English
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.
Important to know
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Ready to open an IG account?
Start your trading journey now
Follow us online:
