Reece Limited (ASX:REH), a constituent of the S&P/ASX 200 and Australia's leading plumbing, waterworks, and HVAC-R products distributor, released its FY26 full-year results on 24 August 2026, reporting sales Revenue up 4.5% to $9,378 million on the prior year. The result reflected a clear divergence between the two halves of the business: strong Volume recovery in the ANZ region as residential and commercial activity improved, offset by the continuing impact of weak US residential new construction on the American operations, which produced softer growth than the group's long-term potential.

About the Company

Reece Limited is an Australian-headquartered distributor of plumbing, waterworks, and HVAC-R (heating, ventilation, air conditioning, and refrigeration) products, serving commercial and residential trade customers through approximately 1,000 branches across Australia, New Zealand, and the United States. Established in 1920 and listed on the ASX, Reece employs approximately 9,000 people. Its US operations — primarily comprising MORSCO, acquired in 2018 — serve the American residential and commercial plumbing market and represent approximately 55% of total group revenue. The company's 2030 vision is to be its trade's most valuable partner, operationalised as being easy to do Business with in every branch, on every screen, every day.

FY26 Results

Sales revenue was $9,378 million, up 4.5% on FY25's $8,978 million. On a constant currency basis (applying the same US Exchange Rate of 0.6471 as FY25), sales revenue increased 7.3% to $9,630 million. EBITDA was $901 million, flat on FY25's $901 million. Group costs excluding Depreciation and Amortisation increased 9.6% to $1,820 million, driven by Investment in network, digital and technology transformation, and employee proposition including a new long-term Equity program. EBIT was $534 million, down 2.6% on FY25's $548 million. NPAT was $308 million, down 2.8% on FY25's $317 million. EPS was 49.5 cents, up 0.7%. ROC was 11.9%, up 5 basis points. Net operating cash inflows were $645 million (FY25: $600 million). Capex was $174 million (FY25: $258 million) with a capex-to-sales ratio of 1.9%. Net Debt increased to $744 million (FY25: $590 million), with net Leverage of 1.0x (down from 1.5x at December 2025). ANZ sales revenue was up 8.3% to $4,204 million, with EBITDA up 7.3% to $532 million and EBIT up 6.1% to $360 million, driven by higher volumes and Inflation of approximately 2%. ANZ ended the year with 678 branches. The US region experienced softer growth due to weak residential new construction.

Distribution

The Board declared a fully franked final Dividend of 13.40 cents per share for FY26.

Index Context

Reece is a constituent of the S&P/ASX 200 and represents an unusual investment proposition within the index: a family-controlled (Wilson family), ASX-listed trade distribution business with significant US exposure through its MORSCO operations. For S&P/ASX 200 investors, REH provides dual-market exposure to both Australian residential and commercial construction activity (through ANZ) and US residential new construction cycles (through the American operations). The business's Earnings are sensitive to housing construction volumes in both geographies, making it a read-through on housing cycle conditions across two of the world's largest English-speaking markets.

Material Risks and Uncertainties

US residential new construction weakness is the primary earnings headwind, and management guided that it expects more modest growth in the US in FY27 where residential new construction remains a challenge. US housing start volumes are sensitive to Mortgage rates, affordability, and consumer confidence, all of which face headwinds in the current environment. Group cost growth of 9.6% — driven by network, digital, and technology investment plus the new equity program — significantly outpaced revenue growth, compressing EBITDA margins and reducing absolute EBIT and NPAT despite top-line growth. Net debt increased to $744 million from $590 million, reflecting ongoing investment and share buy-back funding, though leverage at 1.0x remains conservative.

Upcoming Milestones

FY27 first-half ANZ performance will test whether the volume recovery seen in FY26 is sustained, with management entering the year with a solid ANZ pipeline that should support first-half momentum. The trajectory of US residential new construction — the most important external variable for Reece's US operations — will be closely monitored, with any recovery in US housing starts from current levels potentially providing an earnings uplift. The digital and innovation agenda, including the recently launched next-generation bathroom showroom in Rosebery (digitally-led, built on customer insight) and AI initiatives including process automation tools, will be developed and reported through FY27.