Shares in plumbing supplies group Reliance Worldwide fell more than 10% yesterday after the group revealed a solid underlying profit result after considerable change at the end of the year after the big move offshore through the takeover of UK group, John Guest for $1.2 billion.
Net sales jumped 28% to $769.4 million and up 30% on a constant currency basis. Excluding contribution from John Guest, net sales were $744.9 million or up 24% on the prior year
Directors said driving the rise in sales was another strong performance by its SharkBite Push‐To‐Connect (“PTC”) fittings and accessories, the first full year inclusion of Holdrite and a month of John Guest sales in June.
After tax net profit of $66.0 million was struck after expensing $20.5 million of one‐off John Guest acquisition transaction costs.
But the figures got the thumbs down from investors and the shares ended down 8.4% at $5.66. Directors said that earnings before interest tax depreciation and amortisation (EBITDA), before any contribution from John Guest and before transaction costs expensed, was $150.9 million, up 25% on the prior year and within the guidance range previously provided by RWC of $150 million to $155 million.
Directors point out that the EBITDA figure includes a one‐time charge of $6.0 million arising following recent reclassification of tariff product categories for products imported to the USA.
As a result the underlying EBITDA (before John Guest contribution and transaction costs expensed) was $156.9 million excluding this charge, above the top end of guidance.
Directors said that Excluding the contribution of John Guest and associated transaction and financing costs, net profit after tax was up nearly 20% at $78.6 million.
Final dividend of 3.0 cents per share on expanded capital of 790.1 million issued shares.
The interim was 3.5 cents a share making a total of 6.5 cents a share and up from 6 cents a share in 2016-17.
