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.
