The Reliance Worldwide Corporation Ltd (ASX: RWC) share price shot out of the gates this morning after the company released its full-year FY24 results.
The ASX 200 industrials stock is the strongest performer within the S&P/ASX 200 Index (ASX: XJO) at the time of writing.
The Reliance Worldwide share price opened at $5, up 6.38% from yesterday's closing value. It then ascended to an intraday high of $5.24 during the morning, representing an 11.5% bump.
Let's take a look at the FY24 results.
Here are the highlights of the report:
Reliance Worldwide said sales volumes in all regions were softer due to weaker demand for remodelled homes and fewer new builds. However, management said new product revenues and the acquisition of Holman Industries mitigated these impacts.
Reliance Worldwide announced it would buy Holman Industries on 13 February. Investors appeared supportive of the move with the Reliance Worldwide share price rising 2.55% on the day.
Operating earnings (EBITDA) for the year were $247.5 million, 10% lower than pcp. This included $27.1 million in one-off costs related to the closure of the Supply Smart business in the Americas, EMEA
restructuring, the impairment of manufacturing assets in Spain, and Holman acquisition costs.
Excluding these items, adjusted EBITDA was $274.6 million, which was in line with the pcp.
The plumbing and heating products manufacturer announced $23 million in cost savings driven by restructuring in the Americas market, procurement savings, EMEA restructuring, and other initiatives.
The final distribution reflects the revised distribution policy announced in February with the half-year results. The policy is for distributions to comprise 50% dividends and 50% on-market share buybacks.
Reliance Worldwide CEO Heath Sharp said economic conditions had been challenging in FY24.
The impact of higher interest rates in FY24 has led to reduced consumer appetite for remodel activity and lower levels of residential new construction activity. We've worked proactively to ensure we minimised the impact of lower volumes in all of our regions.
We introduced a range of new products in the Americas which drove an above-market sales performance, while cost reduction programs in all regions helped to mitigate the impact of lower volumes and offset cost inflation, enabling RWC to achieve stable operating margins in line with the prior year.
For the first six months of trading in FY25, Reliance Worldwide expects group external sales to be broadly flat relative to the pcp, excluding the impact of Holman and Supply Smart.
The company expects new product and revenue initiatives to help offset the impact of weaker markets.
It will continue in its efforts to reduce costs and enhance efficiency. Reliance Worldwide is aiming to improve its consolidated EBITDA margin (excluding Holman) in the first half of FY25 relative to the pcp.
The ASX 200 industrial stock is 17.7% higher in the year to date and up 33.4% over the past 12 months.
Reliance Worldwide is outperforming its sector peers by a significant margin. The S&P/ASX 200 Industrials Index (ASX: XNJ) has risen by 4.7% in the year to date and by 8.3% over the past 12 months.
The post Reliance Worldwide share price soars 11% on FY24 results appeared first on The Motley Fool Australia.
Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Reliance Worldwide. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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