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Stock of the day
Reece Limited
As Reece reports a significant drop in first-half net profit, it remains optimistic about a gradual recovery in key markets, particularly in Australia and New Zealand.
(AI video summary)
This video was created on 23 February 2026 for IG audiences by ausbiz.
ASX code: REH
Reece faces challenges amid global market slowdown
Reece Limited, a leader in plumbing and bathroom supplies, saw its first-half (H1) net profit fall by 20%. This decline is due to subdued housing markets in Australia, New Zealand (ANZ) and the United States (US), affecting demand. Despite this, management notes a gradual recovery in ANZ, with analysts suggesting results were better than expected.
- Net profit: $144 million
- Sales revenue: rose 6% to $4.65 billion, despite a 6% drop in earnings
- Fully franked interim dividend: of 5.4 cents per share.
- Full-year (FY) earnings before interest and tax (EBIT) projection: between $520 million and $540 million.
Market conditions and cyclical nature
Reece's international expansion faces challenges due to unique construction cycles and high borrowing costs. Price increases in construction materials like steel and copper further strain operations. Today's gains, likely due to short covering, show the stock as part of a cyclical recovery, with potential short-term downside risk.
Investment outlook
Analysts observe that the business in ANZ is exceeding expectations, while the US remains challenging due to weak residential construction activity. Despite obstacles, the company's upgraded market guidance has been well-received.
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