Reliance Worldwide (ASX:RWC) Shares Surge 11.5% to Lead ASX 200 After Strong FY24 Results and Strategic Moves

2 min read | August 20, 2024 03:00 PM AEST | By Team Kalkine Media

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Reliance Worldwide (ASX:RWC) Shares Surge 11.5% to Lead ASX 200 After Strong FY24 Results and Strategic Moves — Image source: Shutterstock

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Reliance Worldwide Corporation Ltd (ASX:RWC) saw its share price leap this morning, emerging as the top performer within the S&P/ASX 200 Index (ASX:XJO) after the company unveiled its full-year FY24 results. The ASX 200 industrials stock opened at AU$5, marking a 6.38% increase from the previous day’s close, and soared to an intraday peak of AU$5.24, reflecting an impressive 11.5% gain.

Reliance Worldwide achieved net sales of US$1,245.8 million, a slight 0.2% increase compared to the prior corresponding period (pcp).

NPAT fell by 21% to US$110.1 million.
Adjusted NPAT was US$146.9 million, down 6% from the previous year.
Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled US$247.5 million, representing a 10% decrease from the pcp.
Adjusted EBITDA remained steady at US$274.6 million, matching the pcp.
Cash flow from operations increased by 7% to US$314.2 million.
The company's leverage ratio improved to 1.59x net debt to EBITDA.

A final distribution of 5 US cents per share and an unfranked interim dividend of 2.5 US cents per share were announced. Additionally, the company revealed an on-market share buyback of US$19.6 million.

The company noted softer sales volumes across all regions, attributed to decreased demand for remodeled homes and fewer new builds. Despite these challenges, Reliance Worldwide managed to offset some of the negative impacts through new product revenues and its acquisition of Holman Industries.

The acquisition of Holman Industries, announced on February 13, was positively received by investors, contributing to a 2.55% rise in Reliance Worldwide’s share price on the day of the announcement. The company’s operating EBITDA was affected by US$27.1 million in one-off costs associated with various restructuring and impairment actions, but adjusted EBITDA was consistent with the previous year.

To improve financial performance, Reliance Worldwide implemented cost-saving measures totaling US$23 million, including restructuring in the Americas market and procurement savings.

The final distribution aligns with the company’s revised policy announced in February, focusing on equal distribution between dividends and on-market share buybacks. The strategic steps and solid financial metrics have clearly resonated with investors, driving the share price to a notable high.

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