Reece (REH) H2 2025 earnings summary

Executive summary

• FY25 was one of the most challenging years, with group sales down 1% to $9 billion and earnings impacted by soft end markets in both regions.

• EBITDA declined 11% to $901 million, and EBIT fell 20% to $548 million, reflecting market challenges and increased competition.

• Earnings per share dropped 24% to 49c, with return on capital at 11.8%, down 365bps.

• The group continued to invest in people, innovation, and network expansion despite the tough environment.

• Total fully franked dividend for FY25 was 18.36c per share.

Financial highlights

• Group sales decreased 1% to $9 billion year-over-year.

• EBITDA dropped 11% to $901 million; EBIT down 20% to $548 million.

• Return on capital ratio declined 365 basis points to 11.8%.

• Net operating cash inflows were $600 million; Capex to sales ratio at 2.9%.

• Net debt increased to $590 million due to lower cash inflow and higher capital investment; net leverage ratio at 0.8x.

Outlook and guidance

• ANZ outlook remains uncertain, with a slow recovery anticipated and volumes expected to stay soft.

• U.S. housing market remains constrained, with recovery not expected for at least 12–18 months due to mortgage rates and affordability.

• No expectation for a near-term rebound in EBIT margins; structural changes and cost pressures persist.

• Strategy remains focused on long-term growth and investment in large markets with attractive fundamentals.

• July trading continued the weak trend from June, with EBIT still declining.