Eco Investor March 2015

Core Securities

Reece Australia

Many Records for Reece

Reece Australia continues to power ahead with record revenue, profit, interim dividend and share price.

The company's December half sales revenue was up 25 per cent and topped one billion at $1.049 billion. Net profit rose 34 per cent to $80.2 million. And the company's shares hit an all time peak at $34.20 on 23 February, a few days before it released its results, and remained around that level and peaked again at $34.50 after the results.

The interim dividend is up 2 cents to 24 cents fully franked. The current full year yield is 1.9 per cent, indicating that investors see more growth and are willing to pay to get on board.

Interim earnings per share were 81 cents, up from 60 cents. The payout ratio is low and gives the company plenty of capital to grow. The balance sheet is also strong, with low borrowings.

The growth came from new stores and refurbishments and the acquisition of Actrol Parts Holdings Pty Ltd in January 2014. Reece said inventory levels rose driven by additional sales, improving the in-stock service rate and new products.

The company is positive about the level of building activity this half, but says there is increasing uncertainty around economic conditions for the calendar year.

Where most people see bathroom and kitchen ware, an environmental investor can see plumbing and the technology of water and waste management. If investors are looking for a water management and water conservation play, Reece is a good place to start looking. But daily share volumes are not high so it is a tightly held stock, which helps its share price. (ASX: REH)

Reece Australia half yearly revenue and profits.

 

 

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