Reece, a major supplier of plumbing and bathroom products across Australia and New Zealand and the United States, is operating through a tough slowdown in residential building activity that has dragged on demand and hurt its share price over the past year. The company entered this period after rapid expansion, including a big step into the US market, and is now trying to steady performance while investors closely watch how it handles slowing construction pipelines, cost pressures and changes in interest rates.
For the six months to 31 December, Reece’s net profit fell about 20% to roughly $144 million, yet this still came in around 5% ahead of what analysts had been expecting, which helped the share price jump about 13% in a single session to roughly $15.75. The group now runs more than 680 outlets across Australia and New Zealand and about 286 in the US after opening 19 new American stores in the half, but it is guiding for full year earnings before interest and tax of about $520 million to $540 million, slightly below the previous year’s $548 million. This signals that trading conditions remain challenging despite the earnings beat.
Looking ahead, the picture seems mixed rather than clearly positive. Construction activity in Australia and New Zealand shows early signs of improvement in some regions but other areas such as parts of Victoria still look weak, and any further interest rate increases in Australia could slow demand again. The company appears focused on weathering this cycle through cautious guidance and measured expansion, and while the latest result has eased some market concerns for now, the long term outcome for earnings and the share price will probably depend on how quickly housing markets recover across its key regions.
