Reliance Worldwide (ASX:RWC)
Give it is almost end of financial year, I though I would go through some of the stocks in my portfolio and outline what I would like to see from them in their FY24 annual report, what guidance the companies have given, and what to expect.
First up is Reliance Worldwide (ASX:RWC), at the start on May 2024 RWC reaffirmed forward guidance they had given in their HY24 report back in February 2024.
RWC’s HY24 guidance
Consolidated Group
Consolidated group revenues are expected to be down by low to mid-single digit percentage points compared with pcp. This guidance excludes any contribution from Holman Industries in FY24.
RWC is continuing to target stable operating margins for the full year compared with FY23, with the impact of lower volumes on operating margins to be offset by cost savings.
Operating cash flow conversion in the second half is expected to be above 90% for the period.
Americas
Sales in the Americas are expected to be broadly in line with the pcp, after adjusting for the impact on sales of the closure of Supply Smart.
Operating margins are expected to be higher than for FY23 and consistent with HY24, following the progressive transfer of some SharkBite manufacturing and assembly from Australia to the US.
APAC
APAC external sales, excluding the contribution from Holman Industries, are expected to be down by low single digits.
Intercompany sales will be significantly lower in FY24 following the transfer of some SharkBite Max production to the US.
Operating margins in FY24, excluding the contribution from Holman Industries, are expected to be around one third lower than in FY23 due to lower demand in the Australian market, along with the major changes in manufacturing orientation away from exports to the US.
As disclosed at the time of the acquisition, Holman’s earnings are weighted to the first half of the financial year and therefore are not expected to make a material contribution to FY24 earnings.
EMEA
External sales in local currency are expected to be down by low double-digit percentage points in FY24 versus pcp, consistent with the first half of FY24. Operating margins are also expected to be lower than pcp.
Key Points and Takeaways
RWC report in US$, all $ figures are in US$ unless stated otherwise
RWC reported net sales of $1.24bn in FY23,…
