Reliance Worldwide Corporation (ASX: RWC) – RWC Reports FY26 Full Year Results

Reliance Worldwide Corporation has received an unsolicited, non-binding takeover proposal from Brookfield Capital Partners LLC valuing the company at A$4.75 per share. In response to this offer, the RWC board has suspended dividend payments despite reporting adjusted net profit after tax of US$125.1 million for the financial year ended 30 June 2026. The move signals management’s desire to preserve cash while evaluating the acquisition proposal and reflects significant underlying operational challenges facing the plumbing and water products manufacturer.

The adjusted profit result, which removes one-off charges of US$103.3 million related to restructuring of Asia-Pacific metals manufacturing operations, declined 15.3 percent compared with the prior year. This decline was driven by multiple headwinds including escalating US tariffs, higher copper costs, and softer demand across the United States and United Kingdom markets. Adjusted earnings before interest, tax, depreciation and amortisation fell 12.8 percent to US$242.1 million, with the adjusted EBITDA margin contracting to 18.5 percent from 21.1 percent in the prior corresponding period. These margin pressures suggest RWC is struggling to offset cost inflation through price increases despite implementing mitigation actions worth monitoring in coming quarters.

The reported net profit of US$6.3 million was heavily suppressed by restructuring charges, principally related to closure of manufacturing and distribution sites in the Asia-Pacific region, fixed asset impairments and inventory write-offs. The restructuring underscores management’s acknowledgment that the company’s manufacturing footprint requires significant rationalisation to remain competitive in a challenging operating environment. Meanwhile, RWC generated US$263.4 million in operating cash flow, resulting in operating cash flow conversion of 108.8 percent of adjusted EBITDA, well above the prior year’s 97.6 percent. This strong cash generation supported a reduction in net debt of US$88.2 million to US$243.4 million, with the net debt to EBITDA ratio improving to 1.1 times from 1.3 times.

The cash generation capability and improved balance sheet position provide RWC with flexibility as it navigates the Brookfield proposal. Adjusted net sales of US$1,305.6 million remained essentially flat year-on-year, declining 0.7 percent in reported terms, with adjusted growth of just 1.5 percent in constant currency after accounting for tariff impacts and product line exits. This stalled top-line growth combined with significant margin compression raises questions about the company’s ability to sustain current profitability levels if tariff pressures persist and demand does not recover in key markets. The key developments to monitor include whether Brookfield proceeds with a formal binding offer, shareholder response to the proposal, and whether the company demonstrates margin stabilisation in coming quarters independent of any acquisition process.

This announcement has been classified as price sensitive information by the ASX.

View the full ASX announcement (PDF)

About Reliance Worldwide Corporation Limited (ASX: RWC)

Reliance Worldwide Corporation Limited designs and manufactures branded plumbing and heating products for global markets, specializing in water flow, control, and monitoring solutions. The company produces brass fittings, push-to-connect fitting systems, pipes, tubing, and plumbing valves sold under brands including JG Speedfit, HoldRite, and SharkBite. It operates manufacturing and distribution facilities across North America, Europe, and Asia-Pacific regions.

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