Reece Ltd
ASX:REH
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Reece Ltd
ASX:REH
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OTC:GARB
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Reece Ltd
Reece Ltd, a stalwart in the Australian plumbing and bathroom supplies space, has carved out its niche through an enduring commitment to quality and a vast network of supply channels. Founded in 1920 by Harold Joseph Reece, the company has meticulously grown from a small hardware store in Caulfield, Victoria, into a robust enterprise with a commanding presence across Australia and beyond. This growth story is deeply rooted in its resilient business model that hinges on tapping into the construction and home renovation boom by providing essential plumbing and bathroom products. By elegantly interweaving innovation with tradition, Reece has embraced digital transformation in its operations, offering an enriched online shopping experience that complements its extensive physical footprint.
At the heart of Reece's success is its ability to anticipate and adapt to industry trends while maintaining strong relationships with tradespeople, builders, and DIY enthusiasts. It garners revenue by distributing high-quality local and international brands through its various channels, seamlessly integrating product sales with value-added services like expert advice and design consultation. Moreover, strategic acquisitions have bolstered its competitive edge, facilitating geographical expansion and enhancing product diversity. This multifaceted approach not only ensures a steady revenue flow but also cements Reece’s position as a preferred partner in the plumbing and construction industry, thriving amidst fluctuating economic cycles.
Reece Ltd, a stalwart in the Australian plumbing and bathroom supplies space, has carved out its niche through an enduring commitment to quality and a vast network of supply channels. Founded in 1920 by Harold Joseph Reece, the company has meticulously grown from a small hardware store in Caulfield, Victoria, into a robust enterprise with a commanding presence across Australia and beyond. This growth story is deeply rooted in its resilient business model that hinges on tapping into the construction and home renovation boom by providing essential plumbing and bathroom products. By elegantly interweaving innovation with tradition, Reece has embraced digital transformation in its operations, offering an enriched online shopping experience that complements its extensive physical footprint.
At the heart of Reece's success is its ability to anticipate and adapt to industry trends while maintaining strong relationships with tradespeople, builders, and DIY enthusiasts. It garners revenue by distributing high-quality local and international brands through its various channels, seamlessly integrating product sales with value-added services like expert advice and design consultation. Moreover, strategic acquisitions have bolstered its competitive edge, facilitating geographical expansion and enhancing product diversity. This multifaceted approach not only ensures a steady revenue flow but also cements Reece’s position as a preferred partner in the plumbing and construction industry, thriving amidst fluctuating economic cycles.
Group result: Sales up 6% to $4.6 billion, but earnings were softer — EBITDA down 6% to $448 million and EBIT down 14% to $262 million.
Guidance: Group EBIT for FY '26 guided to $520 million–$540 million.
ANZ trading: ANZ sales up 4% to $2.1 billion; ANZ EBIT down 7% to $179 million with margin pressure from elevated costs.
U.S. performance: U.S. sales up 6% to USD 1.7 billion (like‑for‑like down low single digits); U.S. EBIT down 26% to USD 55 million, reflecting new-branch costs and soft residential demand.
Network growth: Continued rollout — 4 net new branches and 17 refurbishments in ANZ; 19 new branches in the U.S. (total U.S. branches 286) with a sustainable run‑rate of 10–15 p.a.
Cash & capital: Net operating cash inflows $199 million; CapEx/sales 1.8%; returned $401 million via buybacks; net debt ~$1.0 billion; gross interest H1 $31 million and FY '26 expected $65–$75 million.
Costs & margins: ANZ and U.S. both saw margin contraction due to elevated labor, IT and property costs and depreciation from new stores; ANZ margin decline c.100–106 bps; U.S. EBITDA margin down ~120 bps.
Digital & people: Ongoing investments in digital (combined digital teams, Copilot rollouts) and leadership/training; management flags AI embedding as a strategic priority.
