Analysts found themselves off the mark when assessing the half-year results of plumbing supplies giant Reece (ASX:REH), as evidenced by the surprising 18% surge in share price witnessed yesterday, following a remarkable 70% increase in value over the past year.
This surge propelled the company’s valuation well beyond the $A18.4 billion mark, significantly enriching the Wilson family, who maintains a controlling stake of approximately 70%. The market’s enthusiastic reception of Reece’s interim report, defying expectations of subdued demand, was underscored by CEO Peter Wilson’s hints of a softening environment in the Australia and New Zealand (ANZ) regions.
Contrary to expectations, Reece reported a robust result with earnings per share (EPS) at 34.6 A cents, surpassing analysts’ conservative estimates. The market’s buoyant response, illustrated by shares hitting a 52-week high, clearly indicated an oversight on the part of analysts.
Reece’s performance was further underscored by a 2.5% increase in sales to $4.537 million for the half, with statutory net profit climbing 20% to $224 million. CEO Peter Wilson attributed this success to the company’s resilient business model and the unwavering execution by its team.
As Reece looks ahead, anticipating subdued demand in the second half, the company remains committed to its long-term investment strategy and its vision of becoming the most valuable partner for the trade by 2030. This commitment reflects Reece’s confidence in its ability to weather market fluctuations and uphold its position as an industry leader.