Reece (REH) H1 2025 earnings summary

Executive summary

• Group sales/revenue declined 3% to AUD 4.4 billion (or $4,402 million) amid challenging macroeconomic and housing market conditions in both ANZ and US.

• EBIT dropped 17% to AUD 305 million; NPAT fell 19% to AUD 181 million year-over-year.

• Ongoing investment in network expansion, digital innovation, and technology, with 32 new branches opened and two bolt-on acquisitions in ANZ.

• Interim dividend of 6.5 cents per share, fully franked, declared for the half-year.

• Leadership and board refresh, including new Group President/MD, US CEO, ANZ CEO, and succession planning.

Financial highlights

• EBITDA decreased 10% to AUD 475 million; EBIT margin and EBITDA margin compressed across both regions.

• Capex to sales ratio rose 38 bps to 2.9%.

• Net debt increased to AUD 646 million; net leverage ratio rose to 0.8x from 0.6x at FY24.

• Net operating cash inflow was AUD 256 million for the half, down from AUD 378 million in the prior year.

• EPS declined 19% to 28 cents; available liquidity at $1,177 million, down from $1,470 million at FY24.

Outlook and guidance

• Macro headwinds and soft trading conditions expected to persist in both ANZ and US, with subdued housing construction and volumes.

• Interest rates and affordability remain key challenges; recent rate cuts have yet to materially impact volumes.

• The Group remains committed to long-term investment and its 2030 vision despite near-term headwinds.