Ferguson PLC (NYSE:FERG) stock rose 2.38% (As on September 28, 11:52:37 AM UTC-4, Source: Google Finance) after the company in the fourth quarter of FY 22 has reported the strong sales growth of 21.4%, with core strengths driving market share gains. Operating profit growth was of 23.1% (21.5% on an adjusted basis) driven by strong sales and operating cost leverage. The company has delivered operating margin of 10.2% (10.7% on an adjusted basis). The company has completed seven acquisitions in the quarter with annualized revenues of approximately $470 million. Share repurchases of $627 million were made during the fourth quarter. The balance sheet remained strong and at the bottom end of the leverage range with 1x net debt to adjusted EBITDA. The over-market organic growth is complemented by a 2-pronged acquisition strategy focused on geographic expansion and new capabilities to further drive over-market organic growth. The investment of $650 million in fiscal year ’22 reflected the addition of approximately $750 million of incremental annualized revenue.

Further, businesses like plumber supply, broaden the reach of our existing footprint in St. Louis, expanding our relationships to new customers. While Aaron & Company, a leading distributor of plumbing and HVAC across New Jersey helps cement the relevance to the dual trade contractor. Acquisitions like D2, Triton and STE, bolster the geosynthetic and erosion control capabilities within our market leading Waterworks customer group. The company has also acquired Minka Lighting and Fans during the year, a highly respected own brand lighting and ceiling fan company.

Moreover, organic revenue growth was of 19.8% was bolstered by a further 2.3% growth from acquisitions. The company provided a breakout of revenue growth across the largest customer groups in the U.S. As Kevin outlined, we saw strength across both the residential and non-residential end markets with all customer groups performing well in the quarter. Residential Trade and Building and Remodel grew over 20% with robust demand in both new construction and RMI. HVAC, where the majority of the business serves the residential end market, grew by 18% with a 2 year stack of 43%, while Residential Digital Commerce grew modestly against a strong comparable.

For fiscal 2023, the company expects net sales growth of low single digits driven by market outperformance and completed acquisitions, Adjusted operating margin to be in the range of 9.3% to 9.9%, Interest expense to be in the range of $170 – $190 million, Adjusted effective tax rate to be in the range of approximately 25% and Capital expenditures to be in the range of $350 – $400 million.