# Reece (REH.AU)

Canonical: https://gigainvestors.com/s/REH.AU

Analysis as of: 2026-10-16T07:36:37.295Z. Financial observations: FY1997–FY2026.

Listing currency: AUD. Reporting currency: AUD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: AUD 16.88 per share; close as of 2026-10-15.

Estimated value: low AUD 6.22 per share, central AUD 7.35 per share, high AUD 8.52 per share. Buy at or below the central value AUD 7.35 per share. Valuation as of 2026-10-16T07:36:37.295Z; scenarios are not confidence intervals.

Expected annual return: 6.0% at the stated quote. About 6.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; AU 10-year bond 5.2% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.37×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.12×

- FY2019: 0.07×

- FY2020: 0.07×

- FY2021: 0.08×

- FY2022: 0.07×

- FY2023: 0.08×

- FY2024: 0.07×

- FY2025: 0.02×

- FY2026: 0.06×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 12.2%

- ROIC, second-lowest year: 9.4%

- Typical minus recent gross margin: -0.2 pp

- Typical gross margin (annual median): 28.4%

- Recent gross margin (lower of latest and 3-year median): 28.6%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.3%

- ROIC including acquisitions, ten-year median: 5.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 21.5%

- FY2018: 19.3%

- FY2019: 12.1%

- FY2020: 10.9%

- FY2021: 13.4%

- FY2022: 12.0%

- FY2023: 12.3%

- FY2024: 12.4%

- FY2025: 3.3%

- FY2026: 9.4%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.76×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: AUD 1.4B

- Net income, five-year total: AUD 1.8B

- Return on incremental invested capital: 22.5%

- Working capital / revenue, annual change: 0.2 pp

- Working capital / revenue, change between three-year averages: 0.8 pp

- Working capital / revenue, final three-year average: 22.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.73×

- FY2023: 0.84×

- FY2024: 0.75×

- FY2025: 0.60×

- FY2026: 0.90×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 19.3% vs 9.4%

- Per-share earnings: 0.40 to 0.51 (three-year endpoint medians)

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.1%

- Ordinary dilution, 5-year annual growth: -1.0%

- Market cap gain: AUD 6.4B

- Cumulative retained earnings: AUD 1.7B

- Diluted shares, 10-year annual growth: 2.1%

- Diluted shares, 5-year annual growth: -1.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 2.9%

- Per-share value change: AUD 0.10

- Per-share value, starting three-year median: AUD 0.40

- Per-share value, ending three-year median: AUD 0.51

- Buybacks concentrated in cheaper years (correlation): 0.20

- Average buyback yield: 4.0%

- Buyback history: 5 years

- Debt-funded buybacks: Yes

- Acquisition spending: AUD 3.7B

- Cumulative net income, 10 years: AUD 3.0B

- ROIC, first three-year median: 19.3%

- ROIC, last three-year median: 9.4%

Chart: Earnings per share; fiscal year observations.

- FY2017: AUD 0.42

- FY2018: AUD 0.40

- FY2019: AUD 0.36

- FY2020: AUD 0.35

- FY2021: AUD 0.44

- FY2022: AUD 0.61

- FY2023: AUD 0.60

- FY2024: AUD 0.65

- FY2025: AUD 0.51

- FY2026: AUD 0.50

### accounting: pass

- Sloan accruals: -4.4%

- Receivables to sales index (DSRI): 1.06×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.09×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.50×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -0.2%

- FY2018: 1.9%

- FY2019: -1.2%

- FY2020: -5.9%

- FY2021: -1.1%

- FY2022: 2.6%

- FY2023: -5.5%

- FY2024: -4.7%

- FY2025: -3.8%

- FY2026: -4.4%

## Holders

## Price story

Down 41% since Sep 2024 · sales +4.5%

Story as of 2026-10-16T10:00:07.788Z; price observation 2026-10-15.

Price needs cash profits to grow 12.7% a year for ten years

### Sales · FY2025–2026

sales +4.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: AUD 2.4B 

- FY2018: AUD 2.7B 

- FY2019: AUD 5.5B 

- FY2020: AUD 6.0B 

- FY2021: AUD 6.3B 

- FY2022: AUD 7.7B 

- FY2023: AUD 8.8B 

- FY2024: AUD 9.1B 

- FY2025: AUD 9.0B 

- FY2026: AUD 9.4B 

### Gross margin · FY2026

gross margin 28.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: 33.3% 

- FY2018: 33.1% 

- FY2019: 14.2% 

- FY2020: 12.3% 

- FY2021: 12.7% 

- FY2022: 27.9% 

- FY2023: 28.4% 

- FY2024: 28.6% 

- FY2025: 28.5% 

- FY2026: 28.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in industrial distribution; annual sales are AUD 9.4 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2026: revenue 9378431000; grossProfit 2714606000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); REH.AU: Reece Limited engages in the distribution of plumbing, waterworks, heating, ventilation, air-conditioning, and refrigeration products to commercial and residential customers in Australia, New Zealand, and the United States. The company offers bathroom products, such as tapware and accessories, vanities and furniture, showers, toilets, basins, bathroom appliances, and baths and spas; kitchen and laundry products, including tapware, sinks and troughs, accessories, commercial kitchen and laundry tapware, and kitchen appliances; and heating and cooling products comprising heating and cooling units, ducted air conditioning, split system air conditioning, evaporative cooling, gas ducted heating, and multi split air conditioning. It also provides hot water systems; pool and spa care equipment; garden products, which include irrigation, landscape, garden lighting, and lawn care; and civil products, such as pipe and fittings, valves, sewer and drainage, electrical pipe and fittings, and water tanks. The company serves customers in the trade, retail, commercial, and infrastructure markets. The company was formerly known as Reece Australia Limited and changed its name to Reece Limited in November 2015. Reece Limited was founded in 1920 and is based in Cremorne, Australia.

### Why customers stay

Margins ranged from 28.5% to 28.9% during 2024–26; it earns 12.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2024: grossProfit / revenue = 28.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2025: grossProfit / revenue = 28.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2026: grossProfit / revenue = 28.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); 10-year return on capital observations [[2017,0.21528035441073623],[2018,0.192820333745266],[2019,0.12108008838292435],[2020,0.10924127779714932],[2021,0.13397421165426188],[2022,0.11994864676073277],[2023,0.12275467986586755],[2024,0.12445334072413958],[2025,0.032555452364082346],[2026,0.09374979970445377]]; median 0.12191738412439596. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back AUD 400.7 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2017: growth capex 36398709.164686464; upkeep 58484290.835313536; owner earnings 203262709.16468647. Growth capex / owner earnings = 0.17907224258826387.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2018: growth capex 34397000; upkeep 53847000; owner earnings 224620000. Growth capex / owner earnings = 0.15313418217433888.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2019: growth capex 0; upkeep 99199000; owner earnings 230973000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2020: growth capex 0; upkeep 110764000; owner earnings 207549400. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2021: growth capex 0; upkeep 72639000; owner earnings 306451000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2022: growth capex 0; upkeep 200106000; owner earnings 288044000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2023: growth capex 0; upkeep 177478000; owner earnings 327178600. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2024: growth capex 0; upkeep 236310000; owner earnings 313682800. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2025: growth capex 0; upkeep 258382000; owner earnings 189775200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2026: growth capex 0; upkeep 162684000; owner earnings 276347200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); Dividend observations: [[2017,93624000],[2018,100596000],[2019,113566000],[2020,113566000],[2021,77518000],[2022,125966000],[2023,148577000],[2024,161496000],[2025,156651000],[2026,110075000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); FY2026: cash repurchases 400689000 AUD.

### Are managers owners

Insiders own 61.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); REH.AU SharesStats.PercentInsiders = 61.821000000000005 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 12.7% yearly over ten years; actual growth was 1.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:37.295Z); Ten-year compound average after fade. Initial solved rate 0.17026662772806433. Price 16.88; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.38584742989856896 → FY2026 0.44927783160893003. Closing-price date 2026-10-15.

## Monthly share-price history (AUD per share)

- 2016-10: AUD 8.80 per share

- 2016-11: AUD 8.90 per share

- 2016-12: AUD 8.97 per share

- 2017-01: AUD 8.91 per share

- 2017-02: AUD 8.60 per share

- 2017-03: AUD 8.19 per share

- 2017-04: AUD 8.18 per share

- 2017-05: AUD 8.10 per share

- 2017-06: AUD 8.40 per share

- 2017-07: AUD 8.46 per share

- 2017-08: AUD 8.45 per share

- 2017-09: AUD 8.57 per share

- 2017-10: AUD 8.86 per share

- 2017-11: AUD 9.60 per share

- 2017-12: AUD 9.63 per share

- 2018-01: AUD 9.54 per share

- 2018-02: AUD 10.09 per share

- 2018-03: AUD 10.72 per share

- 2018-04: AUD 10.60 per share

- 2018-05: AUD 11.89 per share

- 2018-06: AUD 12.65 per share

- 2018-07: AUD 12.24 per share

- 2018-08: AUD 12.57 per share

- 2018-09: AUD 11.33 per share

- 2018-10: AUD 10.39 per share

- 2018-11: AUD 10.19 per share

- 2018-12: AUD 9.95 per share

- 2019-01: AUD 9.94 per share

- 2019-02: AUD 10.44 per share

- 2019-03: AUD 9.86 per share

- 2019-04: AUD 10.32 per share

- 2019-05: AUD 10.38 per share

- 2019-06: AUD 9.76 per share

- 2019-07: AUD 10.53 per share

- 2019-08: AUD 9.96 per share

- 2019-09: AUD 10.84 per share

- 2019-10: AUD 10.37 per share

- 2019-11: AUD 10.32 per share

- 2019-12: AUD 11.46 per share

- 2020-01: AUD 11.13 per share

- 2020-02: AUD 11.50 per share

- 2020-03: AUD 9.10 per share

- 2020-04: AUD 8.83 per share

- 2020-05: AUD 9.06 per share

- 2020-06: AUD 9.19 per share

- 2020-07: AUD 9.99 per share

- 2020-08: AUD 12.20 per share

- 2020-09: AUD 12.95 per share

- 2020-10: AUD 13.70 per share

- 2020-11: AUD 13.52 per share

- 2020-12: AUD 14.80 per share

- 2021-01: AUD 16.01 per share

- 2021-02: AUD 16.20 per share

- 2021-03: AUD 17.14 per share

- 2021-04: AUD 20.27 per share

- 2021-05: AUD 20.48 per share

- 2021-06: AUD 23.61 per share

- 2021-07: AUD 23.51 per share

- 2021-08: AUD 20.88 per share

- 2021-09: AUD 19.13 per share

- 2021-10: AUD 19.89 per share

- 2021-11: AUD 23.42 per share

- 2021-12: AUD 27.03 per share

- 2022-01: AUD 21.74 per share

- 2022-02: AUD 19.37 per share

- 2022-03: AUD 19.06 per share

- 2022-04: AUD 17.51 per share

- 2022-05: AUD 16.03 per share

- 2022-06: AUD 13.78 per share

- 2022-07: AUD 15.23 per share

- 2022-08: AUD 16.01 per share

- 2022-09: AUD 14.02 per share

- 2022-10: AUD 15.53 per share

- 2022-11: AUD 15.34 per share

- 2022-12: AUD 14.15 per share

- 2023-01: AUD 16.09 per share

- 2023-02: AUD 16.54 per share

- 2023-03: AUD 17.35 per share

- 2023-04: AUD 18.23 per share

- 2023-05: AUD 18.16 per share

- 2023-06: AUD 18.57 per share

- 2023-07: AUD 19.60 per share

- 2023-08: AUD 20.40 per share

- 2023-09: AUD 18.63 per share

- 2023-10: AUD 17.46 per share

- 2023-11: AUD 19.34 per share

- 2023-12: AUD 22.39 per share

- 2024-01: AUD 22.78 per share

- 2024-02: AUD 26.87 per share

- 2024-03: AUD 28.10 per share

- 2024-04: AUD 27.85 per share

- 2024-05: AUD 25.96 per share

- 2024-06: AUD 25.17 per share

- 2024-07: AUD 27.64 per share

- 2024-08: AUD 27.34 per share

- 2024-09: AUD 28.50 per share

- 2024-10: AUD 22.81 per share

- 2024-11: AUD 25.74 per share

- 2024-12: AUD 22.38 per share

- 2025-01: AUD 23.90 per share

- 2025-02: AUD 17.25 per share

- 2025-03: AUD 15.68 per share

- 2025-04: AUD 15.77 per share

- 2025-05: AUD 15.66 per share

- 2025-06: AUD 14.35 per share

- 2025-07: AUD 13.60 per share

- 2025-08: AUD 11.16 per share

- 2025-09: AUD 11.29 per share

- 2025-10: AUD 11.69 per share

- 2025-11: AUD 12.71 per share

- 2025-12: AUD 13.40 per share

- 2026-01: AUD 14.80 per share

- 2026-02: AUD 15.66 per share

- 2026-03: AUD 13.26 per share

- 2026-04: AUD 13.71 per share

- 2026-05: AUD 13.80 per share

- 2026-06: AUD 17.23 per share

- 2026-07: AUD 16.09 per share

- 2026-08: AUD 16.83 per share

- 2026-09: AUD 16.96 per share

- 2026-10: AUD 17.16 per share

## Annual estimated value (AUD per share)

- FY2017: low AUD 4.98 per share, central AUD 6.53 per share, high AUD 7.62 per share

- FY2018: low AUD 5.83 per share, central AUD 7.31 per share, high AUD 8.40 per share

- FY2019: low AUD 10.55 per share, central AUD 14.40 per share, high AUD 16.87 per share

- FY2020: low AUD 10.87 per share, central AUD 13.53 per share, high AUD 15.58 per share

- FY2021: low AUD 6.93 per share, central AUD 8.62 per share, high AUD 9.89 per share

- FY2022: low AUD 6.43 per share, central AUD 8.49 per share, high AUD 9.92 per share

- FY2023: low AUD 6.91 per share, central AUD 9.19 per share, high AUD 10.72 per share

- FY2024: low AUD 6.90 per share, central AUD 9.15 per share, high AUD 10.68 per share

- FY2025: low AUD 5.95 per share, central AUD 6.74 per share, high AUD 7.81 per share

- FY2026: low AUD 6.22 per share, central AUD 7.35 per share, high AUD 8.52 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:42:17.804Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.