Ferguson PLC - Trading Update
At the time of the half year results on
Protecting Ferguson's associates and supporting our customers
Ferguson provides a critical function in the supply of essential products and services which has been widely recognized by the relevant authorities in our trading geographies. Our trade customers maintain heating, ventilation and air conditioning (HVAC), clean and wastewater services to millions of homes and businesses. We keep key residential, commercial, industrial and public sector facilities running and we also support the major public utilities with the products they need for repair and maintenance of their networks.
During these challenging times, our immediate priority is safeguarding the health and wellbeing of our associates and customers. We have implemented new precautions across our business in adherence with the recommended
Group trading to
Revenue growth %
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1 One additional trading day in current year added 2.5% to both US revenue growth ongoing operations respectively.
In the US since the half year, revenue growth accelerated in the two month period to 31 March and was broadly based across the regions and major business units with the order book at record levels. Within the last ten days the impact of COVID-19 has significantly increased mainly as a result of government actions and societal reactions as individual cities and states in the US have been increasingly impacted by the virus.
As a result the overall trading situation on the ground is therefore mixed across the US. For example, in recent weeks revenue has deteriorated in
To date, the majority of our US branch network has remained open. However, we are preparing carefully for lower activity levels given the likelihood of further regions experiencing disruption due to the spread of the virus. In light of recent CISA2 guidelines we have been working with the relevant authorities across each state and local jurisdiction to ensure we can continue to support our customers.
As indicated at the time of the Half Year results given the unprecedented uncertainty around the impact of COVID-19 it is not possible to assess with certainty the impact it will have on the Group's financial performance for the year. The Company is therefore not providing guidance for the year to
defining essential critical infrastructure workers.
Cost reduction actions
In light of the evolving COVID-19 situation, the Company has moved quickly to protect liquidity and cashflow while ensuring it is well positioned to benefit when the recovery takes place. Ferguson benefits from an agile business model and, as we prepare for short-term revenue pressure our approach has been to protect our skilled workforce which is critical to the long-term success of our business. We have already taken a number of prudent cost saving measures to protect short-term profitability and cash generation of the business. This has included a hiring freeze, a reduction in associate hours, overtime and the use of temporary staff, and temporary lay-offs being implemented in the worst hit regions. We have taken decisive action in the worst hit regions whilst ensuring the business is appropriately sized for the post COVID-19 operating environment.
The Board's strategic intent to demerge the
Robust financial position
Ferguson has a proven cash generative business model and enters the current period with a strong balance sheet and significant liquidity headroom. The Company's net debt excluding leases at
The Company has also introduced the following measures to protect its cash position:
· We have suspended the
· The Company has paused current M&A activity due to current market uncertainty. In the current financial year to date we have invested c.
· After careful consideration the Board has decided to withdraw the interim dividend due for payment on
· Following a careful review of existing capital expenditure plans we now expect it to be in the region of
Beyond the near-term challenges of COVID-19 the Group remains well positioned to deliver consistent outperformance.
"Given the significant challenges of COVID-19 we have adjusted our operations rapidly to both safeguard the health and wellbeing of our associates but also to support essential services in our local markets. We would like to thank our associates for their commitment and dedication to our business and we are incredibly proud of their efforts in recent weeks as we support key industries.
"Ferguson is a strong and resilient business and our business model remains attractive and cash generative. We are taking appropriate actions on cost and cashflow given the uncertain near-term trading outlook. We have good liquidity which positions us well to navigate this period of uncertainty and to support the recovery when the effects of COVID-19 subside."
This announcement contains inside information.
For further information, please contact:
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+44 (0) 118 927 3800
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+44 (0) 7711 875070
+44 (0) 7894 417060
+44 (0) 20 7404 5959
Notes to editors:
2. Legal disclaimer
Certain information included in this announcement is forward-looking and involves known and unknown risks, assumptions and uncertainties that could cause actual results or outcomes to differ from those expressed or implied in any forward-looking statement. There forward-looking statements are based on the Company's current belief and expectations about future events and cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company's plans and objectives for future operations, including, without limitation, discussions of expected future revenues, financing plans, prospects, growth, strategies, expected expenditures and divestments, risks associated with changes in economic conditions, the strength of the plumbing and heating market in
This information is provided by RNS, the news service of the
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