John Martin - Chief Executive Officer Mike Powell - Chief Financial Officer.

Olivia Peters - Berenberg Yves Bromehead - Exane Phil Roseberg - Bernstein Howard Seymour - Numis Aynsley Lammin - Canaccord Paul Checketts - Barclays Charlie Campbell - Liberum John Messenger - Redburn Clyde Lewis - Peel Hunt.

Good morning everybody and welcome to the Stock Exchange this morning. Thank for coming along to our Full Year 2017 Results Presentation. I’m really pleased this morning to welcome a new boy. Our new CFO, Mike Powell. Many of you know Mike from his previous roles, but it is great to see him now wearing Ferguson blue colors.

I should also mention an old boy. We have got our Chairman, Gareth Davis down here at the front, making sure that we stay on song today.

I am just going to summarize a couple of the highlights of the year, then hand over to Mike for the detail of the operating and financial review, and then I’ll close on strategy and how we are executing that strategy.

Firstly the highlights, from where we were six months ago, actually market conditions improved and commodity deflation eased in the second half. So we grew overall at 6% this year and that’s over 8% in the final quarter.

We were very pleased to make further progress on the gross margin, up 40 basis points and about half of that is underlying improvements. Trading profit well ahead 8.7% up on last year. We also delivered our best ever working capital results. We are very proud of that. On strategy, last year we started out with three objectives.

The most important of those being to achieve above market growth, stronger growth in the US. Our strategies seem to be working because the growth in all of our major business units improved and we grew across all regions in the US. In the UK the transformation is on track, but it does remain very early days.

In the Nordics, as you know we clarified the strategy and we also tidied up some of the other investments in the portfolio. We did some decent disposals during the year. The most significant development though in the business this year has really been on the people front.

The handovers both to Mike and also to Kevin Murphy towards the end of the year, they’ve been done really thoroughly and with the minimum of fuss. It is great to have such talented and experienced executives now in place to take the company forward for the next stage of our developments.

If you get the company’s name wrong today, we have a charity box, it is £10, it is nearly full already, and as you know now these are our last numbers in Sterling. We are making the change now to dollar reporting. That project is being pretty much done.

Finally, really strong cash flow and also disposal proceeds that’s provided us with the opportunity to do a 500 million share buyback program and Mike will start that shortly. Now, I hand over to you Mike for the operating and financial review..

Thanks John and good morning everybody. Clearly a pleasure to be here to do my first set of Ferguson plc results, and I’ve met a few of you already, clearly one or two more to meet and I look forward to doing that in due course. I think first of all, overall you can see 2017 has been a good year for Ferguson.

Total group revenue increased to £17,324 million and trading profit up to £1,122 million, a good result which we are very pleased with.

As John mentioned in his introduction, it has been a busy year and our actions have created quite a lot of noise, particularly for the accountants and the way we present the results to sales and so for the sell-sides here, hopefully this slide is a format that you will recognize for the total group numbers.

It is also consistent with most models that are out there and consistent with the consensus that is published on our group webpage.

However, that is not actually how we put the results together as accountants and I’m going to take you through how those changes impact the formats and then I’ll take you through the trading performance of our ongoing businesses as we move forward. So, firstly a picture to explain the accounts.

On the left hand side, you can see how we have reported the business previously, and then on the right hand side the three boxes is how we report today in our continuing and discontinued operations.

Our continuing is made up of ongoing that’s the businesses we’re going to take forward and that’s what I will mostly talk to you about today in terms of trading performance. Then we have the non-ongoing. These are the two small disposal transactions in the year being Endries and Tobler.

The results of these businesses are actually included in our statutory continuing results, up to the date of us completing those transactions, but I have pulled them out today to clearly help with modeling. Then on the far right hand side is our discontinued business.

This consists of the Nordics businesses and the French property assets that are held for disposal and as I say we will try to simplify as we walk through and clearly all comparators have been restated. So on to the financial highlights, this is the continuing ongoing box.

You can see here revenue at constant currency, up 8.6% for the year, driven mainly by good US markets and continued market outperformance. Gross margins increased 40 basis points which is a great result coming from both a better mix of our value products and services and also our improved procurement across the business.

And this combined with some operating cost investments has led us to an operating trading profit in the year of 1,032 million, up 8.7 at constant currency. Overall, the Group trading margin grew 10 basis points, headline earnings per share up 6.8% at constant currency reflecting that good trading profit growth.

Working capital well managed through the year continues to be generated - strong cash generation and after the proceeds from those two disposals of Endries and Tobler on net debt at the end of the year was £534 million.

We’ve increased the ordinary dividend 10% and also announced today a share buyback of £500 million which will complete over the next 12 months. In terms of our like-for-like growth, we continue to outperform our key markets due to our continued good work in our businesses as we develop our customer propositions.

Our growth in the year is supported by improving markets in the US and Canada. First half of the year, as you know, saw declining industrial markets and some commodity deflation. The second half improved on both counts slightly positive industrial markets and low levels of commodity inflation.

Overall, through the year therefore we had a particularly good last strong quarter. In terms of revenues and trading profits on the next slide on Slide 9, on the left-hand side you see the revenue and on the right-hand side the profit are now bridged from last year's numbers through to this year's numbers.

Taking the chart on the left first, on the revenue you see that 12,146 to the 14,878. First is the exchange bar of 1,550 million taking us up to the 13,696; and then after that you can see the constant currency growth over the next three bars representing the 8.6% that I’ve talked about. That’s compromised of three areas.

Like-for-like growth of 6%, which when you add on the net new branches of about 0.1 you get to the 6.1% organic growth. One more trading day in the year added 0.4 and acquisitions added 2.1%.

Moving to the right hand side, you see the profit effect of each of those bridging from the 827 to the 1,032, first bar as before is exchange of 122 million taking us to the 949 million. In the first half, you can see the flow through as you know was quite weak due to the commodity deflation and the industrial decline, second half has been better.

We saw good organic trading profit growth and good overall 41 million and that’s after of course we have made those further cost investments in our business as we look to continue to grow into the future. Additional trading day of nine and acquisitions added 33. Let me move now on to the markets and the regions individually.

First of all, the USA, US had a good year, represents about 90% of our trading profits. Revenue was strong, gross margin is good and grew well, mainly from the improved mix of products and services and the channels that we offer to our customer.

Our costs grew, as we made investments in technology marketing and fleet along with associated labor investments into our associates to maintain our high levels of service. Trading profit of 950 million, 189 million ahead of last year and growth at constant currency was £73 million. Trading margin decreased a touch, but still at 8%.

That growth was pretty broadly based across the US and across all our businesses. Here you can see all our businesses grew like-for-like. The blended branches, which is the map on the right-hand side, grew well in all regions and growth, good growth coming from performances in residential and commercial.

You can see growth in North and Central, and that reflects the improved performance from the recovering industrial markets in the second half.

Waterworks standalone business continues to outperform in a quite a tough market that’s broadly flat and B2C e-commerce growth has been supported by our technology investments and John will touch a little more on those later.

Those sharp-eyed amongst you as well will also note that we’ve changed our name from CMRO to Ferguson Facilities Supply, which is the name we actually trade for that business in the US.

Now, let’s look at those end markets, demand in residential markets was good, residential sales, which now represents approximately 50% of our business grew very well between 9% and 10% on an organic basis. Commercial market also good slowed a touch in the second half and we still grew very well in that market.

Several markets tougher, slighter negative, but we continue to be pleased with our performance here; and finally industrials, again the weak first half here broadly flat across the whole of the year.

First the US, onto the UK, overall the UK market still remains challenging, tough RMI market in the UK which is where we generate the majority of our revenues, pipe and climate, infrastructure, and our B2C business markets were slightly better in the year.

You can see that the UK business recorded our like-for-like growth in the year of 1% with growth in pipe and climate, infrastructure, and our soak.com businesses generally offsetting a decline in the Plumbing and Heating business.

Gross margins were solid, grew a touch and whilst operating costs were slightly higher, this did lead to an improved trading profit performance of some 2 million taking us up to 76 million improving the margin by 10 bips.

These results are clearly before 40 million of exceptional costs, which were in-line with those exceptional costs as the transformation progresses that was announced a year-ago. Good progress in Canada and Central Europe, Canadian and Dutch markets improved in the year with decent growth in most regions.

Revenue in Canada and Central Europe grew 3.6% on a like-for-like basis, margin is broadly flat, costs well controlled, which led to an 8 million improvement in sterling for these businesses six of which was foreign exchange, but still a good underlying improvement for Canada and Central Europe.

So as the continuing ongoing business is dealt with, on this slide, I touch on the non-ongoing and the discontinued, so the second and third box of that chart. On the top half is the non-ongoing. These are the two small disposals, they are non-repeat items and as I say, I pulled them out to aid with understanding.

Tobler in Switzerland was disposed off in April, which we now own 39.2% off and we’ve combined that business with Walter Meier and Endries was sold in June. The gains on these disposals are shown in our exceptional items, which I will come on too.

Nordics business has been classified as discontinued operations in-line with the accounting standards and as such has been shown separately in our statutory results. Additionally, within discontinued operations of the remaining French properties, which are being disposed off.

However, on Nordics trading performance whilst having had a first difficult half year the second half performance much better and we had good growth in the both revenues and trading profits. And in terms of the process for the Nordics, John will come back to in his slides.

Exceptional items, we made gains on the disposals of Tobler and Endries of 266 million, majority of which we received in cash and as part of the UK transformation we spent £40 million of exceptional costs about half of which was cash.

Financing and tax both came in as expected in the year, the increase in financing charges, mainly actually due to foreign exchange because most of the interest costs are in dollars as is the debt. And ongoing tax rate was 28% broadly in-line with advice.

So on to the cash performance, which continues to be very, very good driven by the underlying trading profit of our continuing businesses. We start at the top of this slide with continuing trading profit of the 1,059 that compromises the 1,032 of the ongoing business that I’ve talked about, and the 27 of the non-ongoing.

Than I’d back the depreciation and amortization for those businesses, you get to the EBITDA of the 1,199 that you can see on the third row down, and we’ve worked hard on working capital and that generates good cash flow from operations of 1,115 million.

Interest in tax, cash outflows were higher than the P&L, expense due to the timing of our tax payments, and the tax that we had to pay on the disposal of the Endries business. We’ve invested 256 million back into acquisitions, 178 million into capital expenditure.

The CapEx actually a touch lighter than we might have expected earlier in the year, that’s purely only timing of the projects and I’d expect that to pick up to normal levels in the current financial year 2018.

So after 267 million of proceeds from disposals and returning 259 million to shareholders via ordinary dividends we finished the year with £402 million reduction in our net debt. That all means that we finished the year in a good position.

Net debt-to-EBITDA of about half a ton, pension liability on an accounting basis has reduced to 21 million, principally due to funding contributions in the US and the UK, and the disposal of the Nordics business into discontinued.

Operating lease commitments have remained consisted with last year at 854 and as I have said, we increased the dividend 10%. So on to Slide 20, on capital allocation, you know we continue to generate good cash in our Ferguson business.

This business is highly cash generative and I have looked to the cash characteristics of the business in starting and I think it’s entirely appropriate to maintain the current net debt to EBITDA ratio of 1 to 2 for the business and will continue to maintain the same priorities for the use of cash.

I’ve reminded everybody of those uses of cash and the priorities in which we think of those as a business. We will invest in our organic growth. We have a progressive dividend policy, which aims to grow the dividend in-line with the long term underlying growth in earnings.

We will then use cash for investment in bolt-on M&A, which meet our investment criteria and then any surplus will get returned back to the shareholders on a reasonably prompt basis.

In terms of acquisitions in the year, we continue to target good businesses, please meet our investment acquisition criteria, add to our organic growth as we move forward. Nine acquisitions completed in the US in the air, a further five since the year-end. We completed two also in Canada and one in the Netherlands.

Total consideration you can see 292 million for the businesses with annualized trading profit of 32 million, and considerations consideration since the year-end of some £80 million. The acquisition pipeline is reasonable at the moment across a good range of businesses, mostly modest in size.

So looking forward, as John says, these are the final results in sterling, we will publish in US dollars from our Q1 release, and therefore all guidance on this slide and all guidance that we will give today will be in US dollars.

Going forward, we will also report the group on an organic - the sales revenue will report on an organic growth basis rather than on a like-for-like basis. Organic revenue growth includes the impact of branch openings and closures and actually aligns to how we report the business internally.

It is actually how we run the business internally, and the impact of the measure between the two is very small. This year was 0.1 and overall years that I have gone back and looked at, it is much less than 1% in any territory. So a much more relevant measure for us as we move forward.

You will be pleased to know there is no trading day’s impact across the year or even in any quarters, so we won't be talking about difference in trading days during this financial year. We would expect an additional 10 million of trading profit from the acquisitions I have talked about, but have already been completed and so far in FY 2018.

Exceptional costs $65 million that’s the remainder of the UK transformation spend again entirely consistent with previous guidance, it’s the balance of it. And I would expect the effective tax rate to stay at approximately 28%.

Capital investments will pick up slightly and you can see the guidance there from this year and working capital, no change to our normal guidance, which consumes about 12% to 13% of the incremental revenue. And that’s it.

So, I walked through the continuing ongoing business, which are the businesses staying with us, touched on a bips that we’ve disposed of during the year, and the bips that we will dispose of in the coming 12 months. Good set of results for FY 2017. I’m really pleased with the momentum that we’ve got coming into this current financial year.

I think with that, I’ll hand back to you John..

Thank you very much indeed, Mike. This time last year we had three key priorities. After the slowdown in industrial markets in commodity deflation in 2016 we were very focused on getting Ferguson back to making really good growth above market growth rates. That was and remains our primary focus. And our team has done a really great job.

They’ve continued to focus on gaining market share profitably. Really by doing three things; one is fulfilling our customer wants; second, pursuing attractive opportunities both for organic growth and also for filling acquisitions; and thirdly, executing our plans both thoroughly and quickly. I want to touch on each of these now in turn.

Firstly, what do we mean by fulfilling customers wants? Well our customers are not usually just doing a simple transaction. They are building, they are renovating, they are developing, they are installing projects and their wants are more complex.

Excellent availability, quick and reliable delivery, account based credit, large and convenient branch network, all those are give-ins, but our customer expectations just go way beyond those give-ins. Even if you look at sales channels, most of our large customers they chose to interrupt with us in a number of ways.

We visit them in their work sites and they are often deep and very enjoying relationships between our customers and inside and outside sales associates. Some interactions of our call centers. Over the counter, online, or by mobile device. So, we want to talk today, a little bit about how we fulfill customer wants.

How we provide them with best-in-class customer service as confirmed by our very strong net promoter scores. So we are going to take a few examples here from the chart. Firstly, bidding for business. We have 5,200 inside and outside sales associates. It’s their job to really understand our customers’ needs and wants.

It’s their job to identify the most appropriate products to source them and to price them. We help our customers win work, when they are successful we are too, and that accounts for over $7 billion of our sales. Our price is a project specific. We work with our customers to help them to save money.

We identify products that are missing from technical drawings. We advise them on alternative products that are available. And some bids can run to hundreds and hundreds of products.

Where products are not stopped or difficult to get hold off, we identify the best source of those products, we negotiate prices, we arrange delivery, and we bring them either into our branch or into our distribution centre to be collected with the rest of that order. $1.5 billion of our revenue is earned in this way.

If our customer doesn't win in order then nor do we and that provides really great motivation for us to work very hard with our customers to find solutions for them. Now often our customers want solutions, which are specifically tailored for them to help them to become more efficient. We assemble Kits, you can see some of them here on the chart.

We assemble Kits containing all of the products, the fixtures, the fittings that are needed to carry out to specific installation without waste. We have subassembly sites, which prepare modular heating and plumbing solutions for either multi-residential or commercial properties.

More than 150 of our branches provide 24-hour emergency support for the replacement of commercial water heaters. We deliver those water heaters with all of the required fittings, anything that’s needed to fit that water heater, and we arrange for the removal of the broken equipments. That revenue stream alone is worth $200 million a year.

Our fire suppression of Waterworks businesses, they provide more than $300 million of fabrication services most of those are pretty automated. They also provide job specifically labeling and instructions for ease of installation. We just touch on showrooms. We then talk about showrooms very often, we have 270 showrooms.

They are not cash-and-carry stores. They are an opportunity for our customers to experience the dedicated service of 900 highly trained showroom consultants, and also to touch and feel, to experience quality kitchen, bathroom, and lighting fixtures.

Our consultants visit our customer’s homes, they help them come up with the designs that our customers love. And following that consultation, the customer receives a detailed color brochure, including photographs and the price and specification of each selected product.

After the design is finalized, we source any non-stock items, we hold that inventory until it’s needed and we arrange two-person delivery to the appropriate room and we arrange installation.

Throughout that project the consultant stays in touch with plumbers with heating engineers, with joiners, with electricians, with whatever trades to coordinate those deliveries and make sure that installation is done properly and then any problems are resolved quickly. What about pricing? All of our customers want great value.

And we aim to be competitive with all of our pricing. Some customers are particularly price sensitive, either all or some of the time. But we leverage our buying power on behalf of our customers. We leverage our DC and branch infrastructure on behalf of our customers to lower logistics costs.

And we help customers to select the appropriate sales channel for their needs. If they don't want expensive sales account management that’s fine. We also select the most appropriate and cost-effective distribution channel. So, if a customer doesn't want or need to use the accounting channel we can deliver product directly.

We expect to have the best cost ratios in our industry. That will help us keep our pricing competitive and make a fair return. On delivery, we have an incomparable range of options.

Some customers want to pick up their supplies directly from the branch really relying there on the breadth of our range and the excellent availability to fulfill their needs with a minimum of fuss. They may also want to get advice on alternative products, on technical matters, on compatibility between products.

If a customer is particularly time sensitive, they can phone in an order or place it online and use our will call service. Then they can pick up that order within one hour. We did over $500 million of sales that way this year. Nearly 6 billion of sales are delivered either same day or on the next day, whatever the customer wants.

Other orders are delivered at a later date as the customer needs them. Many orders specify multiple delivery dates and also multiple delivery locations. And we have a tag and hold service that gives 100% peace of mind regarding product availability.

Larger items as you can see, larger items from the bottom left here on the chart, they need specific handling equipment such as the crane trophy, you see on the chart. And over 90% of all our sales are on accounts.

I hope now to give some flavor of some of the value that we add to our customers in addition to the broadest selection and the best availability and our industry. Now let’s move on to an example of some of our regional growth opportunities. Our home market of the US is very large and still quite fragmented.

We talked before about the opportunities for substantial growth in markets like Chicago and New York where we’ve been traditionally underrepresented. New England is another great example, we went here with the board in July. We have the infrastructure to address these markets and to serve our customers very well.

Our New England branches are replenished from the distribution centre that we built a couple of years ago in New York State. Our development plans here include ambitious organic growth targets combined with acquisitions. In this instance, we used an acquisition in 2005 to build local credentials and really get a kick start to that growth.

That was a small showroom business. Okay, last year we acquired Redlon & Johnson, which was a specialist in hydraulics, and earlier this year we bought PV Sullivan, which is a specialist in commercial piping.

Now we have got an impressive 9% market share in the region, but a huge opportunity here to grow both in our core plumbing and heating market, but also in Waterworks, in industrial land and in fire protection. Effective execution of these strategies is absolutely key to delivering profitable growth. We continue here. We picked on a couple of examples.

One is in our e-commerce and customer facing technology. We are continuing to develop these execution capabilities to make sure that we can service our customers better and also to lower our own cost to serve.

This increasingly focuses on technology providing better functionality and better opportunities to integrate with us and to simplify the ways the customers can do business with us on various advices, on various devices I should say and also across various operating systems.

Mobile features allow customers to check product availability at a local store or a DC to view product images, specification sheets, and installation guides. Customers - now we can turn a quote into an order and quickly place that order for delivery or pickup of the local Ferguson account.

Customers can review purchase history and create lists of products they buy more frequently. They can check order status. They can view proof of delivery details. And check the account all on mobile. Customers can scan barcodes on mobile; upload them onto Ferguson online to create an order or a list.

We can arrange for customers specifically to access our online stores from their own procurement systems. That gives them a personalized storefront to search for products and create a shopping cart. Check out and then go through their own internal approval process creates a sales order in our operating system.

We have a number of tools to help customers manage inventory. Barcode scanners, vending machines, product catalogues, and other customized tools. These can help reduce shrinkage and help the customer control operating costs.

And those inventory management services they are built around the customer's business processes, so they can minimize replenishment times and increase their productivity. Overall, e-commerce revenues last year were $3.3 billion and they were $18.5 million customer self service events. $1.1 billion of e-commerce revenues were owned in our B2C business.

That was 34% ahead of the year before, including the acquisition of signature at the start of the year.

In this year, we launched mobile apps in the B2C business, allowing customers to communicate with sales associates directly, introducing new planning tools to enable them to organize their projects, and manage their communication with their contractors.

About half of B2C sales are made whilst the customer is talking online with somebody in our call centre. Ferguson’s strong culture of gross margin expansion is partly due to developments of our own brand products. These now represent 7% of sales, but a significantly higher proportion of gross profit.

We have to work hard by the way for that additional gross margin. On those products we have to allocate resources to specification to design, to sourcing, through quality assurance to import management's sales and warranty support for our own branches. We also have to hold additional inventory.

But our own brand products, these provide us with a source of differentiation. We are selling quality products at competitive prices, which are not available anywhere else. In addition to own brand, many of our vendors give us products to sell on an exclusive basis or undersell distributor arrangements.

Those are usually accompanied by very high levels of marketing and after sale support from us. So, we believe we have plenty of reasons to be optimistic that we will carry on growing faster than the market as we have done over several years that you can see very well from the chart.

The second of our key priorities is to execute the transformation plan for the UK, which we set out last year.

The backdrop for the transformation project has been a pretty stagnant heating market in the UK, but despite branch closures growth was stable, and gross margin is a bit better actually then last year, partly due to product inflation in the early part of the year.

Trading profit was slightly ahead with the infrastructure pipe and climate and soak.com, our B2C business performing more strongly, offset though by continued weakness in the heating market in particular where market conditions remain very competitive. Just a reminder, some of the key components of the transformation plan.

The new customer proposition that’s based around two branch formats, large destination branches, staffed by product specialists, and stocking a very wide range of products across all major categories. Most of these branches will also do all outbound deliveries on behalf of the smaller local branches.

The smaller local branches they have now a range of specialist products providing customers with a local service. We make good progress in the year. We closed 33 lower return branches and there are about another 32, which will be closed this year.

We will also fit out this year 25 more of those destination branches and continue with the local branch refurbishment program.

The UK transformation includes the redesign of our supply chain and we have recently completed both the outsourcing of branch replenishment logistics and now we’re moving these to in-nights that will enable orders to be picked and dispatched, as soon as the branch opens the following morning giving a significant service improvement.

The consolidation of outbound deliveries to larger destination branches that’s underway later in the transformation project, we will reduce our distribution centre capacity. These projects they will improve our customer proposition and they will realign our cost base to make sure that we can focus our resources on valuable customer services.

We also aim to have the best-in-class e-commerce platforms to serve both trade and retail customers and we have made excellent progress on this actually during the year. We drove up e-business sales 40%, self service events up 60%, mobile sales up 150%.

We are launching a new website at the moment and there is new functionality coming this year, including live chat facilities to enable us to provide product advice in that way, quotation facility electronic proof-of- delivery, prompts to identify products that our customers prefer, and the benefits calculated.

The adoption of e-commerce by our larger installers is very encouraging. They are in search of the most efficient and well controlled way for them to execute their business. And then our third priority, I wish to address the strategy in the Nordics. The strategy was finished in the first half and is now being implemented.

One element of that strategy was a turnaround of Finland. And that has been done really well, really strong recovery there in profitability. The branches status has been rationalized, closing poor branches enabling our teams to reallocate resources where we are most likely to win.

Similarly, we sold our small DIY business in Denmark in August, that’s allowing the team now to focus exclusively on the buildings building materials business.

Secondly, trading momentum has been positive in the second half with good growth, maintenance of gross margins, and improved cost control to deliver strong trading profit growth in the second half of the year.

Thirdly, the team has been working very hard on the vendor due diligence and all the other stuff that needs to be done to get the business ready for sale. The auction is underway and we expect to agree a transaction now in the coming months.

Overall, I am very proud of the team in the Nordics for the substantial progress that we’ve made in the year and I’m sure that will be reflected in the value that you receive for the business. Finally, we will touch on the state of the markets. In the US, demand across both residential and commercial markets is good and industrial markets recovered.

The commodity deflation that we saw last year has really subsided. The Canadian market also recovered with good conditions across most provinces. In the UK however, the heating market remains weak.

Since year-end in August and September like-for-like growth has been about 6%, and our order books have continued to grow, we certainly expect to make more progress this financial year. That’s all from Mike and I at the moment. So thank you very much for that now. We will take any questions that you have..

Good morning. I have got two-and-a-half questions.

So the first one is just on US operating leverage, I think it sort of returned a little bit above 10% in the fourth quarter, I just want to get to your kind of view as we go into FY 2018, what the underlying level there should be given what you are seeing on top line and cost I guess? The second question is on Nordics, can you just remind us the DIY business, is that kind of 10% of the company of the Nordics sold already? Are you disclosing how much you got for that and then is there anything else we need to think about, I think you've transferred some pension assets and a little bit of debt into that.

So just so we, anything you want to flag as we kind of frame our expectations for a potential disposals price? Thank you..

Okay, let me take the first one, which I think is the question about the US flow through in Q4 being good, you can do the math it was over 10%, we feel good about that. I think I would say, I mean just to backup from the question a touch and I wouldn't judge us on a quarter, I mean clearly quarter reporting sort of forces us down that route.

We don't actually run the business quarter-on-quarter, you should be delighted to know, I think also we’re not embarrassed to invest in costs where it is appropriate to grow the business. So, hence I will say quarter-on-quarter isn’t actually everything.

I think the long-term guidance, the group has always given and absolutely we stand by is that our flow through should be low double-digit, there is no change to that. We guided in 2017 that we wouldn't be at that, but we did exit well. So, as I said, we feel good about that.

In terms of 2018, how do we think about that, I think you will still see us invest in costs, I mean the US for the whole year was about 6.5% flow-through, it will be somewhat better than that, but we will still invest in costs in the US.

We will invest in our e-commerce platforms some marketing, our operating model, and some of the issues John has just indeed covered are important for us to invest and to create that future growth. So, whilst I wouldn't expect it to be at the 6.5 for this year, I also wouldn't expect it to be back at the long-term guidance, but for the right reasons..

On your second question, Silvan we didn’t disclose the consideration, but it is nominal. It was a fairly modestly profitable business, let’s put it that way.

Regarding the rest of the assets and liabilities that will be disposed with the Nordics business we will go with all of the assets and liabilities it needs to operate, which it’s been using, the only exception being some surplus properties, which we have separated.

For example, those included in the Silvan business, so we will retain those and dispose those separately..

Good morning. It's Olivia Peters from Berenberg. I just have two questions, please. Firstly, your acquisition run rate has been higher as it has been in the past. It looks like you've already been busy this year.

And I was wondering whether you could provide some guidance on the size of the pipeline, particularly in the context of the Nordics disposal? And secondly, you've obviously gone some way to dispel some of the concerns around the competitive environment of the U.S.

I was wondering if you have seen any particular change to that environment with the entry of Amazon into the B2B space. Thank you..

Thanks to your questions again. Let me take the first one on acquisitions. We use a lovely British word, do we have a reasonable pipeline, what does that mean, it means that we continue to be active in all areas. I think you know one never knows when acquisitions can be completed because clearly value is an important part to us.

I think importantly, we are looking at whole range of acquisitions. I think the days of us building long relationships with plumbers and buying plumbing businesses with branches whilst not gone are certainly less, and therefore our ability to look at other types of businesses and platforms and capabilities become increasingly important to us.

It’s therefore quite difficult to guide and we always generally say, we tend to think of $200 to $300 and that’s probably going to be wrong, but if you want to think of that number, but they do come along [London buses] [ph] unfortunately. We are capable of coping with that. We have a strong balance sheet.

I think at the end of your question you also mentioned in the in relation to the Nordics. I mean again just to go back to how we think about it and that capital structure and the order of how we think of capital, the Nordics has no impact in terms of the order of that slide.

We will invest our money into organic progressive dividends and then M&A and then any surplus cash goes back. So, I think we are - we have a strong balance sheet and we’re capable of doing all of those items and as you have seen today we have some surplus cash and therefore we’re repatriating that in the form of the buyback..

Olivia, thank you for the second question. I think there are a number of parts to that. The first thing is, if you separate out the B2C business build.com and other online businesses those markets remain very competitive. I mean, our key competitors in those markets are huge, Lowe's, Home Depot, Wayfair, Amazon, us.

And the competition is just constant, and I don't think that’s going to change. And we have done well on that. We have generated good growth, we have pretty much - the margins in the business are good.

Again, with some of the similar strategies have seen us adopting around the rest of the Ferguson business as well, we leverage our network very well, we're very good on our own label. So we’ve executed that business well, but it is a very, the B2C space is very competitive today and will remain so.

I think in the sort of, if I can call it the core business, the core Ferguson business, there is no clear change today. We’ve continued to take market share and we are continuing to serve the customer very well. However, we do take the competitive landscape and any changes in that very, very seriously to see will those have an impact on us.

And also to see well what’s happening with the other competition in the marketplace. Fine, we might be taking share, but there is somebody else in the space also taking share simultaneously.

So, we need to be very cognizant to that and to have our strategies to make sure that we don't lose out to nothings and that’s part of what we were talking about today. But there are plenty of little things as well that we are doing. So, we haven't seen any impact as you can see on the business so far but we do take that very seriously. Okay..

Good morning. Yves Bromehead from Exane. Just a few questions.

The first one, if we look at what happened in the UK plumbing and heating online markets, which has clearly been a major disruptor for the majors, how should we think about the US? Are there any structural reasons why the US can go like the UK? My second question would be on capital allocation again, could you maybe specify, which areas of growth are you seeing and will you still continue to maybe do some bolt-on acquisitions in the MRO industry? And finally, one of your competitors has switched to a fixed pricing model in the US, do you have any interest to do so and if not could you also talk more about why this wouldn't work for Ferguson? Thank you..

Sure. Great questions. Thank you. On the move online in the US we absolutely - we want to be absolutely in the forefront of that. We want the best technology in the industry, customer facing and the back office technology as well to make sure that we are at the forefront of that.

Because some of the stuff that we talked about today about customer wants, yes that is fine, we still need to make sure that we integrate well with our customers wherever we can. We provide them great solutions and a lot of those will be technical solutions. So, I think we absolutely want to be on the front of that.

I would say in the UK, if you look compared to, whether the people in the core merchandising space we’ve got excellence online, both B2C and B2B excellence offerings. And I don't think the UK market has gone as far as it will do in that area that will be - we're still converting a lot of customers to online.

One of the things I would say though, the large majority of our customers who are using the online channel are also using a number of other channels. If you look, almost all the customers that are big online are also using counter, they are also using inside outside sales and sometimes even call centre as well.

So when you see the revenue breakdown from those customers, I don't think online fulfils all of their wants or is going to in the very near term fulfill all of their want tomorrow. Does that make sense? I think to the second question on facilities supply and acquisitions, we did a couple of acquisitions.

As you know, this is a very new business for us. We are only sort of two or three years in. We are about $500 million run rate now. The margins are okay, but I think we could do better and we spent last year making sure that we embedded both the sales force and the final mile logistics. We got that right for the business.

I think there is another year of doing that. Did we look at any of the larger M&A that was happening? Yes, we did, but we didn’t feel that we could bring sufficient or generate sufficient synergies from those transactions. So, we passed on other transactions that you’ve heard that were in the market last year. And that’s absolutely fine.

So, I think in the short-term our team will stay very focused on making sure organically we will grow our business that is, the looks and feels like to Ferguson business with good margins, good net profitability, as well, and if some acquisitions come along then fine, but I don't want those to put off - to deflect our team.

Regarding - your point about fixed price is very interesting. We do a lot of work, we have done a lot of work some time to make sure that we are disciplined and structured in our pricing for our customers.

I still feel that if you have got a huge, I can certainly think of one at the moment we're working on quite a large sports facility, and those customers are going to want a different price for that project because it is a huge project.

If a project is a thousand times the size of somebody presenting at the counter, they are just going to want a different prices, totally different. So, I don't think a single price fitting all of our customers is likely, but I do think it has got good legs at the, every day end of time. We are experimenting with some of those structures.

At the moment, we have certainly got one business, actually it’s an acquisition where the proposition is a much more fixed-price proposition. Does that make sense? Thank you..

Hi Phil Roseberg from Bernstein.

Just a couple of questions please, could you tell us a little bit more about how the MRO business, sorry facility supply business is developing please, you gave us a number but how fast is it growing, is it really penetration or is it growth of the underlying market? And perhaps you could just talk a little bit about where that’s going and where the industrial's business is going.

My second question is, on your trading, August - July and August you are saying that organic growth is about 6%, whereas we have seen more like 7% or 8% on the like for likes now maybe there is a different between organic and like-for-like there in the second half of 2017.

So what would explain that slight deceleration in the run rate?.

Well, I will take the first one, you can take the second one. Look on the facilities supply, like I said we have been trying to establish the business that’s very important for us.

We don't want, I know some people have a different approach which is let’s go [indiscernible] for the top line and we will tidy up afterwards on margin and all those types of things. This is not the way we set out to do it, wanted to do it, or do want to do it. It is very deliberate.

We want to generate a really nice small business and grow it faster than the market that becomes a really nice big business. Does that make sense? That’s our strategy and that’s really what we spent some time doing. But be clear, the only reason for growing that business is - and for entering that space as we did two or three years ago.

Firstly, we think we can be very good in this space. Okay. We think we got something very valuable to offer our customers. Second is, we must be able to grow that business faster than the market.

That’s the purpose of it, and also we must be able to generate the appropriate returns, and as you have seen a lot of people in that space have really very strong returns on sales, and I wouldn't want for us to be the player that was just going on a primarily cost driven strategy. We need to go into that market on a service driven strategy.

That was the whole sort of premise of what we are doing, but it remains pretty early days. We are positive about it today, but we don't really know how big it could be for us. Okay..

Yes thanks. Question was about the organic growth rates. I mean just a touch on organics, again I know when companies change measures there is always a natural tendency of humans to be deeply suspicious and the numbers are very close. [Indiscernible] And the 6% growth is within 0.1%, so even in the first quarter and same for last year.

The real reason is if you think of what we do as businesses now and how the businesses change, we open, in a town we might open a branch we might close two, we might put them together, we might expand the square footage, we might move some of the business to e-commerce.

We were actually starting to split the day tracks actually just to get to like-for-like. We don't run the business like that.

So, actually given that the two measures are very close and we were splitting data for an external purpose and not using internally, it just didn't make sense it’s just not how we run the business, but they are very close is the point. Okay.

So 6% is representative, why is it different from the exit rates? In terms of the math, I mean, I think firstly 6% is a good number, so again we shouldn't be too embarrassed with the 6% number.

There is two major factors, and first we have had some weather in the US, which John may want to expand on and secondly actually the comps are much tougher this year than last year. So, actually both of those factors get’s us to about a 6% number, which is good. After that there is very little that is noteworthy.

I think importantly sentiment, we still feel pretty good about it..

And if you want to touch on the weather portion..

Yes on the weather, we think the weather caused us $30 million, $40 million in lost sales. So it is about 1% of that growth. August and September. Okay.

So it’s deflated, the 6%, you know the 6% would probably have been near a 7% had it not been for about $30 million or $40 million of lost sales, but you know just whilst we were on the weather you know we have historically tried to avoid to talk about whether, it has been pretty lousy this year.

And the most important thing is, we had 1,600 of our associates that were affected by this, and it is heartbreaking, you know some of them have suffered terrible damage to their homes. I am very proud though of the way the team reacts to this, the way we react to people and communities.

We took a lot of equipment down, we took a lot of generators down, particularly into Texas, first off. A lot of generators, a lot of pumps, we shipped massive pallets of water, and we made our facilities available both to the emergency authorities and also in some instances to the local communities, so people could take shelter into them.

So I am very proud of the way the team responded to the Hurricanes. I do think it’s testament to our business that you know we started talking about well even though we have had two of the biggest hurricanes ever in US history, we started with - has impacted sales by 1%. Great and that is because we are very wide spread around the country.

It is also because our teams absolutely work hard. You know we had 140 sites that were impacted. They were all, I think we got pretty much everyone outside of Puerto Rico, but with power by the end of last week, but some of them been without power for quite a long time and we carry on.

We carry on working, we find ways to get us to service our customers, and to get products out there to customers and that is a Testament to our team in the business..

Howard Seymour from Numis. I have got two, and then sort of longer-term question, both on the UK and first question is really how you see the pricing environment going forward because obviously last year the effects was a big and dramatic factor and everybody seems to push you through, but you do allude to competitive markets.

There is always commodity price inflation going through.

So there’s quite a lot of moving parts there, and obviously that could impact gross margin, so thoughts on that first? And then second, ex-P&H, obviously there rest of the business is doing well, just your thoughts on those businesses going forward whether they have businesses you would look to expand maybe not short-term, but medium term as a result of the success that you are seeing there? Finally question is just actually on divisional, in the UK, sorry so the ex-P&H businesses in the UK that you allude to, they are actually doing well and P&H obviously you alluded to the transformation going on.

Final question is on really I suppose the US.

The US, bigger part, becoming a bigger part, you do give us a revenue breakdown obviously on the different businesses, but do we stalk into a point where, as a one line, it’s worth expanding more, and giving us more in terms of those as potential divisions, given that that's how you're in the business, as I said that is more a medium term question perhaps? Thank you..

No you are right on pricing last year Howard. We - because of essentially the sell-through of inventory that you have already bought we did get a flip on the gross margin in the UK last year, and that might account for most of the gross margin improvement that we had last year.

So, I would be quietly cautions about UK margins this year, but team-wise it’s for us to go out there, sell our value and protect our margins. That’s part of our job and that’s what we absolutely have to do.

Regarding acquisitions in the UK, we are very clear over the last sort of 12 months, 18 months, we want the team really to stick to the knitting of executing the transformation that is very important. I think therefore any acquisitions are likely to be capability.

If there was something that would help us along the way, capability acquisition, they tend to be quite small. I can't quite think of one, but so I wouldn't say no, but neither should shareholders expect us to be deploying a lot of capital into the UK..

[Indiscernible].

Well I think we have already got a very broad branch network. So, I certainly wouldn't see us putting down a lot more real estate. You know we are taking, we’re contracting the branch network.

Now it is changing in size and shape somewhat because of the move some of these destination branches, but I think we have got a ghost, we have got a ghost in the works, come on, Mark, come up and do something with that thing.

So, I wouldn't say a lot more real estate, but could be invested in other sort of lines of inventory? Yes, that’s quite possible. We should be looking at doing that anyway, you have to constantly be looking at have we got the right range. Okay. And in the US, the short answer to your question is, yes. Mike will get on with it.

He didn’t move his lips when you said that Mike..

Thanks. Aynsley Lammin from Canaccord. Just two, on the US please.

Firstly, you mentioned that price inflation is coming back in the US, just wondered what your expectations are for FY 2018 is it 1%, 2%, and are you confident of passing on into the market? And then secondly you have obviously set out today your company, you could continue to grow above the market in the US.

Just wondered if you change your thoughts or what your comfort zone in the margin, gross margin upside over the medium term in the US, is that getting a bit trickier or are you still seeing some good upside there?.

Okay. The short answer to the first question is, we think it will be about 1%, 0% to 1% of near 1%, and yes we do think we can continue to pass that through..

And the growth above the market, I mean we absolutely expect that is what our expectations are of our team to carry on growing above the market rate. That is a key indicator of health in our business, we absolutely need to continue doing that.

Gross margins over the medium term, you know we’ve had and there is the chart we put up before showing the progressions of gross margins over a long period of time, there are plenty of levers that we can still pull to get there, as you know, our gross margins are, I think in comparison with the likes of Grainger and HD Supply and Fastenal and all those types of people.

Our gross are reasonably modest. But I do think we need to keep selling our value. We do need to keep finding ways, we need to keep finding the channels that the customer wants to use, and pursuing that, and also pursuing the own label opportunity. I think we will put more resources behind own label now going forward.

So, I would certainly want to see continued discipline on the gross margin side and what does that mean, it means defending and incrementally growing that’s the words we have used for years and that's words I would like to carry on using..

Good morning. It’s Paul Checketts for Barclays. I have got three as well please. In terms of the outlook for the US John, you do the service of your customers, which I know gives you some forward visibility and you have the commercial order book.

Can you give us an update on those two data points please? The second question it relates to the Waterworks business and that’s been a market where you and your largest rival have been quite disciplined and delivered good returns over time.

It may be a bit early, but since the change in ownership has there been any change in competitive behavior? And then the last one Mike, on the cash side, net debt was $280 million below where our consensus was expecting, can you go in a bit of detail in terms of what drove that performance and whether or not there are only timing differences we should expect to unwind? Thanks..

Yes, I mean the outlook in the US from our customers it is remarkably consistent Paul.

Our customers when told still expect market growth in the 4% type area, if you look, and you plot the chart over many months, yes, but it is remarkable how consistent their expectations are and also we do sort of several different types Paul, one is what do their expect market growth to be and the other is just a straight, do they expect growth or contraction in the market.

The contraction in the market is only at a very low single digit and it remains like that. So our customers are certainly still expecting to get a decent growth in the US, and our order books, they are growing absolutely commensurate with the type of growth that we have mentioned in the outlook and Mike's mentioned today.

The order book is continuing to grow nicely. Waterworks, no change yet in the behavior of our competitors, newly renamed competitors in the Waterworks base. And of course if you look at the ownership, probably the ownership is, they were part owners anyway of the former business when it was in [indiscernible].

So I’m not sure that we would expect a lot. I think between ourselves and them we have both been very disciplined in this market for a considerable period of time. It is still very competitive and there are plenty of other players because those two largest players have still only caught 40% something of the market.

So it’s very still very competitive with plenty of other players locally. You can see, I think if you look at the discipline that we have applied this year if you look at Waterworks both for wastewater and clean water the put in place data is very weak in Waterworks.

I think our team has done a great job digging out some really good performance in that period..

And on the good cash performance there is no real timing issues, I mean again, just to put a little more flavor on it, we had a good working capital performance, and a little bit lower CapEx, those are the main differences to consensus.

I think we have already guided to the FY 2018 CapEx number, so whilst that was a little lighter due to timing, I think you never really have to catch those back up, they always sort of keep pushing to the right, and so again CapEx guidance was on the chart for 2018.

And in terms of the natural cycle, we are probably at the low point of the natural working capital cycle at over financial year end. That is not because of sort of year-end balance sheet trickery. We actually go into our winter months and tend to consume working capital now through to about the half year. That’s about 0.3 - 0.4 of a turn.

So if you take the half a turn net debt EBITDA, you add back the buyback and the cash flows from the business, and that working capital cycle. We’re probably operating somewhere in the middle of that one to two cycle as we pushed through the winter Northern Hemisphere months..

Thank you. It’s Charlie Campbell. I got two questions please.

The first question is on the buyback and whether that includes anything for Nordics, whether that is entirely backward looking, whether you have already allowed for some receipts from that? And the second question is from the tax charge, if legislation was to come through in the US to reduce the US tax charge, would you change your arrangements to take advantage of that?.

John can answer that please. Now is the answer for the first question. I mean Nordics, we will deal with the Nordics as and when we get a deal agreed, and frankly when we get the cash in the bank the board will then convene and go through the normal process that have outlaid in terms of our capital structure.

That’s clearly going to take some time and whilst we believe we can get that deal, at least agree this calendar year, we will work till we have completed that process.

And again really just to reiterate, the buyback is surplus cash in our view that we don't have a need for either number 1, 2, 3 on that waterfall chart and therefore it’s surplus cash that needs to be repatriated, but completely independent of the Nordics. In terms of tax, fairly topical with Mr. Trump.

I think, you know the way we continue to monitor the tax environment, clearly as the legislation becomes a little clearer, have to say it hasn't and I mean there is lot of publicity in the last week. There was a nine page press release, which we pulled through, there is still very little detail actually in truth.

The two big leavers are the reduction in the headline rate, offset by, how he is going to fund it through either interest deductibility or other remains. How will those two inter play, clearly a reduction in the headline rate is good for us. How he funds it might be bad for us.

How the relationship of those two work will determine how we continue to look our tax arrangements, but no change at the moment, Switzerland has a good economic stable political base for us and is the right place for us to be..

Good morning. John from Redburn. I’m calling it three if I could.

First one is just, could you give us a bit of flavor on what happened in blended branches, thinking of the North Central performance, so that 3.8 plays a 6.6, I didn't bring the map from last year to think if it is a prior year comp issue, was it management change, was it just disruption around that business unit reconfiguration that you have been doing it in blended? So just have some flavor on that if I could please and whether that’s going to revert to the more normal picture in-line with the rest of the group this year.

If you would like to, a broad split of how those four regions split on sales, whether they are broadly 25 a peace would be useful as well.

Then just on guidance for the year ahead, can I understand for the year exposure is Netherlands headed about 15% of the Canada and Europe business just to understand the scale of your exposure we have got going forward? And on working capital, the guidance to 12 to 13, if we think about what you sold, Tobler plus Nodics were much lower working capital intensity businesses, you have obviously got the US, which is closer to a 17% working cap to sales number, getting down to 12% to 13% for the growth this year, is that actually quite a set of target you are setting yourselves in terms of what you're doing there? Finally, so it’s not three.

That 3.3 billion of e-commerce sales and 18.5 million service events, can I just check that if I walk away doing the math it is about $178 per transaction.

And if we split that between the B2C and the B2B does that make a huge difference to that number? Just to understand the scale of transaction size, because it looks quite low and obviously this 1.1 billion which is being B2C build.com, which I assume is typical toilet or bathtub at a $75 to $140, but just to understand what is the driver in there?.

Right. Let me try this. Blended in North Central was lowered because of the industrial sales that go through the - primarily because of the industrial sales that go through blended branches in that region, which really was quite a drag certainly sort of 6, 9, 12 months ago.

And we do feel positive now about the recovery, I feel very positive about the recovery. As I said, they were the team earlier in the year, at the time we - it was hard work. It was hard work. And, but they have stuck at it, dug in and I feel now that we are getting just deserts.

I certainly would expect growth rates to return to the mix, if that’s right John. And then sort of around the regions, look the two largest regions are West and East, North and South Central are slightly smaller, and we will follow-up with that to give you a sort of a clearer view.

Netherlands, I don't know what your percentage was, but it’s 200 and something million Euros of turnover. So working capital, you said working capital..

Yes, I think working capital, I think we are comfortable with the guidance of 12% to 13% as we move forward with the current shape of the business..

Okay. And then on the 3.3 billion, the 3.3 billion, the 18.5 million self service events are unconnected to do the 3.3 billion. Okay, so they are customers accessing their accounts, checking for proof of delivery, checking how they got the available credit, some of them settling their invoices that way and that type of thing.

So it’s just an indicator to us of every one of those self service events would otherwise have had to have been a telephone call or visit or some other way of interrupting that customer interacting with us.

So, we feel we do feel that those self service events, they both add value to the customer, because the customer is self-selecting due to that and they also add value to us because they lower our cost to serve..

Sorry.

Just coming back on another one, do you have feel in any metric as to what your average transaction or median transactions size is in the US, just when we are thinking about this whole world of B2B what may evolve [indiscernible]? In terms of what your typical transaction will [indiscernible]?.

Well the average order size is about $500, $600. I wish it was million dollars, made life a bit easier. It is about $500, $600 typically.

Though it does depend partly on how the order is built because if we have a very large project that order may just be typically, I don't know anything between 5 and 10 lines on the order, but from the larger orders for the bids and tenders there might be hundreds and hundreds of lines and you are just putting those through because this is the order, this is the call up for this day for example or for this site.

So, it can be a little bit misleading that John..

Thanks. It’s Clyde Lewis at Peel Hunt.

John, two if I may, one following on a little bit from sort of John's questions there and I suppose asking about the logistical side of things, I mean again with the number of transactions and more online, have you got the right sort of distribution centre network and to hand this sort of ongoing shift to sort of more online transactions or do you need to tweak that a little bit, obviously you have tweaked the UK, sort of overnight deliveries and outsourcing the transportation there, is that something you are starting to look at in the US at all? It was the first question.

Second question was on acquisitions, maybe it is just the mix of the businesses you bought, but they look to be very profitable, is that again just purely timing and the sort of businesses you’ve got or is that an indication again, you still want to very much by good businesses and you are not interested in turnaround situations at all, and again explain your thinking there of what’s happening on that acquisition sort of what process in terms of sort of geographical in terms of or sort of product mix or again some turnaround opportunities?.

Clyde thank you, it is a great question on the DC, the DC configuration. It is not just DC’s, it is how we do final mile deliveries from things like, you know I think some of you have been to the new ship hub in New Jersey, and also the configuration of branches. And the answer is yes, we are reviewing those.

Now we do constantly review because you're doing a review really by region because it’s such a huge geography that we are covering. So you need to look by region what is the most effective way of getting products to our customers without double handling products.

You want to handle it as little as possible and get it to customers as quickly as possible and as cheaply as possible. So our logistics head in Ferguson Enterprises absolutely all over that constantly and - but we are looking at that more. I think we said over time, we - you can't just sit there on a branch network.

It is one of the reasons why you know Mike was talking about organic growth being better than like-for-like, you will see it from our operating leases, we are not using lots more property than we were, but lots of people asked us six, seven, eight years ago, are you out of capacity? The reality is you want to use that real estate, you want to real estate to be as efficient as possible.

You want to use as little as you can, and get products through it as quickly as you can, handle it as little as you can. So, yes that’s a constant ongoing process, and I do think there will be changes in our configuration between distribution centers, shape-ups and some of those larger branches. I think there will be more changes in the years to come.

I don't think it will be one answer [indiscernible] let’s spend $100 million and this is the answer. I think it'll be more revolutionary because we have already been working.

Like the shape-up in New Jersey that was a consolidation of full site if you recall, and I think that’s when you’ve got that and you’ve got it working and it takes quite long time to get those things really efficient, you don't want to disrupt what is an effective supply chain, but in other places there will be opportunities, and certainly as leases come up as well in those types of things.

And on your requisition point, yes, I mean, we absolutely target good businesses.

I think as well over time you have seen us target fewer, if I does say Bricks and Mortar acquisitions, and more now capability type of acquisitions, does this give us something that we want, which is special in potentially it will be different from what we are doing that we can leverage throughout our network. Okay..

Are we timeout now, Mark. Look, if there are any more questions do call Mike and I or Mark afterwards or later on today. Thank you all very much indeed for coming along..

Thank you..