, up 27% from USD5.37 billion in the first quarter last year.
Pretax profit widened substantially to USD711 million from USD422 million. The improved bottom line was attributed to the group's ability to manage price inflation along with good cost control measures.
Ferguson's US business grew net sales by 27% which comprised 25% organic growth and a further 1.9% from acquisitions. Price inflation was in the low teens during the quarter, it noted.
In the FTSE 100, Ferguson was the best performer in early trading, up 4.3% at 12,072.48 pence each in London.
"Since the start of the second quarter, Ferguson has generated revenue growth similar to that of [first quarter] 2022. We continue to expect a tapering of growth in the second half on tougher prior year comparatives and we remain mindful that the recent tailwinds from inflation on gross margins will likely moderate, although the timing and extent remain uncertain. Given the strong momentum in the business and the agility of our business model, our full-year expectations have increased," Chief Executive Kevin Murphy said.
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.
"Our associates have continued to drive strong market share gains while navigating industry supply chain pressures, delivering particularly strong profit growth. We are pleased with earnings growth that significantly outpaced revenue growth to generate strong operating leverage, demonstrating the agility of our business model," Murphy added.
By Will Paige; willpaige@alliancenews.com
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Ferguson (FERG)