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Reliance hits record on global sales surge

Trevor Chappell  |  26 Feb 2018Text size  Decrease  Increase  |  
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MELBOURNE - [AAP] Flushed with success, shares in plumbing supplies giant Reliance Worldwide (ASX: RWC) have soared to a record high after the company lifted first-half net profit by 17.5 per cent.

Reliance's earnings surged as the company grew sales across all regions and improved its margins in the US and the Asia-Pacific region.

Reliance on Monday reported a 17.5 per cent lift in net profit to $41.5 million for the six months to December 31.

Reliance also increased its full-year earnings guidance to a range of $150 million to $155 million, from $145 million to $150 million previously.

Reliance said demand for its SharkBite push-to-connect (PTC) fittings and Holdrite brand was strong.

"We are particularly pleased with the strong distribution network that we've built in North America where we have SharkBite on the shelf in more than 23,000 outlets," Reliance chief executive Heath Sharp said in a statement.

"This positions us well to continue the growth of SharkBite brass PTC fittings and, perhaps more importantly, provides the distribution channels to support the demand we are creating for EvoPEX, Holdrite and other new products."

Reliance said the strong sales and improved margins were partly offset by higher costs for copper and other inputs and a weakening of the US dollar relative to the Australian dollar.

Reliance expects its full-year forecast result to be driven by ongoing expansion of the PTC business in the Americas, a full-year contribution from Holdrite, and continued growth in the Asia Pacific, Europe, Middle East and Africa.

Reliance completed the $125 million acquisition of US plumbing suppler Holdrite in June 2017.

Shares in Reliance gained 27.5 cents, or 6.6 per cent, to $4.415 on Monday, their highest level since the company's listing on the ASX in April 2016.

HIGHER SALES, MARGINS LIFT RELIANCE

* First-half profit up 17.5pc cent to $41.5m

* Revenue up 28.3pc to $362.5m

* Interim dividend of 3.5 cents, fully franked, up from 3.0 cents, partly franked

 

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© 2020 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

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