Reece Limited reported a 6% rise in sales revenue to $4.6 billion for the half-year ending December 2025, while profits declined amid challenging market conditions. The company continues to expand its branch network in Australia and the US, balancing growth ambitions with cost pressures.
- Sales revenue increased 6% to $4.6 billion
- EBITDA fell 6%, EBIT down 14%, EPS declined 19%
- Branch network expanded by 4 in ANZ and 19 in the US
- Net leverage ratio rose to 1.5x following share buyback
- Outlook cautious amid subdued residential construction markets
Solid Sales Growth Amid Profit Challenges
Reece Limited, a leading supplier in plumbing and building products, reported its half-year results for the six months ending 31 December 2025, showing a 6% increase in sales revenue to $4.6 billion compared to the prior corresponding period. However, this top-line growth was accompanied by declines in profitability metrics, with EBITDA down 6%, EBIT falling 14%, and earnings per share dropping 19%. These results reflect the ongoing challenges in the building products sector, particularly in residential construction markets.
Branch Network Expansion Supports Long-Term Strategy
Despite the profit pressures, Reece continues to invest heavily in expanding its physical footprint. The company added 4 new branches across Australia and New Zealand (ANZ) and 19 new branches in the United States during the half-year. This expansion is part of Reece’s strategic blueprint to enhance customer service, digital capabilities, and operational excellence, positioning the business for long-term growth despite short-term market softness.
Market Conditions Remain Tough
The residential construction sector remains subdued, weighed down by affordability challenges in both Australia and the US. In ANZ, sales grew modestly by 4%, but EBIT declined 7% due to increased costs related to people and digital investments. In the US, sales rose 6% in US dollars, driven by network expansion, but like-for-like sales were down slightly, and EBIT fell sharply by 26%, reflecting elevated costs and higher depreciation from ongoing investments.
Balance Sheet and Capital Management
Reece maintains a strong balance sheet with available liquidity of $774 million and an average debt maturity of nearly five years. The net leverage ratio increased to 1.5 times from 0.8 times a year earlier, influenced by lower operating cash inflows and a substantial $401 million share buyback program. The company’s capital management priorities focus on investing for profitable growth while maintaining financial flexibility.
Outlook: Cautious but Committed
Looking ahead, Reece expects ongoing softness in residential new construction markets due to persistent housing affordability pressures. The company anticipates mixed performance across regions, with gradual recovery signs in some states but continued subdued demand overall. Reece’s leadership remains focused on executing its long-term strategy, leveraging its expanded network and digital initiatives to navigate the challenging environment.
Bottom Line?
Reece’s half-year results underscore the tension between growth investments and margin pressures as it navigates a tough residential construction market.
Questions in the middle?
- How will Reece manage margin pressures amid ongoing network expansion costs?
- What impact will prolonged softness in residential construction have on Reece’s US operations?
- Could further capital management actions be needed if market conditions deteriorate?