Reliance Worldwide books profit lift as benefit of copper price falls start to flow

Reliance Worldwide has posted a firmly higher half-year net profit as the benefits of copper price falls begin to flow.

Reliance Worldwide CEO Heath Sharp. Picture: Jeremy Piper

Plumbing supplies company Reliance Worldwide booked a firmly higher interim net profit on Monday as it reaffirmed its full-year earnings guidance.

Unveiling a net profit after tax up 58.4 per cent to $65.7 million for the six months through December, the company (RWC) said sales in the Americas, combined with the inclusion of UK plumbing company John Guest, was behind the lift to earnings.

Revenue from ordinary activities lifted 50.1 per cent to $544.2m.

The performance of the recently-acquired John Guest business was exceeding expectations, Reliance said.

“The strategic rationale for the acquisition continues to be confirmed as we progress with integration activities,” the company said.

“We also continue to be impressed by how strong the John Guest business is in terms of end-user connections, distribution partner relationships and engineering capabilities.”

The company said that it had realised synergies to the value of about $4.1m following the acquisition, and that it was on track to meet the previously advised target of $10m by the end of the financial year, prior to one-off integration costs incurred.

Reliance declared a fully-franked interim dividend of 4 cents a share, up from 3c last year.

The company said it had begun to see a reduction in the cost of purchased materials following a drop in the copper price last year, the cost benefits of which Reliance said had begun to flow through to production and will positively impact results in the second half.

Reliance said it had considered the possible consequences that Brexit could have on the business and had concluded that it would not have a negative impact. However, the position and consequences remained uncertain.

“The potential risks arising from Brexit continue to be monitored and evaluated and plans and assessments will be adjusted accordingly as more information becomes known,” the company said.

Reliance Worldwide shares closed flat at $4.89 apiece.