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The worldâs largest manufacturer of brass PTC product, Reliance Worldwide Corporation Ltd (ASX:RWC), reported its consolidated half-yearly numbers today. The company reported net sales of $544.2 million which translated to an increase of 50.1% in its net sales over the comparative period. A healthy Net Profit After Tax of $65.7 Million was recorded, which was up 58.4% on the comparative period. The depreciating Australian dollar aided the company favourably during the reported period.
Key-Highlights:
Revenue
- Net sales of $544.2 million, an increase of 50.1% over the comparative period.
- Core RWC net sales (excluding John Guest) were $389.4 million, up 7.4% on the comparative period.
- Underlying sales growth in the Americas, on a constant currency basis (after adjusting for one?off items), was 14.3%.
- John Guest sales for the period were up 13.3% at 154.8 million, on the comparative period.
Earnings
- Reported net profit after tax of $65.7 million, up 58.4% on the comparative period.
- Reported earnings per share of 8.4 cents, an increase of 5% on the comparative period.
- Adjusted earnings per share of 9.6 cents, an increase of 20 % on the comparative period.
- Reported EBITDA of $120.7 million, an increase of 52.3% on the comparative period.
Other Highlights:
- An interim dividend of $31.6 million, being 4.0 cents per share.
- New products being tested and launched successfully through major customers, including the Home Depot and Loweâs.
Operating Performance:
The half-yearly result was aided by favorable foreign exchange, excluding the impact of the favourable foreign exchange impact, John Guest sales, underlying growth in sales was 9.5% meeting management expectations. The John Guests business in the UK market continues to grow.
The Fluid Technology PTC fittings are performing well especially in the Americas segment. The adjusted net profit after tax was $74.9 million, translating an increase of 80% on the comparative period. The company highlighted that the adjusted NPAT reflected the adjustments made for John Guestâs integration costs, inventory unwinds and accounting impact.
Segment Review
Americas: The company reported a good set of numbers for this region, reported net sales of $323.6 million, an increase of 21$ on comparative period. The growth in sales in this region was driven by ongoing end-user demand for RWCâs core SharkBite brass fittings and accessories. Sharebite has 10% of the USA plumbing fittings market with a solid double-digit distributor end sale.
Asia Pacific: This is the smallest sales segment with 13% of external sales. This segment delivered a net sale of $129.8 million, with an increase of 7% on the comparative period. The company reported that the sales were impacted by a change in revenue recognition, weak housing market and delays in the release of new product ranges.
Europe, Middle East Africa:
The net sales were impacted by the closing of RWCâs Evesham location and integration with John Guest. Net sales from core RWC grew 6.0% on the comparative period sales coming at $31.1 million, driven by higher internal sales and favourable currency. The company highlighted that the John Guest Integration is proceeding as per plan.
Outlook:
RWC maintains its EBITDA guidance range for FY2019 of $280 million to $290 million and a higher percentage of EBITDA is expected to be earned in the second half of FY2019.
Stock Information:
Reliance Worldwide Corporationâs (ASX:RWC) market capitalization stands at $3.89 billion. The Stock price was noted as A$4.890 (Closing price as on 25th February 2019) with the 52-week low price of A$ 3.937 and the 52-week high price of A$6.380. The company has a PE of 39.760x and EPS of 0.123 AUD.
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