Reece Group leads ASX 200 losses as CEO accepts 'disappointing result'
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More news: Reece Group was the worst performer on the ASX in morning trade after the plumbing supplies company saw a 24% decline in full-year profit, with chair and CEO Peter Wilson labelling it a "disappointing result".
Reece shares were down 17.7% to $11.58 at 11am AEST, taking 12-month losses to 55.9%.
Reece Group profit slides 24% after 'turbulent year'
The news: Plumbing supplier Reece Group posted a 24% drop in full-year net profit to $317 million, as earnings fell year on year to within its downgraded guidance range, with chair and CEO Peter Wilson describing it as a "turbulent year" for the company.
The numbers: Net profit was lower than the $419.2 million posted in FY24 and the market consensus estimate of $325.4 million, according to Visible Alpha.
Reece’s earnings before interest and taxes (EBIT) came in at $548 million, down 20% year on year. At the end of June, Reece said it expected group EBIT to be between $548 million and $558 million, down from $681 million in FY24.
The company will pay total dividends of 18.35 cents per share, down 29% from 25.75 cents per share last year.
The context: Wilson said it was a "disappointing result" with full-year earnings impacted by soft end markets across its two regions of Australia and New Zealand, and the US.
The company expects a "slow recovery" in Australia and New Zealand, with a period of "soft activity still to play out". In the US, Reece expects the housing market to be "constrained for the next 12-18 months", driven by "persistently high mortgage rates and affordability challenges."
What they said: "Despite current headwinds, we remain confident in our long-term approach," said Wilson.
"We are well capitalised and will continue to look beyond the cycle to protect and grow the business. Reece operates in large, resilient markets where housing undersupply and population growth will drive demand for infrastructure across both our regions."
The source: ASX
