Global plumbing supplies group Reliance Worldwide Corporation suffers interim profit dip
Price hikes and continued strong demand for plumbing supplies couldn’t stop Reliance Worldwide Corporation from suffering a fall in net profit during the half-year to December.
QLD Business
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Global plumbing supplies group Reliance Worldwide Corporation suffered a 3 per cent dip in net profit in the first half of the financial year despite price hikes and continued strong demand for its products.
The Melbourne-based company announced Monday that it generated a $US63.7m net profit, down from $US65.9m in the same six-month period in the prior year.
The slide came in spite of a 12 per cent uptick in net sales to $US521.8m, with a 15 per cent lift in the Americas and 11 per cent growth in the Asia Pacific.
“We continued to experience robust market conditions and demand for our products,’’ chief executive Heath Sharp said.
“The trend of increased spending on home remodelling activity, coupled with strong new residential construction markets, has underpinned record levels of demand.
“We were able to consolidate our volumes following a period of exceptional growth in 2021. Importantly, we were able to meet our customer’s service and delivery expectations despite the increased incidence of COVID and supply chain challenges.”
RWC, which is still bedding the down its November acquisition of US business EZ-FLO, pushed up its average prices by more than 7 per cent.
“We have acted decisively to address input cost pressures now being experienced, principally through passing on higher prices, cost control and operational savings,’’ Mr Sharp said.
“We expect operating margin dilution to correct in the second half as additional price rises agreed with our channel partners positively impact results.”
RWC declined to provide earnings guidance for the full-year, citing uncertainty over supply chain disruptions and possible further Covid outbreaks.
But it noted that the outlook for key markets in the second half remains positive.
“Market fundamentals continue to signal steady demand underpinned by the trend of increased expenditure on home remodelling activity,’’ the company said.
RWC plans to pay a US4.5¢ dividend per share.
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