Reece share price on watch after delivering solid FY 2020 result

The Reece Ltd (ASX:REH) share price will be on watch after it delivered solid growth in FY 2020 despite the pandemic…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Reece Ltd (ASX: REH) share price will be on watch this morning following the release of its full year results.

How did Reece perform in FY 2020?

The plumbing parts company celebrated its 100th year of operation in FY 2020 and delivered a solid result despite the bushfires and the pandemic.

For the 12 months ended 30 June, Reece delivered a 10% increase in sales revenue up to $6,010 million. This was driven largely by its US business, which grew sales by 20% to $3,122 million. Its Australian business reported a 1% increase in sales to $2,888 million.

However, due to a 70-basis point contraction in its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) margin, Reece reported just a 3% increase in EBITDA to $537 million.

And on the bottom line, the company's net profit after tax (Pre AASB 16) grew 19% to $202 million.

Despite this earnings growth, Reece has cut its final dividend down by 58% to 6 cents per share fully franked. This means a full year dividend of 12 cents per share, down 41% year on year.

Unprecedented year.

Reece's CEO, Peter Wilson, commented: "2020 was unprecedented. Starting with devastating bushfires, followed by a health and economic crisis. We acted quickly to adapt, protecting our people and supporting our customers and the community. We're proud that while facing into this environment we were able to deliver a record result, in our 100th year."

"We've focussed on what we can control, protecting our business today, while investing in our long-term future, to accelerate our strategy. Our customers, the tradespeople of Australia, New Zealand and the United States, play an essential role in society to help prevent disease – providing clean water, sanitation, and comfortable homes. We have continued to support them during this year of crises, keeping our stores open, and providing the expertise, quality products and digital support they expect," he added.

No guidance has been given for the year ahead.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Man sitting in a plane seat works on his laptop.
Opinions

Expert reveals 2 ASX stocks to sell — and 1 is a recent IPO

Toby Grimm from Baker Young shares his insights.

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

Guess which 4 ASX 200 shares are rocking new 52-week highs today!

Investors just sent these four ASX 200 shares to one-year-plus highs.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Broker Notes

Why are Platinum shares rocketing 13% today?

This fund manager is getting a lot of love from investors today. Let's find out why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Evolution Mining, Orthocell, Platinum, and Turaco shares are charging higher

These shares are having a better day that most on Thursday.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why CSL, Imricor, Jumbo, and Netwealth shares are falling today

These shares are under pressure on Thursday. But why?

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Broker Notes

Morgans says these ASX stocks can rise 30% to ~50%

Let's see which shares could generate big returns for investors.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Broker Notes

Does Macquarie rate Fortescue shares a buy, hold or sell?

The broker has given its verdict on this popular mining stock.

Read more »

group of traders cheering at stock market
Share Market News

We could see the ASX 200 at 9,000 points by 2026. Here's why.

I wouldn't be shocked to see more records this year...

Read more »