Reece Group shares tank after FY25 earnings warning
Make us a preferred source
Make us a preferred source on Google
More news: Plumbing supplier Reece Group was the worst performing ASX 200 company in morning trade after warning that it expects full-year earnings to decline year on year due to continued housing market softness in Australia, New Zealand and the US.
Reece shares were down 13.5% to $15.02 at 11:20am AEST, extending losses to more than 40% over the last 12 months.
Reece Group expects earnings decline amid soft housing market
The news: Plumbing supplier Reece Group said it expects full-year earnings to fall year on year, citing ongoing housing market softness in Australia, New Zealand and the US.
The numbers: Reece expects group earnings before interest and taxes to be between $548 million and $558 million, down from $681 million a year earlier.
The context: Chair and CEO Peter Wilson said the decline reflects a backdrop of "continuing macro-economic headwinds", with no improvement in trading conditions during the second half of fiscal 2025.
He noted that volume settings remain soft in Australia and New Zealand, and recent interest rate cuts have not yet translated to improved housing activity.
In the US, Reece's high exposure to the residential new construction sector continues to impact the company's performance, Wilson said. Housing units under construction remain down year on year, while high mortgage rates and housing affordability continues to weigh on the US residential market.
Reece also announced that Ross McEwan — non-executive director and lead independent director since October last year — will resign from the board, effective 30 June. McEwan said he wants to devote more time to his other role as chair of BHP's board.
