REH -16.42%: was hammered today, down as much as 21% at the lows before clawing back some ground. A disappointing FY25 result and a fairly soft outlook, particularly around its US operations.
- Group sales slipped 1% to $8.98bn, but the profit picture was far worse
- Earnings (EBIT) fell 20% to $528m (well below the $580m expected and last year’s $681m)
- Profit (NPAT) dropped 24% to $312m relative to consensus of $326m
Looking ahead, Reece sees a slow recovery in ANZ and expects the US housing market to remain under pressure for the next 12–18 months. Despite this, the group continues to expand its US footprint, adding 24 branches, which has pushed up costs at a time of falling revenues. The final dividend was cut to 11.86cps, bringing the full-year payout to 18.36cps, down nearly a third on last year.
Overall, a tough set of numbers from Reece, with sentiment unlikely to improve until there are clearer signs of stabilisation in the US housing cycle.
- We had flagged REH as turnaround play, though recent results from both JHX and now REH point to a slower recovery than we were hoping.
MM is now neutral on REH
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