Reece has reported a 20 per cent fall in its first-half net profit, attributing the downturn to ongoing weakness in housing markets across Australia, New Zealand, and the United States. The plumbing and bathroom supplies network experienced dampened demand, impacting its overall financial performance. Reece is a leading distributor of plumbing, bathroom, and HVAC-R products, serving trade, commercial, and residential customers. The company operates extensively across Australia, New Zealand and the United States.
For the first half, Reece posted a net profit of $144 million, a decrease from $181 million in the corresponding period last year. Despite a 6 per cent increase in sales revenue to $4,648 million, earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 6 per cent to $448 million. The results reflect challenging conditions in key markets and increased operational costs.
In Australia and New Zealand, sales increased by 4 per cent to $2.06 billion, but earnings before interest and taxes (EBIT) decreased by 7 per cent. US sales rose by 6 per cent to $US1.69 billion ($2.4 billion); however, EBIT experienced a significant slump of 26 per cent. This decline was attributed to weaker residential new construction activity and higher depreciation expenses related to network expansion in the US market.
Looking ahead, Reece expressed caution regarding the pace of recovery and does not anticipate a significant shift in demand for the remainder of FY24. The company provided guidance for full-year EBIT of $520 million to $540 million. The board has declared a fully franked interim dividend of 5.44¢ per share for its shareholders.
