Ferguson Enterprises Inc on Tuesday predicted modest growth in the year ahead after a subdued end to the financial year just ended.

In the three months to July 31, the Newport News, Virginia-based heating and plumbing products distributor posted net income of $451 million, or $2.23 per share, down from $584 million and $2.85 a year prior.

But operating profit rose 3.7% to $811 million from $782 million. The operating margin improved to 10.2% from 10.0%.

Net sales rose 1.4% to $7.95 billion from $7.84 billion.

Organic revenue declined 0.2% with the adverse impact of foreign exchange rates of 0.1%, offset by acquisition growth of 1.7%, Ferguson said.

Weakness in certain commodity related categories drove modest overall price deflation of around 2%. Consequently, volumes on an organic basis were up around 2%, the firm said.

Net sales in the US business grew 1.3%, with an organic revenue decline of 0.2% offset by 1.5% from acquisitions.

Chief Executive Kevin Murphy said: ‘The year finished in line with our expectations. Despite market headwinds and deflation during the year, we continued to outperform our markets, returned to volume growth, expanded gross margins and delivered solid operating margin performance. Our strong cash flow and balance sheet allow for continued investment in organic growth, sustainable dividend growth, consolidation of our fragmented markets through acquisitions and the continuation of our share repurchase program.’

For the full year, net sales fell 0.3% to $29.64 billion from $29.73 billion. Net income fell to $1.74 billion, or $8.53 per share, from $1.89 billion or $9.12 per share.

Looking ahead, Murphy said 2025 guidance reflects ‘modest full year growth with continued market outperformance.’

‘While we anticipate an ongoing challenging near term market environment, we will continue to invest in scale and capabilities to take advantage of multi-year structural tailwinds such as underbuilt and ageing US housing, non-residential large capital projects and our opportunity with the dual-trade plumbing and HVAC contractor.’

For financial 2025, Ferguson forecast low single digit net sales growth, an adjusted operating margin between 9.0% to 9.5%, and capital expenditure of $400 million to $450 million.

The firm declared a quarterly dividend of $0.79 per share taking the full-year payout to $3.16, growth of 5.3% for the year, from $3.00.

Shares in Ferguson rose 2.5% to 15,230.00 pence each in London on Tuesday afternoon.

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