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Reece

ASX:REH
Snowflake Description

Average dividend payer with moderate growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
REH
ASX
A$6B
Market Cap
  1. Home
  2. AU
  3. Capital Goods
Company description

Reece Limited engages in importing, wholesaling, distributing, marketing, and retailing plumbing, bathroom, heating, ventilation, air-conditioning, and refrigeration products in Australia and New Zealand. The last earnings update was 80 days ago. More info.


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REH Share Price and Events
7 Day Returns
-2.6%
ASX:REH
1%
AU Trade Distributors
1.1%
AU Market
1 Year Returns
-17.5%
ASX:REH
-13.1%
AU Trade Distributors
2.6%
AU Market
REH Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Reece (REH) -2.6% -0.7% -2.9% -17.5% 32.9% 71.2%
AU Trade Distributors 1% 1.7% 0.3% -13.1% 89.3% 77.1%
AU Market 1.1% 1.6% 4.4% 2.6% 17.9% 7.7%
1 Year Return vs Industry and Market
  • REH underperformed the Trade Distributors industry which returned -13.1% over the past year.
  • REH underperformed the Market in Australia which returned 2.6% over the past year.
Price Volatility
REH
Industry
5yr Volatility vs Market

Value

 Is Reece undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Reece to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Reece.

ASX:REH Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 1 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.7%
Perpetual Growth Rate 10-Year AU Government Bond Rate 2.3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for ASX:REH
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year AU Govt Bond Rate 2.3%
Equity Risk Premium S&P Global 6%
Trade Distributors Unlevered Beta Simply Wall St/ S&P Global 0.91
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.91 (1 + (1- 30%) (29.92%))
1.068
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.07
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.31% + (1.068 * 5.96%)
8.68%

Discounted Cash Flow Calculation for ASX:REH using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Reece is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

ASX:REH DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (AUD, Millions) Source Present Value
Discounted (@ 8.68%)
2019 14.52 Est @ -31.2% 13.37
2020 11.45 Est @ -21.15% 9.70
2021 9.84 Est @ -14.11% 7.66
2022 8.93 Est @ -9.18% 6.40
2023 8.42 Est @ -5.74% 5.56
2024 8.14 Est @ -3.32% 4.94
2025 8.01 Est @ -1.63% 4.47
2026 7.97 Est @ -0.45% 4.10
2027 8.00 Est @ 0.38% 3.78
2028 8.08 Est @ 0.96% 3.52
Present value of next 10 years cash flows A$63.50
ASX:REH DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= A$8.08 × (1 + 2.31%) ÷ (8.68% – 2.31%)
A$129.90
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= A$129.90 ÷ (1 + 8.68%)10
A$56.53
ASX:REH Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= A$63.50 + A$56.53
A$120.03
Equity Value per Share
(AUD)
= Total value / Shares Outstanding
= A$120.03 / 560.82
A$0.21
ASX:REH Discount to Share Price
Calculation Result
Value per share (AUD) From above. A$0.21
Current discount Discount to share price of A$10.10
= -1 x (A$10.10 - A$0.21) / A$0.21
-4619%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Reece is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Reece's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Reece's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
ASX:REH PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in AUD A$0.41
ASX:REH Share Price ** ASX (2019-05-17) in AUD A$10.1
Australia Trade Distributors Industry PE Ratio Median Figure of 7 Publicly-Listed Trade Distributors Companies 18.45x
Australia Market PE Ratio Median Figure of 542 Publicly-Listed Companies 15.99x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Reece.

ASX:REH PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= ASX:REH Share Price ÷ EPS (both in AUD)

= 10.1 ÷ 0.41

24.94x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Reece is overvalued based on earnings compared to the AU Trade Distributors industry average.
  • Reece is overvalued based on earnings compared to the Australia market.
Price based on expected Growth
Does Reece's expected growth come at a high price?
Raw Data
ASX:REH PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 24.94x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 1 Analysts
Not available
Global Trade Distributors Industry PEG Ratio Median Figure of 79 Publicly-Listed Trade Distributors Companies 1.31x
Australia Market PEG Ratio Median Figure of 360 Publicly-Listed Companies 1.42x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for Reece, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Reece's assets?
Raw Data
ASX:REH PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in AUD A$3.50
ASX:REH Share Price * ASX (2019-05-17) in AUD A$10.1
Australia Trade Distributors Industry PB Ratio Median Figure of 15 Publicly-Listed Trade Distributors Companies 0.95x
Australia Market PB Ratio Median Figure of 1,676 Publicly-Listed Companies 1.65x
ASX:REH PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= ASX:REH Share Price ÷ Book Value per Share (both in AUD)

= 10.1 ÷ 3.50

2.89x

* Primary Listing of Reece.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Reece is overvalued based on assets compared to the AU Trade Distributors industry average.
X
Value checks
We assess Reece's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Trade Distributors industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Trade Distributors industry average (and greater than 0)? (1 check)
  5. Reece has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Reece expected to perform in the next 1 to 3 years based on estimates from 1 analyst?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
13.6%
Expected annual growth in earnings per share.
Earnings growth vs Low Risk Savings
Is Reece expected to grow at an attractive rate?
  • Reece's earnings growth is expected to exceed the low risk savings rate of 2.3%.
Growth vs Market Checks
  • Reece's earnings growth is expected to exceed the Australia market average.
  • Reece's revenue growth is expected to exceed the Australia market average.
Annual Growth Rates Comparison
Raw Data
ASX:REH Future Growth Rates Data Sources
Data Point Source Value (per year)
ASX:REH Future Earnings per Share Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 1 Analysts 13.6%
ASX:REH Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 1 Analysts 17.9%
Australia Trade Distributors Industry Earnings Growth Rate Market Cap Weighted Average 25.6%
Australia Trade Distributors Industry Revenue Growth Rate Market Cap Weighted Average 12.3%
Australia Market Earnings Growth Rate Market Cap Weighted Average 6.9%
Australia Market Revenue Growth Rate Market Cap Weighted Average 3.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
ASX:REH Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 1 Analyst Estimates (S&P Global) See Below
All numbers in AUD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
ASX:REH Future Estimates Data
Date (Data in AUD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-06-30
2020-06-30 5,603 1
2019-06-30 5,420 1
ASX:REH Past Financials Data
Date (Data in AUD Millions) Revenue Cash Flow Net Income *
2018-12-31 4,074 139 217
2018-09-30 3,382 160 221
2018-06-30 2,689 181 225
2018-03-31 2,620 204 223
2017-12-31 2,551 228 221
2017-09-30 2,490 221 217
2017-06-30 2,429 215 212
2017-03-31 2,388 195 205
2016-12-31 2,346 175 198
2016-09-30 2,311 182 195
2016-06-30 2,276 190 192
2016-03-31 2,226 193 184

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Reece's earnings are expected to grow by 13.6% yearly, however this is not considered high growth (20% yearly).
  • Reece's revenue is expected to grow by 17.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
ASX:REH Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 1 Analyst Estimates (S&P Global) See Below

All data from Reece Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:REH Future Estimates Data
Date (Data in AUD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-06-30
2020-06-30 0.50 0.50 0.50 1.00
2019-06-30 0.47 0.47 0.47 1.00
ASX:REH Past Financials Data
Date (Data in AUD Millions) EPS *
2018-12-31 0.41
2018-09-30 0.43
2018-06-30 0.45
2018-03-31 0.45
2017-12-31 0.44
2017-09-30 0.43
2017-06-30 0.43
2017-03-31 0.41
2016-12-31 0.40
2016-09-30 0.39
2016-06-30 0.39
2016-03-31 0.37

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if Reece will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
X
Future performance checks
We assess Reece's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Australia market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Australia market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Reece has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Reece performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Reece's growth in the last year to its industry (Trade Distributors).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Reece's year on year earnings growth rate has been positive over the past 5 years.
  • Reece's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Reece's 1-year earnings growth is negative, it can't be compared to the AU Trade Distributors industry average.
Earnings and Revenue History
Reece's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Reece Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:REH Past Revenue, Cash Flow and Net Income Data
Date (Data in AUD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 4,074.48 216.64 497.29
2018-09-30 3,381.53 220.63 420.81
2018-06-30 2,688.58 224.62 344.33
2018-03-31 2,619.75 222.99 333.85
2017-12-31 2,550.93 221.36 323.37
2017-09-30 2,490.12 216.58 315.59
2017-06-30 2,429.31 211.79 307.81
2017-03-31 2,387.61 205.12 301.46
2016-12-31 2,345.90 198.45 295.11
2016-09-30 2,311.13 195.33 289.43
2016-06-30 2,276.35 192.22 283.75
2016-03-31 2,226.31 183.71 282.26
2015-12-31 2,176.26 175.20 280.78
2015-09-30 2,130.70 170.38 277.79
2015-06-30 2,085.13 165.56 274.80
2015-03-31 2,035.28 154.64 261.86
2014-12-31 1,985.43 143.71 248.92
2014-09-30 1,880.65 133.37 236.39
2014-06-30 1,775.88 123.03 223.86
2014-03-31 1,685.19 123.41 211.07
2013-12-31 1,594.51 123.79 198.27
2013-09-30 1,564.69 121.46 195.25
2013-06-30 1,534.88 119.13 192.22
2013-03-31 1,524.73 114.74 191.73
2012-12-31 1,514.57 110.34 191.24
2012-09-30 1,516.54 111.81 191.69
2012-06-30 1,518.51 113.28 192.14

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Reece has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Reece used its assets less efficiently than the AU Trade Distributors industry average last year based on Return on Assets.
  • Reece's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Reece's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Trade Distributors industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Reece has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Reece's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Reece's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Reece is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Reece's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Reece's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 1.1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Reece Company Filings, last reported 4 months ago.

ASX:REH Past Debt and Equity Data
Date (Data in AUD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 1,964.17 1,694.60 99.28
2018-09-30 1,964.17 1,694.60 99.28
2018-06-30 1,880.84 0.00 539.89
2018-03-31 1,880.84 0.00 539.89
2017-12-31 1,191.14 100.00 50.26
2017-09-30 1,191.14 100.00 50.26
2017-06-30 1,158.30 100.00 101.81
2017-03-31 1,158.30 100.00 101.81
2016-12-31 1,076.53 120.00 55.78
2016-09-30 1,076.53 120.00 55.78
2016-06-30 1,041.03 145.00 105.12
2016-03-31 1,041.03 145.00 105.12
2015-12-31 965.27 165.00 73.45
2015-09-30 965.27 165.00 73.45
2015-06-30 926.21 175.12 85.02
2015-03-31 926.21 175.12 85.02
2014-12-31 865.67 194.11 55.10
2014-09-30 865.67 194.11 55.10
2014-06-30 826.97 204.78 73.76
2014-03-31 826.97 204.78 73.76
2013-12-31 785.32 9.59 145.61
2013-09-30 785.32 9.59 145.61
2013-06-30 765.83 8.89 156.23
2013-03-31 765.83 8.89 156.23
2012-12-31 722.13 7.67 134.77
2012-09-30 722.13 7.67 134.77
2012-06-30 706.95 9.02 166.76
  • Reece's level of debt (86.3%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (1.5% vs 86.3% today).
  • Debt is not well covered by operating cash flow (8.2%, less than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 8.9x coverage).
X
Financial health checks
We assess Reece's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Reece has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Reece's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2%
Current annual income from Reece dividends. Estimated to be 2.38% next year.
If you bought A$2,000 of Reece shares you are expected to receive A$40 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Reece's pays a lower dividend yield than the bottom 25% of dividend payers in Australia (2.65%).
  • Reece's dividend is below the markets top 25% of dividend payers in Australia (5.83%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
ASX:REH Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 1 Analyst Estimates (S&P Global) See Below
Australia Trade Distributors Industry Average Dividend Yield Market Cap Weighted Average of 5 Stocks 2.1%
Australia Market Average Dividend Yield Market Cap Weighted Average of 415 Stocks 4.3%
Australia Minimum Threshold Dividend Yield 10th Percentile 1.5%
Australia Bottom 25% Dividend Yield 25th Percentile 2.6%
Australia Top 25% Dividend Yield 75th Percentile 5.8%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

ASX:REH Future Dividends Estimate Data
Date (Data in A$) Dividend per Share (annual) Avg. No. Analysts
2021-06-30 0.28 1.00
2020-06-30 0.24 2.00
2019-06-30 0.23 2.00
ASX:REH Past Annualized Dividends Data
Date (Data in A$) Dividend per share (annual) Avg. Yield (%)
2019-02-28 0.203 2.010
2018-08-30 0.203 1.933
2018-02-22 0.202 1.742
2017-08-31 0.200 2.193
2017-02-23 0.188 2.269
2016-08-25 0.184 2.088
2015-08-28 0.152 2.167
2015-02-27 0.132 1.930
2014-08-28 0.128 1.975
2013-08-29 0.124 2.082
2013-02-28 0.122 2.594
2012-08-30 0.122 2.838
2012-02-23 0.122 3.312
2011-08-25 0.122 3.262
2011-02-24 0.118 2.789
2010-08-30 0.116 2.587
2010-02-25 0.106 2.166
2009-08-27 0.102 2.164

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Reece's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (2x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.1x coverage).
X
Income/ dividend checks
We assess Reece's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.5%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Reece afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Reece has a total score of 4/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Reece's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Peter Wilson
COMPENSATION A$5,135,006
AGE 50
TENURE AS CEO 11.3 years
CEO Bio

Mr. Peter J. Wilson, B.Comm (Melb), FAIM, is Chief Executive Officer and Managing Director of Reece Limited (formerly known as Reece Australia Limited) since January 1, 2008, the start of a significant organic and acquisition-led growth period for the Reece Group into new industries and throughout Australia and New Zealand. Mr. Wilson served as General Manager of Operations of Reece Limited since 2002 until 2004 and as its Chief Operating Officer from October 2005 to 2007. He has been an Executive Director of Reece Limited since 1997. He has more than 25 years’ experience working with Reece, commencing his career in branch before being appointed Marketing Manager. He holds B.Comm (Melbourne), FAIM.

CEO Compensation
  • Peter's compensation has increased by more than 20% in the past year.
  • Peter's remuneration is higher than average for companies of similar size in Australia.
Management Team Tenure

Average tenure and age of the Reece management team in years:

2.5
Average Tenure
50
Average Age
  • The tenure for the Reece management team is about average.
Management Team

Leslie Wilson

TITLE
Executive Chairman
COMPENSATION
A$1M
AGE
77

Peter Wilson

TITLE
CEO, MD & Executive Director
COMPENSATION
A$5M
AGE
50
TENURE
11.3 yrs

Gavin Street

TITLE
CFO & Company Secretary
COMPENSATION
A$1M
AGE
49
TENURE
0.8 yrs

Adrian Palumbo

TITLE
Chief Marketing & Supply Officer
COMPENSATION
A$827K
TENURE
2.5 yrs
Board of Directors Tenure

Average tenure and age of the Reece board of directors in years:

2.7
Average Tenure
49.5
Average Age
  • The average tenure for the Reece board of directors is less than 3 years, this suggests a new board.
Board of Directors

Leslie Wilson

TITLE
Executive Chairman
COMPENSATION
A$1M
AGE
77
TENURE
18.3 yrs

Peter Wilson

TITLE
CEO, MD & Executive Director
COMPENSATION
A$5M
AGE
50
TENURE
22.3 yrs

Tim Poole

TITLE
Non-Executive Director
COMPENSATION
A$125K
AGE
49
TENURE
2.8 yrs

Bruce Wilson

TITLE
Non-Executive Director
COMPENSATION
A$90K
AGE
43
TENURE
2.7 yrs

Megan Quinn

TITLE
Non-Executive Director
COMPENSATION
A$104K
AGE
53
TENURE
1.7 yrs

Georgina Williams

TITLE
Non-Executive Director
COMPENSATION
A$104K
TENURE
1.7 yrs

Andrew Wilson

TITLE
Non-Executive Director
AGE
45
TENURE
0.7 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (A$) Value (A$)
06. Mar 19 Sell Perpetual Limited Company 07. Dec 18 04. Mar 19 -8,803,359 A$10.24 A$-90,174,311
06. Mar 19 Buy Perpetual Limited Company 11. Sep 18 28. Feb 19 4,042,799 A$9.99 A$40,403,807
10. Sep 18 Sell Perpetual Limited Company 26. Jun 18 06. Sep 18 -5,639,422 A$12.38 A$-69,841,942
26. Jun 18 Sell Perpetual Limited Company 02. Nov 17 22. Jun 18 -14,906,593 A$20.73 A$-308,993,875
05. Jun 18 Buy Ronald Pitcher Individual 30. May 18 30. May 18 19,774 A$9.30 A$183,898
05. Jun 18 Buy Timothy Poole Individual 30. May 18 30. May 18 924 A$9.30 A$8,593
04. Jun 18 Buy Bruce Walter Wilson Individual 30. May 18 30. May 18 2,150,538 A$9.30 A$20,000,003
01. Jun 18 Buy John Wilson Individual 30. May 18 30. May 18 14,953,764 A$9.30 A$139,070,000
01. Jun 18 Buy Bruce Walter Wilson Individual 30. May 18 30. May 18 100,000 A$9.30 A$930,000
X
Management checks
We assess Reece's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Reece has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Should You Be Tempted To Sell Reece Limited (ASX:REH) Because Of Its P/E Ratio?

The formula for P/E is: Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS) Or for Reece: P/E of 24.94 = A$10.1 ÷ A$0.41 (Based on the trailing twelve months to December 2018.) Is A High Price-to-Earnings Ratio Good? … The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. … How Growth Rates Impact P/E Ratios P/E ratios primarily reflect market expectations around earnings growth rates.

Simply Wall St -

Taking A Look At Reece Limited's (ASX:REH) ROE

This article is for those who would like to learn about Return On Equity (ROE). … One way to conceptualize this, is that for each A$1 of shareholders' equity it has, the company made A$0.11 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Have Insiders Been Buying Reece Limited (ASX:REH) Shares?

We often see insiders buying up shares in companies that perform well over the long term. … Happily, the Reece insiders decided to buy shares at close to current prices. … While Reece insiders bought shares last year, they didn't sell

Simply Wall St -

Could Reece Limited's (ASX:REH) Investor Composition Influence The Stock Price?

Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. … So it's nice to see some insider ownership, because it may suggest that management is owner-oriented. … Taking a look at our data on the ownership groups (below), it's seems that.

Simply Wall St -

The Reece (ASX:REH) Share Price Has Gained 63% And Shareholders Are Hoping For More

For example, the Reece Limited (ASX:REH) share price is up 63% in the last 5 years, clearly besting than the market return of around 4.7% (ignoring dividends). … In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. … One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Simply Wall St -

Is Reece Limited's (ASX:REH) Balance Sheet A Threat To Its Future?

Today we will look at REH’s financial liquidity and debt levels, which are strong indicators for whether the company can weather economic downturns or fund strategic acquisitions for future growth. … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself. … REH’s Debt (And Cash Flows)

Simply Wall St -

Interested In Reece Limited (ASX:REH)’s Upcoming AU$0.06 Dividend? You Have 3 Days Left

On the 28 March 2019, Reece Limited (ASX:REH) will be paying shareholders an upcoming dividend amount of AU$0.06 per share. … Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? … When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:?

Simply Wall St -

Is Reece Limited's (ASX:REH) CEO Being Overpaid?

This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … How Does Peter Wilson's Compensation Compare With Similar Sized Companies. … At the time of writing our data says that Reece Limited has a market cap of AU$5.8b, and is paying total annual CEO compensation of AU$5.1m.

Simply Wall St -

How Does Reece Limited's (ASX:REH) Earnings Growth Stack Up Against Industry Performance?

When Reece Limited (ASX:REH) announced its most recent earnings (30 June 2018), I did two things: looked at its past earnings track record, then look at what is happening in the industry. … REH's trailing twelve-month earnings (from 30 June 2018) of AU$225m has … However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 14%, indicating the rate at which REH is growing has slowed down.

Simply Wall St -

Despite Its High P/E Ratio, Is Reece Limited (ASX:REH) Still Undervalued?

The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). … That is equivalent to an earnings yield of about 4.4%. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)

Simply Wall St -

Company Info

Description

Reece Limited engages in importing, wholesaling, distributing, marketing, and retailing plumbing, bathroom, heating, ventilation, air-conditioning, and refrigeration products in Australia and New Zealand. It also provides specialized services; and supplies plumbing and bathroom products to volume home builders and commercial developers, as well as specialized products and services for irrigation contractors, landscape designers, pool builders, and home owners. In addition, the company offers specialized products and services for civil construction works, including water mains, sewerage, drainage, fire services, gas mains, and telecommunications; and specialized equipment, parts, and supplies for the commercial heating, ventilation, air conditioning, and refrigeration industries. It serves customers in the trade, retail, professional, and commercial markets through its approximately 615 stores. The company was formerly known as Reece Australia Limited and changed its name to Reece Limited in November 2015. Reece Limited was founded in 1919 and is based in Burwood, Australia.

Details
Name: Reece Limited
REH
Exchange: ASX
Founded: 1919
A$5,664,310,835
560,822,855
Website: http://www.reecegroup.com.au
Address: Reece Limited
118 Burwood Highway,
Burwood,
Victoria, 3125,
Australia
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
ASX REH Ordinary Shares Australian Securities Exchange AU AUD 02. Jan 1992
OTCPK REEC.F Ordinary Shares Pink Sheets LLC US USD 02. Jan 1992
Number of employees
Current staff
Staff numbers
0
Reece employees.
Industry
Trading Companies and Distributors
Capital Goods
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/19 10:31
End of day share price update: 2019/05/17 00:00
Last estimates confirmation: 2019/03/08
Last earnings filing: 2019/02/28
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/06/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.