Reliance Worldwide Corporation Limited (ASX:RWC) Announces H1 2024 Results
Financial Performance
Reliance Worldwide Corporation Limited (RWC) reported net sales of US$676.5 million for the six months ended 31 December 2024, representing a 14.8% increase compared to the prior corresponding period (pcp). Net profit after tax rose by 31.8% to US$67.2 million, while adjusted NPAT increased 12.3% to US$76.0 million. Adjusted earnings per share were 9.8 cents, up 14.0% on pcp. Adjusted EBITDA reached US$143.8 million, reflecting a 15.2% increase on pcp.
Dividend and Share Buyback
For the six months ended 31 December 2024, RWC declared a total distribution of 5.0 cents per share, consisting of an unfranked interim cash dividend of 2.5 cents per share and an on-market share buyback amounting to US$19.5 million, equivalent to 2.5 cents per share.
Future Outlook
For the full financial year 2025, RWC expects group external sales to rise by mid-single digit percentage points compared to FY24. Excluding the impact of Holman and Supply Smart, full-year group external sales are projected to remain broadly flat, within a low single digit percentage point range. The company targets an improvement in consolidated EBITDA margin through cost reductions and efficiency measures and aims for an operating cash flow conversion above 90%, consistent with its long-term target.
Executive Comments
CEO Heath Sharp said, “The seamless integration of Holman into RWC’s Australian operations after acquisition in March 2024 has enabled us to perform strongly in the context of a weak Australian residential construction sector. In the Americas, we delivered underlying sales growth of 5.4% which was a good result in light of tough trading conditions. EMEA continued to be our most challenging region. It was pleasing to see positive sales growth in Continental Europe, with all markets except Germany outperforming the prior period. The UK plumbing and heating sector, however, continued to be challenged by weak housing market conditions with RWC’s UK sales down 6.9%. The team’s operational improvements meant we were able to maintain operating margins despite market weakness. We have continued to generate strong cash flows enabling us to further reduce our borrowings. We ended the period with a significant reduction in leverage to 1.41 times compared with 1.56 times at the end of the pcp.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Reliance Worldwide. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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