TIDMFERG
RNS Number : 8088D
Ferguson PLC
30 October 2020
FERGUSON PLC
(the "Company")
Publication Announcement: Annual Report and Accounts 2020 and
Notice of Annual General Meeting 2020
Further to the release of the Company's full year results
announcement on September 29, 2020, the Company announces that it
has today published its Annual Report and Accounts 2020 ("Annual
Report 2020"). The Company also announces that it has today posted
to shareholders the Notice of Annual General Meeting to be held on
Thursday, December 3, 2020 (the "Notice"). These documents can be
downloaded from the Company's website at www.fergusonplc.com .
In accordance with LR 9.6.1 and DTR 6.3.5(3) copies of the
documents listed below have been submitted to the National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
-- Annual Report and Accounts 2020; and
-- Notice of Annual General Meeting to be held on Thursday, December 3, 2020.
The Annual General Meeting will take place at 11:00am, on
Thursday, December 3, 2020 at 1020 Eskdale Road, Winnersh Triangle,
Wokingham, RG41 5TS, United Kingdom. Please note that in light of
mandatory measures imposed by the UK Government relating to the
outbreak of COVID-19 (Coronavirus), shareholders will not be able
to attend the Annual General Meeting in person. Shareholders should
refer to the Notice for further information.
The expected timetable for the Dividend and Annual General
Meeting is set out below:
2020
Ordinary Shares marked ex-entitlement November 12
to the Dividend
Record date for entitlement to the 6:00pm on November 13
Dividend
Latest time and date for election to 5:00pm on November 27
participate in the DRIP and submit
USD elections for the Dividend
Latest time and date for receipt of 11:00am on December 1
Forms of Proxy from shareholders
Annual General Meeting 11:00am on December 3
Pound Sterling Dividend value announced December 4
Payment of the Dividend to shareholders December 11
Purchase of Ordinary Shares for participants December 11
in the DRIP in respect of the Dividend
Ordinary Shares purchased pursuant December 16
to the DRIP in respect of the Dividend
credited to CREST accounts
If any of the above times and/or dates change, the revised times
and/or dates will be notified to Shareholders by an announcement to
a Regulatory Information Service ("RIS"). All definitions used in
the Notice have the same meaning when used in this
announcement.
Annual Report 2020
A condensed set of Ferguson plc financial statements and
information on important events that have occurred during the year
and their impact on the financial statements were included in the
Company's final results announcement on September 29, 2020. That
information together with the information set out below which is
extracted from the Annual Report 2020 constitute the requirements
of DTR 6.3.5 which is to be communicated via an RIS in unedited
full text. This announcement is not a substitute for reading the
full Annual Report 2020. Page and note references in the text below
refer to page numbers in the Annual Report 2020. To view the final
results announcement, visit the Company website:
www.fergusonplc.com .
Extract from Annual Report 2020
Principal risks and uncertainties
Principal risks:
A. New competitors and technology
B. Market conditions
C. Pressure on margins
D. Information technology
E. Health and safety
F. Regulations
G. Talent management and retention
The materialization of these risks could have an adverse effect
on the Group's results or financial condition. If more than one of
these risks occur, the combined overall effect of such events may
be compounded. The chart shows management's assessment of material
risks. Various strategies are employed to reduce these inherent
risks to an acceptable level. These are summarized in the tables on
the following pages. The effectiveness of these mitigation
strategies can change over time, for example with the acquisition
or disposal of businesses. Some of these risks remain beyond the
direct control of management. The risk management program,
including risk assessments, can therefore only provide reasonable
but not absolute assurance that risks are managed to an acceptable
level. As part of the ongoing risk management process, the Board
and the Group's management have identified and assessed emerging
risks, and worked with stakeholders to evaluate the impact of such
risks to the business. Although none of these risks are deemed to
be significant and are consequently not listed as one of the
Group's principal risks, they are tracked in case they evolve to
become more significant. One such risk relates to the geographical
composition of the Group's shareholder register. If shareholders
resident in the USA exceed 50 per cent of the total, the Group
would be subject to additional US regulatory requirements, most
notably SEC registration and reporting and Sarbanes Oxley
compliance. A detailed beneficial ownership study is conducted on
an annual basis to ensure compliance. Another emerging risk is
climate change and the impact of this on our business. During the
year, the Group commenced a project to get more clarity on the risk
climate changes presents. During the year, the Group has convened
subject matter experts from across our businesses to examine the
specific risks and opportunities to the Group posed by climate
change. The Group faces many other risks which, although important
and subject to regular review, have been assessed as less
significant and are not listed here. These include, for example,
natural catastrophe and business interruption risks and certain
financial risks. A summary of financial risks and their management
is provided on page 29.
Risks to the drivers of profitable growth
A. New competitors and technology
Inherent risk Definition and Changes during Mitigation
level: High impact the year The Group develops
Trend: Higher Wholesale and Ferguson Ventures and invests in
distribution extended its new business
businesses in network in the models, including
other industry start-up community, e-commerce, to
sectors have increasing early respond to changing
been disrupted visibility to customer and
by the arrival new competitors consumer needs.
of new competitors and potential This will allow
with lower-cost disruption. Partnerships the Group to
transactional and investments accelerate the
business models were made in time to market
or new technologies a range of technology for new revenue
to aggregate companies to streams and gain
demand away from also include insight on new
incumbents. industry focused disruptive technologies
venture capital and trends.
The Board is funds. New business
attuned to both model opportunities The Group remains
the risks and were identified vigilant to the
opportunities and progressed, threats and opportunities
presented by leveraging service in this space.
these changes design and rapid The development
and is actively prototype development of new business
engaged as the in the Ferguson models in our
Group takes action Ventures Innovation marketplace is
to respond. Lab, which is closely evaluated
focused on exploring - both for investment
areas of innovation potential and
and disruption threats.
by evaluating
consumer and
industry evolution
in technology
and service design.
In addition,
Ferguson accelerated
delivery of its
omnichannel strategy
to meet constantly
changing customer
demands and emerging
digital needs
as the rate of
customer adoption
of
e-commerce tools
accelerated due
to COVID-19.
B. Market conditions
Inherent risk Definition and Changes during Mitigation
level: High impact the year The Group cannot
Trend: No change This risk relates This risk is control market
to the Group's unchanged, notwithstanding conditions but
exposure the uncertainty believes it has
to short-term caused by COVID-19. effective measures
macroeconomic in place to respond
conditions and The Group has to changes. Ferguson
market cycles maintained a continues to
in our sector strong balance reinforce existing
(i.e. periodic sheet throughout measures in place,
market downturns). the year including:
and other measures - the development
Some of the factors have been taken of our business
driving market to manage the model;
growth are beyond cost base in - cost control,
the Group's control line with forecast pricing and gross
and are difficult growth. margin management
to forecast. initiatives,
The Group has including a focus
Further information again tested on customer service
on the market its financial and productivity
trends can be forecasts, including improvement;
found in our cash flow projections, - resource allocation
regional reviews against the impact processes; and
on pages 15 and of a severe market - capital expenditure
30 to 47. downturn, see controls
pages 54 and and procedures.
The Group continues 55.
to closely monitor The Group remains
the impact of prepared to implement
COVID-19 and appropriate mitigation
take prudent strategies to
steps to mitigate minimize any
any potential potential business
impacts to the disruption from
successful operation COVID-19.
of our business.
The Group is
also monitoring
for general recessionary
impacts in the
medium term that
may result from
the government-mandated
shutdowns that
occurred during
spring 2020.
C. Pressure on margins
Inherent risk Definition and Changes during Mitigation
level: High impact the year The Group's strategy
Trend: Higher The Group's ability Pressure on margins for tackling
to maintain attractive increased during this issue remains
profit margins the year, primarily unchanged. This
can be affected due to levels includes continuous
by a range of of competition improvements
factors, including and adverse mix in customer service,
some that are challenges arising product availability
beyond the Group's from temporary and inventory
control. These closure of the management; strict
include levels branch and showroom pricing controls
of demand and networks as a managed with
competition in result of COVID-19. proper data and
our markets, insight; and
the arrival of In response, effective maintenance
new competitors the Group has and management
with new business continued to of vendor rebate
models, the flexibility manage its cost programs. Revenues
of the Group's base in line from e-commerce,
cost base, changes with changes own brand, and
in the cost and in expected growth other growth
availability rates. Business sectors continue
of commodities unit performance, to grow and the
or goods purchased, including margins Group has made
the imposition achieved, were acquisitions
of new or increased monitored on in these areas
governmental a monthly basis during 2019/20,
tariffs on international throughout the while we paused
sources of supply, year. further merger
customer or supplier and acquisition
consolidation Ongoing gross activity due
or manufacturers margin was in to market uncertainty
shipping directly line with last caused by COVID-19.
to customers. year. Refer to pages
14 and 154 and
There is a risk 155 for more
that the Group information on
may not identify acquisitions
or respond effectively during the year.
to changes in
these factors. The performance
If it fails to of each business
do so, the amount unit is closely
of profit generated monitored and
by the Group corrective action
could be significantly taken when appropriate.
reduced.
Resource allocation
processes invest
capital in those
businesses capable
of generating
the best returns.
-------------------------- ---------------------------- ---------------------------
D. Information Technology ("IT")
---------------------------------------------- ---------------------------------------------------------
Inherent risk Definition and Changes during Mitigation
level : High impact the year Business leadership
Trend: No change The Group has IT risks have continues to
a clearly defined remained material execute a comprehensive
global technology and are being change management
strategy and closely monitored program designed
roadmap. Technology as we implement to transition
systems and data the clearly defined current business
are fundamental global technology practices and
to the future strategy and norms to adopt
growth and success roadmap (see new business
of the Group. page 23). Those capabilities.
Information Technology risks include
risks are categorized the potential Business Technology
as strategic for schedule and Omnichannel
and operational. delays, cost Centers of Excellence
overruns, functionality are in place
Strategic risks deferrals and to drive organizational
are threats that change management discipline around
could prevent disruptions on the prioritization
execution of operations. of business projects
the IT strategic to ensure alignment
plan such as Under the management with Ferguson's
inadequate leadership, of the Chief strategic framework.
poor allocation/ Information Officer,
management of the Group has Management continues
resources and/or continued to to execute a
poor execution make substantive rolling three-year
of the organizational progress in implementing roadmap of investments
change of management its technology in processes,
necessary to strategy and resources and
adopt and apply roadmap, including technical defenses
new business progressing significant necessary to
processes. upgrades to its continuously
enterprise-wide address emerging
Operational risks resource planning cybersecurity
include business systems and other threats, and
disruption resulting enterprise-wide is extending
from system failures, IT resources. enhancements
fraud or criminal to the Group's
activity. This IT General Controls control environment
includes security continue to be to other parts
threats and/or independently of the Group's
failures in the tested by Internal systems (see
ability of the Audit and findings page 80).
organization reported to the
to operate, recover Audit Committee. Group-level compliance
and restore operations processes and
after such disruptions. Briefings on insurance coverage,
While cyber security the status of including data
incidents encountered the Group's IT protection and
by the Group strategy, and cyber liability,
to date have its implementation are in place.
resulted in minimal have been regularly
impact, this provided to the Disaster recovery
risk continues Board, the Audit systems, secondary
to persist and Committee and data centers,
evolve, and was the Executive cloud redundancy
amplified by Committee throughout and resiliency
the increase the year. platforms, resources
in frequency and processes
and intensity Regular Board have been implemented
of cyberattacks update checkpoints to ensure business
since the emergence have been established critical systems
of COVID-19 and to provide monitoring are recoverable
the related transition and oversight in the event
to remote work of execution of a major disaster.
for many of our of the IT strategic Testing of critical
associates. plan. infrastructure
and application
systems is in
place and has
been consistently
executed across
the Group.
-------------------------- ---------------------------- ---------------------------
E. Health and safety
---------------------------------------------- ---------------------------------------------------------
Inherent risk Definition and Changes during Mitigation
level: Medium impact the year Health and safety
Trend: Lower The nature of The Group's strategic is a fundamental
Ferguson's operations plan remains value in our
can expose its focused on the organization.
associates, contractors, elimination and Our leaders have
customers, suppliers control of risks specific roles
and other individuals causing disabling to play and are
to health and injuries, improving required
safety risks. our safety culture to actively engage
and closing the with our associates
Certain products safety, health in ensuring a
that we sell and environmental healthier and
pose health and knowledge gap safer workplace.
safety risks. among our associates. Our performance
The hiring and is reported and
Health and safety deploying of discussed at
incidents can health and safety both the Executive
lead to loss professionals Committee and
of life or severe in the field Board meetings.
injuries. provides businesses
with technical The Group maintains
The Group continues resources to a health and
to closely monitor more effectively safety policy,
the impact of mitigate risk. with detailed
COVID-19 and Our efforts in minimum standards,
to take prudent these areas have and standard
steps to mitigate improved the operating procedures
any potential overall performance which sets out
impacts to the of the Group, requirements
health and safety notwithstanding for all businesses.
of our associates the impact of Branches are
or to the successful COVID-19; see audited against
operation of page 49 for more these standards
our business. information. and businesses
continue to implement
fundamental changes
to transform
our culture.
For more detail
see page 49.
We continue to
follow the COVID-19
guidance of the
World Health
Organization
and other governmental
health agencies,
including with
respect to travel
restrictions.
-------------------------- ---------------------------- ---------------------------
F. Regulations
---------------------------------------------- ---------------------------------------------------------
Inherent risk Definition and Changes during Mitigation
level: Medium impact the year The Group monitors
Trend: No change The Group's operations There has been the law across
are affected no major change its markets to
by various statutes, in the level ensure the effects
regulations and of regulation of changes are
standards in applying to the minimized and
the countries Group this year. the Group complies
and markets in Following the with all applicable
which it operates. adoption of the laws.
The amount of California Consumer
such regulation Privacy Act, The Group aligns
and the penalties the procedures company-wide
can vary. and controls policies and
implemented by procedures with
While the Group the relevant its key compliance
is not engaged businesses within requirements
in a highly regulated the Group to and monitors
industry, it ensure compliance their implementation.
is subject to were reviewed
the laws governing and improvement Briefings and
businesses generally, measures put awareness training
including laws in place. on key compliance
relating to competition, topics and requirements,
product safety, Awareness training including harassment
data protection, of the Group's and discrimination,
labor and employment Code of Conduct data privacy
practices, accounting was deployed and security
and tax standards, to all associates and gifts and
international during the year. entertainment
trade, fraud, The Code sets were undertaken.
bribery and corruption, out the Group's
land usage, the values and commitment
environment, to strict compliance
health and safety, with the various
transportation laws and regulations
and other matters. that apply wherever
the Group operates.
Violations of
certain laws Further information
and regulations on the Group's
may result in ethics and compliance
significant fines program can be
and penalties found on pages
and damage to 22 and 52.
the Group's reputation.
-------------------------- ---------------------------- ---------------------------
G. Talent management and retention
---------------------------------------------- ---------------------------------------------------------
Inherent risk Definition and Changes during Mitigation
level: Medium impact the year All of the Group's
Trend: No change As the Group There has been businesses have
develops new no material change established performance
business models in the level management and
and new ways of associate succession planning
of working, it turnover during procedures.
needs to develop the year. Reductions
suitable skillsets in force implemented Reward packages
within the organization. as part of the for associates
steps taken to are designed
Furthermore, manage our cost to attract and
as the Group base given the retain the
continues to uncertainty of best talent.
execute a number COVID-19 were
of strategic offset by lower A new robust
change programs, voluntary attrition. individual development
it is important planning process
that existing On May 26, 2020, for high-potential
skillsets and the Group announced successors from
talent are retained that Mike Powell, the talent review
and that associates the Group CFO, process is aligned
remain engaged had resigned with our organizational
through recognition, and had committed strategy.
training and to assisting
communication. with an orderly The Group continues
transition. The to invest in
Failure to do new Group CFO associate development
so could delay is Bill Brundage and engagement.
the execution and is based
of strategic at the Group's
change programs, Newport News,
result in a loss Virginia headquarters
of "corporate in the USA. For
memory" and reduce further information,
the Group's supply see pages 6,
of future leaders. 71 and 82.
Talent management
procedures were
reviewed during
the year (see
pages 20 and
21 for further
information).
Associate meetings
with our Employee
Engagement Director
of the Board
were held and
feedback was
reported back
to the Board.
-------------------------- ---------------------------- ---------------------------
Related Party Transactions
The Group purchases goods and services from a company which is
an indirect wholly owned subsidiary of a company whose chief
executive officer is also a Ferguson Non Executive Director. In the
year ended July 31, 2020, the Group purchased goods and services
totaling $18 million (2019: $7 million) from and owed $nil (2019:
$nil) to this company. The goods and services are purchased on an
arm's-length basis.
There are no other related party transactions requiring
disclosure under IAS 24 "Related Party Disclosures" in the years
ended July 31, 2020 and July 31, 2019 other than the compensation
of key management personnel which is set out in note 10.
2020 2019
Key management personnel compensation (including $m $m
Directors)
Salaries, bonuses and other short-term employee
benefits 16 13
----- -----
Post-employment benefits 1 1
----- -----
Share-based payments 8 11
----- -----
Total compensation 25 25
----- -----
Further details of Directors' remuneration and share options are
set out in the Remuneration Report on pages 81 to 108.
Directors' Responsibilities Statement
This statement is repeated here solely for the purpose of
complying with DTR 6.3.5. This statement relates to and is
extracted from the Annual Report 2020. It is not connected to the
extracted information presented in this announcement or the
preliminary results announcement released on September 29,
2020.
The Directors are responsible for preparing the Annual Report
and Accounts and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union and Article 4 of the IAS
Regulation and have elected to prepare the parent company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law), including FRS 102 "The Financial Reporting
Standard applicable in the UK and Republic of Ireland". Under
company law the Directors must not approve the accounts unless they
are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for
that period.
In preparing the parent company financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
In preparing the Group financial statements, International
Accounting Standard 1 requires that Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies (Jersey) Law
1991. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in Jersey governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors of Ferguson plc as at the date of this Annual
Report are as follows:
Geoff Drabble, Chairman
-----------------------------------------------------------
Kevin Murphy, Group Chief Executive
-----------------------------------------------------------
Mike Powell, Group Chief Financial Officer
-----------------------------------------------------------
Alan Murray, Senior Independent Director and Non Executive
Director
-----------------------------------------------------------
Tessa Bamford, Non Executive Director
-----------------------------------------------------------
Cathy Halligan, Non Executive Director
-----------------------------------------------------------
Tom Schmitt, Non Executive Director
-----------------------------------------------------------
Nadia Shouraboura, Non Executive Director
-----------------------------------------------------------
Jacky Simmonds, Non Executive Director
-----------------------------------------------------------
Each Director confirms that, to the best of their knowledge:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole;
-- the management report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face; and
-- the Annual Report and Accounts, taken as a whole, are fair,
balanced and understandable and provide the information necessary
for shareholders to assess the Group's position and performance,
business model and strategy.
For further information please contact
Graham Middlemiss
Group Company Secretary Tel: 0118 927 3800
About Ferguson plc
Ferguson plc is a value-added distributor of plumbing and
heating products to professional contractors principally operating
in North America and the UK. Ongoing revenue for the year ended
July 31, 2020 was $19.9 billion and ongoing trading profit was $1.7
billion. Ferguson plc is listed on the London Stock Exchange (LSE:
FERG) and is in the FTSE 100 index of listed companies. For more
information, please visit www.fergusonplc.com or follow us on
Twitter https://twitter.com/Ferguson_plc .
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END
ACSXBLFXBBLZFBV
(END) Dow Jones Newswires
October 30, 2020 10:00 ET (14:00 GMT)
Ferguson (LSE:FERG)
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Ferguson (LSE:FERG)
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