Reece: Interim result 2018
Recommendation
- {{x.value}}
{{ twilioFailed ? 'SMS Code Failed to Send…' : 'Enter verification code' }}
{{ completedStep1 ? 'Authentication & Security' : content.trialHeading.replace('{0}', user.FirstName) }}
{{ content.upgradeHeading.replace('{0}', user.FirstName) }}
The email address you entered is registered with InvestSMART
Please login to continue
We have sent you an email with the details of your registration.
Looks you are already a member. Please enter your password to proceed
{{ upgradeCTAText }}
Updating information
Please wait ...
Your membership to InvestSMART Group recently failed to renew.
Please make sure your payment details are up to date to continue your membership.
Having trouble renewing?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
You've recently updated your payment details.
It may take a few minutes to update your subscription details, during this time you will not be able to view locked content.
If you are still having trouble viewing content after 10 minutes, try logging out of your account and logging back in.
Still having trouble viewing content?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
Please click on the ACTIVATE button to activate your Intelligent Investor 15-day free trial
Please click on the ACTIVATE button to finalise your membership
Unsuccessful registration
Registration for this event is available only to Eureka Report members. View our membership page for more information.
Registration for this event is available only to Intelligent Investor members. View our membership page for more information.
- You are already registered for this event.
- This event is already full.
- Please select a quantity for at least one ticket.
- {{ i }}
Forgotten password
Please enter your email address below to request a new password
- Indepth analysis of ASX listed shares
- BUY, Hold and Sell Recommendations
- Ideas Lab
- Special Reports
- Alan Kohler’s Weekend Briefing
- Interviews with CEO’s & top influencers
- Money Cafe and Talking Finance
- Super Advice and Q&A with Ask Alan
Back in Reece: Result 2017, we said Reece was priced for a downturn in construction activity. Well, there's no sign of a downturn and there's some chance activity could be ‘stronger for longer'. With the stock up 19% since then – on a share split-adjusted basis – the market is apparently more comfortable with the cyclical outlook.
| Six months to Dec | 2017 | 2016 | /– (%) |
|---|---|---|---|
| Revenue ($m) | 1,332 | 1,211 | 10 |
| EBITDA ($m) | 179 | 164 | 9 |
| Net profit ($m) | 106 | 96 | 10 |
| EPS (cents) | 21.2 | 19.3 | 10 |
| Interim div of 6.0 cents, fully franked, up 3%, ex date 9 Mar. | |||
Reece reported another decent interim result. Sales were up 10% to $1,332m, while net profit also rose 10% to $105m. At last year's annual general meeting management highlighted that sales were up 8% in the first quarter, so you might assume the December quarter was a bumper period.
The 2% sales difference, however, is accounted for by the $33m acquisition of Viadux on 30 September 2017. Viadux, which generates annual sales of approximately $100m, is the leading distributor of water pipeline systems to civil contractors, water utilities and councils. Deduct the Viadux sales and underlying sales rose about 8%.
The company continues to develop new products, refurbish outlets and invest in its online offering. It also opened a new distribution centre in New Zealand during the half to ensure inventory is always available to customers across the Tasman.
The stock has now risen 49% since we upgraded it about two years ago in Reece: Three reasons. Perhaps we should take our own advice in that article: ‘Picking cycles is harder than it looks'. We'll re-evaluate our valuation in a future review but for now we're sticking with our price guide and recommendation. HOLD.
Recommendation
Call 1300 880 160
Start a chat
Schedule a call
