Reliance Worldwide shares drop on uncertain outlook
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More news: Shares in Reliance Worldwide took a heavy hit today after the plumbing supplies maker chose not to provide revenue or earnings guidance for the 2026 financial year, citing near-term economic uncertainty.
Shares were down 7% to $4.28 at 12:30pm AEST. The stock is down 14.7% since the turn of the year.
UBS analyst Nathan Reilly said Reliance shares have underperformed during the year to date due to tariff and US housing related uncertainty. The company's cautious outlook commentary today reflected the more subdued US housing and repair and remodel outlook, he noted.
Reliance said it expects first-half FY26 sales to be "broadly flat" to "down by low single digit percentage points", relative to the prior corresponding period. This compares to consensus forecasts of a 2% uplift year on year.
Reliance posts 13.5% rise in full-year profit to $193m
The news: Plumbing supplies manufacturer Reliance Worldwide achieved a 13.5% year-on-year increase in full-year profit, which came in at USD125 million ($192.5 million) amid the first 12 month contribution from Holman Industries, which was acquired in March 2024.
The numbers: The full-year profit result was greater than the USD110.1 million reported last year, but behind market estimates of USD136.1 million, according to Visible Alpha data.
EBITDA came in at USD269.8 million, 9% higher compared to the USD247.5 million reported in the previous year. Net sales rose 5.5% year on year to $1.3 billion.
The company also declared an unfranked final dividend of 2.5 US cents. This takes its final distribution is 5 US cents per share, in line with last year's total payout and analysts' expectations.
Reliance also announced a USD19.4 million on-market share buyback.
The context: Reliance said sales were boosted following a full-year contribution from plumbing products group Holman Industries, which it acquired in March last year. Excluding Holman, sales were down 0.5% year on year.
The company expects the net cost of additional US tariffs on FY26 operating earnings to be between USD25 million and USD30 million. It did not provide revenue or earnings guidance for the upcoming year due to the "uncertainty around the immediate economic outlook" in its key markets.
Chief executive Heath Sharp said the FY25 result reflected "the resilience of the core business in the face of challenging market conditions."
What they said: "In each of our key markets we have faced weaker demand," he said.
"A year ago, we were anticipating interest rate reductions would stimulate residential remodel activity and new home construction. The reductions in interest rates seen so far have been insufficient to lift demand.
"In addition, uncertainty around tariffs has weighed on consumer and business sentiment in the US."
The sources: ASX, UBS research
