Reece (REH) H1 2026 earnings summary

Executive summary

• Sales revenue increased 6% to AUD 4.6 billion for HY26, driven by network expansion despite challenging housing markets in both regions.

• EBITDA declined 6% to AUD 448 million and EBIT fell 14% to AUD 262 million, reflecting higher costs from expansion and strategic investments.

• EPS dropped 19% year-over-year, with NPAT down 20% to AUD 144 million and return on capital ratio down 222 basis points to 10.8%.

• Interim dividend declared at AUD 0.0544 per share, fully franked.

• The period was marked by mixed performance, with some regions and segments showing resilience while others faced challenges from housing affordability and competitive pressures.

Financial highlights

• Group sales up 6% year-over-year to AUD 4.6 billion; like-for-like sales flat.

• EBITDA down 6% to AUD 448 million; EBIT down 14% to AUD 262 million.

• Net operating cash inflows of AUD 199 million for the half, down from AUD 256 million year-over-year.

• Free cash flow was AUD 142 million, compared to AUD 208 million in the previous period.

• Net debt increased to AUD 1 billion, mainly due to lower operating cash inflow and share buybacks; net leverage ratio at 1.5x.

Outlook and guidance

• Group EBIT for FY26 expected in the range of AUD 520 million to AUD 540 million.

• ANZ region shows early signs of housing market recovery, but recovery is geographically mixed and cautious due to interest rate rises and affordability challenges.

• US residential new construction remains weak, with no substantial change expected in the second half and ongoing affordability pressures.

• Management maintains a long-term view, focusing on building a resilient business and investing for future growth.

• Ongoing uncertainty in the US residential sector may impact future cash flows.