Reece Limited

Reported FY26 sales revenue was A$9.4 billion, up 4.5% year on year. EBITDA was A$901 million, flat versus the prior year, and EBIT was A$534 million, down 2.6%. EPS was A$0.495 and return on capital was 11.9%. In ANZ, sales rose 8.3% and EBIT increased 6% to A$360 million; ANZ EBIT margin was 8.6%, down 17 basis points, with a A$10 million impact from Metalflex brand amortization. In the U.S., sales increased 6.5% to USD 3.5 billion, like-for-like sales declined 1.7%, EBITDA fell 5%, and EBIT decreased 13% to A$118 million. The group generated A$645 million of net operating cash inflows, capital expenditure was 1.9% of sales, gross interest expense was A$66 million, and net debt ended at A$744 million. For FY27, management expects gross interest expense of A$60 million to A$70 million and said ANZ should have first-half momentum, while U.S. growth should be modest and second-half visibility remains limited.

Peter Wilson framed FY26 as evidence of a long-term strategy working through the cycle, emphasizing the company’s purpose, disciplined capital allocation, and multi-decade U.S. buildout. He repeatedly highlighted ANZ momentum, the strength of the business model, and the company’s ability to adapt through supply shocks, rate rises, and affordability pressures. His tone was confident but cautious, especially on FY27 second-half visibility and the challenged U.S. residential market.

Andrew Young emphasized that ANZ profitability was held back by continued investment and a A$10 million Metalflex brand amortization charge, while excluding that item ANZ margin would have been up 7 basis points year on year. He noted U.S. margins were pressured by branch expansion and scaling costs, with EBITDA down 5% and EBIT down 13%. On cash and capital allocation, he cited A$645 million of operating cash inflows, A$401 million returned through buybacks, capex at 1.9% of sales, and leverage finishing at 1x EBITDA; he also guided FY27 gross interest expense to A$60 million-A$70 million.

Analysts focused on ANZ second-half volume strength, possible demand pull-forward, U.S. store rollout pace, capex intensity, and margin pressure. Management said some categories such as PVC saw pull-forward after supply shocks, but described ANZ momentum as genuine and said the first half looks supported by a solid pipeline, while the second half is too uncertain to call. On the U.S., Peter Wilson said ‘modest’ means modest sales growth on an all-in basis, with residential new construction still very soft, and reaffirmed the 15 to 20 annual branch opening plan as a sustainable pace rather than a change in strategy.