We are pleased with earnings growth that significantly outpaced revenue growth to generate strong operating leverage, demonstrating the agility of our business model. Our balance sheet remains strong as we continue to invest in inventory availability to service our customers and return capital to shareholders through the ongoing share buy back program.
'Since the start of the second quarter, Ferguson has generated revenue growth similar to that of Q1 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.'
First quarter highlights
Supportive end markets and continued market share gains drove substantial sales growth.
Price inflation increased to low teens in the quarter.
Ability to manage price inflation along with good cost control generated particularly strong profit growth.
Completed four acquisitions since the start of the fiscal year with annualized revenues of
Completed
Summary of financial results
Net sales of
Gross margins of 31.3% were 170 basis points ahead of last year driven primarily by our ability to service customers while managing price inflation, enabled by the hard work of our sales associates and the strength of our supply chain. Operating expenses continued to be well controlled as we focused on productivity and efficiencies while investing in our talented associates, supply chain capabilities and technology program.
Reported operating profit was
Earnings per share on a diluted basis was
The US business grew net sales by 27.1% which comprised 25.2% organic growth and a further 1.9% from acquisitions. Price inflation was in the low teens during the quarter.
Residential end markets, which comprise just over half of our US revenue, remained robust in the first quarter. New residential housing starts and permits continued to grow in the quarter, as did residential repair, maintenance and improvement ('RMI') which performed strongly. Overall, Ferguson's residential revenue grew by approximately 24% in the first quarter.
Non-residential end markets saw strong growth as increased demand lapped weaker comparators. Our non-residential revenue grew by approximately 31% in the first quarter with leading non-residential economic indicators strengthening in recent months.
Adjusted operating profit was strong at
We completed two acquisitions during the quarter, Sunstate Meter & Supply, a waterworks meter distributor serving the
Net sales grew by 19.6% with inflation of high single digits. Organic revenue grew by 13.9% with a further 5.7% of growth due to the impact of foreign exchange rates. Residential end markets saw good growth and non-residential markets returned to growth. Adjusted operating profit of
Financial position and corporate updates
Net debt at
Following shareholder approval at the Annual General Meeting, the final dividend of
The shareholder vote on
There have been no other significant changes to the financial position of the Company.
Outlook
Since the start of the second quarter, Ferguson has generated revenue growth similar to that of Q1 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.
Contact:
Tel: +1 224 285 2410
Ferguson is a leading value-added distributor in
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