UK Corporate governance, going concern, viability, risk management, robust assessment, stress testing, Brexit and other principal risks

Ferguson plc – Annual report – 31 July 2018

Industry: distribution

Governance (extract)

Directors’ Report – other disclosures (extract)

Going concern statement

The Group’s principal objective when managing cash and debt is to safeguard the Group’s ability to continue as a going concern for the foreseeable future. The Group retains sufficient resources to remainin compliance with the financial covenant of its bank facilities with substantial headroom. The Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements. 

Strategic report (extract)

Principal risks and their management







Governance (extract)

Governance overview (extract)

Ensuring a clear and compelling strategy All

During the year, the Board regularly reviewed aspects of the strategy and how it was being implemented. In addition to receiving regular reports from management on progress made with our strategy, the Board visited our US business twice during the year. These visits enabled the Directors to enhance their understanding of Ferguson’s largest market, to meet customers, suppliers and associates and to see first-hand how our associates are going the extra mile to provide the best service proposition in our industry. Further details of the Board’s visits to the USA are provided on page 55.

The Board reviewed and approved a number of acquisition and capital investment opportunities along with the disposal of Stark Group and two capital returns. Further information on the acquisitions completed and the capital returns in the year are provided on pages 116 and 135 to 137.

Risk is an inherent part of any business and it is the role of the Board to determine the nature and extent of the principal risks it is willing to accept in achieving its strategic objectives and ensuring that sound risk management and internal control systems are maintained. The effectiveness of these systems is reviewed through the work of the Audit Committee described on pages 62 to 66. I can confirm that, during the year, the Board and its Committees carried out a robust assessment of the risks facing the business which included a review of environmental, social and governance risks as appropriate. The principal risks which the Board has focused on are set out in the Principal risks and their management section on pages 44 to 49.