Reece (REH) H2 2025 earnings summary

Executive summary

• FY25 was one of the most challenging years, with group sales down 1% to $9.0 billion and earnings impacted by soft end markets in both ANZ and US regions.

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

• EPS dropped 24% to 49 cents, with return on capital at 11.8%, down 365 basis points.

• The group continued to invest in people, innovation, network expansion, and completed three bolt-on acquisitions.

• Streamlining of corporate costs and operational efficiencies initiated, with benefits expected in FY26.

Financial highlights

• Group sales decreased 1% to $9.0 billion year-over-year.

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

• Net profit after tax down 24% to $317 million; EPS down 24% to 49 cents.

• Net operating cash inflows were $600 million, down from $751 million in FY24.

• Net debt increased to $590 million, with a net leverage ratio of 0.8x (up from 0.6x in FY24).

Outlook and guidance

• ANZ outlook remains uncertain, with soft volumes and slow recovery expected.

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

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

• Long-term fundamentals remain positive, driven by housing underbuild and population growth.

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