# RWC - Reliance Worldwide Corporation



## System (13 April 2016)

Reliance Worldwide Corporation is a global provider of water control systems and plumbing solutions for domestic, commercial and industrial applications. Reliance Worldwide Australia is headquartered in Brisbane, and has nationwide presence with operations in Melbourne, Sydney and Perth.

It is anticipated that RWC will list on the ASX on 29 April 2016.

http://www.rwc.com


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## mcgrath111 (23 February 2017)

Starting to have a look at RWC, particularly after HY results were released.
Earnings increasing, debt decreasing and a div being announced. I've also recently seen CGF (Who I keep a keen eye on to see what they're buying selling) and MAQ jumping on board.
Interested to see others thoughts in the company.
On a lazy note, I believe the PE to be around low 20's, which strikes me as pricey and I'm more of a bargain hunter by nature.
That being said the business seems to be solid and appears to have a competitve ad


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## greggles (28 May 2018)

Nice gap up for Reliance Worldwide Corporation today. 

They announced this morning that they have completed an Institutional Entitlement Offer that raised approximately $946 million at the offer price of $4.15 per new ordinary share, which will be used to partly fund the acquisition of John Guest Holdings Limited. 

RWC is currently trading at $5.39, up 18.20% on Friday's close.


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## peter2 (19 August 2018)

At new yearly highs and the monthly/weekly up trends are strong.


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## bigdog (13 May 2019)

*Today bad news reported by Motley*

*Why the Reliance Worldwide share price crashed 26% lower today*




James Mickleboro
Motley Fool 13 May 2019

It has been a disappointing start to the week for the *Reliance Worldwide Corporation Ltd* (ASX: RWC) share price.

In morning trade the plumbing parts company’s shares are down a whopping 26% to $3.40.

*Why is the Reliance Worldwide share price sinking lower?*
This morning Reliance Worldwide released a trading update and revised its guidance for FY 2019. As you might have guessed from the share price reaction, it wasn’t a positive revision.

According to the release, the company’s operating segments have been affected by market‐specific factors which are negatively impacting their performance and results.

This has led to management downgrading its full year EBITDA guidance from between $280 million and $290 million to between $260 million and $270 million.

*What happened?*
Whilst the company’s Americas business continues to achieve good underlying growth, two issues have restrained net sales in the second half of FY 2019.

One is the lack of a modest freeze event in the region. A modest freeze event is considered to be the average level occurrence of winter storms over a sustained period across the USA, causing cracked or broken pipes.

The company will usually benefit more from freeze events occurring in the southern parts of the USA than in the north‐east or mid‐west. This is because water pipes are generally not as well insulated in the south, which means a freeze event can cause these pipes to break.

Management estimates that the lack of a modest freeze event has reduced net sales by the order of $12 million to $15 million in FY 2019.

In addition to this, a number of its channel partners have pursued strategies in the second half of the financial year to actively reduce inventory on hand. As a result, net sales in this half are lower than expected, particularly in the Retail channel.

Management believes this is a timing issue due to these inventory strategies rather than a fundamental demand issue.

In the EMEA segment the company’s John Guest business is performing to expectations, but its core Reliance Worldwide businesses in the UK and Spain have not met expectation. This is largely due to a decision by management to exit certain product lines previously sold.

And finally, the APAC segment has also fallen short of expectations as a result of a sharper than forecast decline in new home construction in Australia.

Despite this disappointing performance, management continues to be pleased with how the business is positioned, its current trajectory, and the underlying performance across our core products and geographies.


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## So_Cynical (19 July 2019)

Impressive video, hard to like anything to do with construction at the moment, i will add this to a watchlist for later.
~


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## Smurf1976 (20 July 2019)

So_Cynical said:


> Impressive video, hard to like anything to do with construction at the moment



Agreed although I'll add that there's also an essential maintenance aspect to some of the company's products.

If a TPR valve goes well then it's either replace the valve or have cold showers until you do so there's an element to the business that's in maintenance as well as the construction aspect of sales.


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## peter2 (10 September 2019)

The RWC price chart is starting to look more bullish as price is now at resistance. Mgt did mention that the recent poor results were due to circumstances outside their control (no freeze event and inventory reduction by suppliers) and that there's no fundamental issues with the business. A cold winter in the US will make the shareholders happier. 
Note: The REH price chart is also looking bullish. 




For those of you who like more TA observations; 
Daily chart (on the right); 
RSC (XAO) on the top pane shows that RWC has been going up faster than the XAO index over the past few weeks (= someone's buying). 
TMF bottom pane: Above its zero line even when the price was going down (= someone's been accumulating RWC over the past three months).


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## So_Cynical (19 November 2019)

Has traded at $4 plus over the last couple of months, a nice bounce off the August lows of around $3.20, could go higher as the northern winter kicks off.


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## peter2 (2 December 2019)

Weather is obeying time honored seasonal pattern called "winter". 
Bullish up bar on RWC today.


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## Trav. (24 February 2020)

RWC down today a whopping 26.5%

I think that this section of the announcement triggered to collapse, is this an over reaction? Any fundamental guys care to comment?


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## peter2 (24 February 2020)

Didn't see that coming.


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## So_Cynical (24 February 2020)

I saw the drop and then went over the announcements and im like - WTF.

The numbers were good all things considered, the outlook was negative and that has to be to 
blame for the 26% fall, i'm guessing that people dont build houses or renovate in a pandemic?


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## mcgrath111 (26 March 2020)

So_Cynical said:


> I saw the drop and then went over the announcements and im like - WTF.
> 
> The numbers were good all things considered, the outlook was negative and that has to be to
> blame for the 26% fall, i'm guessing that people dont build houses or renovate in a pandemic?



The impact on the housing market is a big unknown...well everything is at the moment!

I really like RWC, I wanted to buy in at 2.80 a few years back, but it never hit and went like a rocket.

I think next month, I might have a dip...hoping for $1.40-1.50. Although, even now it's looking very tempting, it's a great company!


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## Trav. (10 May 2020)

RWC trending sideways at the moment and $2.8 appears to be the resistance level.

Some signs of life shown on Friday with a high of $2.59 before closing at $2.51 

There was an announcement on the 1/5 re Executives and Directors taking a temporary reduction in salary and fees due to COVID-19 plus some operation scale back

- In Australia, we have decided to scale back manufacturing operations from 5 days a week to 4 days
a week, commencing the week of 11 May 2020. Customer service and warehouse activities will
continue to operate on a 5 day per week basis

https://newswire.iguana2.com/af5f4d73c1a54a33/rwc.asx/3A540469/RWC_Update_on_operations​





holding for the time being


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## Boggo (10 May 2020)

I got caught with a few stock in my SMSF that jumped the stop on their way down.

RWC was the worst of those but I have been seeing some positive behaviour lately.

(click to expand)


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## Trav. (22 May 2020)

@Boggo what are your thoughts about RWC (Short / Medium term ) as it appears to be trending up nicely this week and heading for some resistance @ $2.80

Daily volume is low and all indicators looking good to me.

Any thoughts appreciated.

Cheers


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## Boggo (22 May 2020)

Trav. said:


> @Boggo what are your thoughts about RWC (Short / Medium term ) as it appears to be trending up nicely this week and heading for some resistance @ $2.80
> 
> Daily volume is low and all indicators looking good to me.
> 
> ...




Just a quick look at the weekly up to yesterdays data, went a bit higher today.

Will have a better look over the weekend but at the moment on the weekly it's through the first potential hurdle, next one may be around the $3.10 area.

I'm sure you are well aware that there are a lot of new influences on the markets in the current environment that can throw both fundamental and technical guides out the window.

(click to expand)


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## Trav. (22 May 2020)

@Boggo appreciate your response just interested in a alternate view as I can get a bit of tunnel vision some times.


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## Trav. (27 May 2020)

Another good day for RWC and closed at the $3 mark ( high of 3.01 ). It powered through $2.80 and resistance drawn at $3.12 where the small gap occurred (3.12 to 3.20). Holding


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## Trav. (27 May 2020)

Trav. said:


> resistance drawn at $3.12 where the small gap occurred (3.12 to 3.20). Holding




Broke through my resistance level to close @ $3.14 (high of $3.18), volume picking up and happy to continue to hold.


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## Boggo (27 May 2020)

Trav. said:


> Broke through my resistance level to close @ $3.14 (high of $3.18), volume picking up and happy to continue to hold.




I'm still in the red on this but holding on too.

Next area of potential decision.

(click to expand)


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## Trav. (27 May 2020)

I like the look of that last weekly bar. up 15%.

I was lucky enough to get in at $2.43 so looking at a nice winner here. But I'm sure that you will get back in the green soon enough.


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## Trav. (28 May 2020)

Interesting spike in volume today, maybe some profit taking ? or just the big boys shuffling some shares around.


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## Boggo (28 May 2020)

I'm still looking at it from a weekly view but the daily VSA is not saying nice things after today.

(click to expand)


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## Trav. (28 May 2020)

Yes I like Karthik Marar and reference his work often. 

We will need to watch for confirmation tomorrow but I think we can smell something fishy going on here. I was tempted to exit today but trying very hard to follow the system.....

Confirmation required - 

_A *wide spread down-bar that appears immediately after any up-thrust*, 
*tends to confirm the weakness* (the market makers are locking in traders into poor positions).
_​@Boggo are you using VPA V.3.0 or 4.0 ? as I am only getting the up-thrust signal on V.3.0


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## Boggo (28 May 2020)

Trav. said:


> Yes I like Karthik Marar and reference his work often.
> 
> We will need to watch for confirmation tomorrow but I think we can smell something fishy going on here. I was tempted to exit today but trying very hard to follow the system.....
> 
> ...




Looks like I may have to update, I'm still on Version 1.2 !


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## Trav. (4 June 2020)

Closed out my position on RWC today @ $3.29 as I've had a good run and resistance of $3.32 looks be holding at this stage anyway.

~35% gain over 1 month si very nice...so another couple of big fat rabbits for me.


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## Boggo (10 June 2020)

Follow on from here...
https://www.aussiestockforums.com/posts/1074355/

Touched the first potential resistance today and then the sellers moved in.

Based on recent run up to here I think (and hope ) it has more upside still.

(click to expand)


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## Dona Ferentes (26 August 2020)

Resilient American householders more inclined to tackle a plumbing job rather than call in a plumber helped offset a sharp fall in sales in Europe for Reliance Worldwide Corp during Covid.  Chief executive Heath Sharp said there was still high volatility in the market after a partial rebound in sales in July/ August, but making predictions about customer behaviour in the UK and Europe, in particular, was fraught. But buoyant results out of Reliance's US market helped trigger a 17 per cent surge in the share price [following release of FY results].

The US makes up about 50 per cent of the plumbing supplier's overall business and the impact of COVID19 that market was in stark contrast to Europe, which comprises about 35 per cent of the operations.

In the June half, sales in the Americas region jumped 19 per cent as plumbers headed to hardware stores to stock up on items they were having trouble sourcing from wholesalers, while DIY enthusiasts also spent up as they had a go at home plumbing jobs themselves.

But in the UK and Europe, sales fell 20 per cent because of harder lockdowns by the British government and ''cultural'' and licensing issues, which mean professional plumbers are virtually the only avenue for repairs and renovations. _There is more of a mindset in the United States to tackling those DIY projects_, Mr Sharp said. While there had been some pent up demand in the UK, there was still major uncertainty. _The UK business is not back to normal by any stretch_, he said.

Net profit fell 33 per cent to $89.4 million, even though net sales revenue rose 5 per cent to $1.16 billion. The company will pay a final dividend of 2.5¢, which is half the payout a year ago.

Reliance is also scrutinising its global supply chain and Mr Sharp said the company would rely less on output from China in the future. _



			"There's a lot to be said for making close to the market. We are looking globally at our supply chain and where we are making our products."
		
Click to expand...


_


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## Dona Ferentes (1 October 2020)

the self-reliance (pardon the pun) of home owners continues ..  up 10% to near pr-Covid trading.


_Sales are continuing to surge in its big northern hemisphere markets due to do-it-yourself repairs and renovations as people stay home during the pandemic._
_
Sales have been strongest in the Americas and Europe, the Middle East and Africa (EMEA) regions. Americas sales leapt 29 per cent in the month to September 25, and EMEA sales jumped 24 per cent compared with the previous consecutive period. The increases follow sales jumps in August in the two regions
_
_Australian-Pacific sales were up 4 per cent in September, compared with a 2 per cent drop in August_.



> "The first quarter of the 2021 financial year has been particularly strong from a sales perspective," said chief executive Heath Sharp said on Thursday ahead of an investor day. But he warned the company remained cautious about the future.
> 
> "Given the continuing uncertainties in all our markets as a result of COVID-19, we would caution against extrapolating the first quarter's sales performance for the full year."




The US has been boosted by a surge in DIY activity due to a shortage of plumbers and the return of construction activity to pre COVID-19 levels, but without further government stimulus this growth was likely to slow, Reliance said.

The company also expects some softening in the Australian market due to a drop in new housing construction approvals, which is expected to reduce building activity and has forecast a 10 per cent sales drop for 2021 with "a chance to be flat dependent on bounce back from COVID-19."


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## peter2 (22 February 2021)

*RWC* reported good and improving results. 






The severe cold weather in Texas has burst many water pipes. Texans will be heading to *RWC* to buy the Sharkbite fittings. 
I bought an initial position yesterday (before earnings) and added more today on the dip. The chart shows a two year resistance line near 5.00. That's the first hurdle to overcome for higher prices.


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## Dona Ferentes (27 April 2021)

and again... nice set of numbers. RWC got to 2+ year high but has given back the 5% morning lift

_Strong sales growth was recorded in all regions, reflecting buoyant demand for plumbing products,  driven by increased spending on residential repairs and remodelling in particular. A significant  weather freeze event in the US in February also boosted demand for plumbing supplies in the  quarter. We estimate that the impact of the freeze event accounted for over half of the sales  increase in the Americas (up 38%) for the quarter.  Sales in APAC (up 11%) were driven by continued strength in the residential new construction market in  Australia and growth in remodelling activity. Export sales to the Americas were up strongly.  _

However, cost pressures are emerging. So far, so good (but push back always happens).

_RWC is continuing to implement price rises for products which have seen sustained input cost increases, particularly brass products which have been impacted by higher copper and zinc costs.  We continue to expect to be able to pass on the impact of metal commodity and other cost  increases through price adjustments. Commercial confidentiality prevents us from elaborating further other than to re‐iterate that the process is progressing as expected_.  



> “_In terms of pricing increases, our largest OEM customers are on indexed pricing and therefore adjustments have already been made.  For our wholesale customers, we note that the market overall is moving a second time this year to pass through higher copper cost impacts.  “Pricing discussions with other channel partners are progressing and we remain confident of achieving acceptable cost recovery outcomes_”.


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## Dona Ferentes (24 August 2021)

_Reliance Worldwide _*has declined to provide 2021-22 guidance *_due to the ongoing uncertainty surrounding market conditions and any potential impacts of further COVID outbreaks.

Perhaps it wonders if the flood of assistance to home building and construction in many of its markets from governments and central banks might be overwhelmed this time by Covid Delta?

But the company has benefited from record low interest rates and support schemes such as Homebuilder in Australia, that sparked a surge in construction of new homes and renovations, and by the upturn in online sales that saw a surge in the construction of logistics facilities such as warehouses and depots.

RWC yesterday reported that it more than doubled full year profit on a much slower rise in revenue, enabling it to triple its final dividend payout after heightened home building and renovation activity during the pandemic helped it beat sales expectations.

Reliance reported that profit had more than doubled to $188.5 million on a 15.3% to $1.34 billion, a figure better than the market was forecasting.

Final dividend rose from 2.5 cents in 2019-20 to 7 cents per share, partially franked. With the 6 cents a share interim, the total for the year is 13 cents a share, almost double the 7 cents a share paid for 2019-20._

Investors focused on the CEO’s remarks about tougher trading conditions in recent weeks because of Covid, even though sales were up:


> CEO Heath Sharp said: “We experienced positive sales growth over the equivalent period in the prior year in all three regions with reported net sales in July up 9% overall and 6% on a constant currency basis.





> “The rate of growth was lower than for FY2021, reflecting very strong sales growth in the Americas at the start of FY2021 and the strong recovery in volumes experienced in the UK from July 2021 onwards. Australian sales maintained their growth momentum supported by growth in residential construction activity.





> “Underlying demand remains strong, but sales are being constrained by ongoing supply chain disruption including raw materials availability, shipping delays, and a shortage of labour in plumbing trades.”




_He said the company will update investors each quarter on trading conditions in its three regions, including sales and operating earnings.

Looking at 2020-21, Reliance said increased consumer spending on repair and remodel activity in all key markets – coupled with increased new residential home building activity – underpinned its result, while the winter freeze event in Texas in early 2021 also lifted sales demand.

Full-year net sales in the Americas grew 14% driven by the strength of the residential repair and remodelling markets in the US and Canada. Asia Pacific sales were up 13% higher for the year with external sales up 11%, reflecting stronger Australian new housing construction and remodel (renovation) markets.

Higher commodity prices for copper, resins and steel pushed up manufacturing input costs, while higher packaging and freight costs combined to hit earnings by $16.9 million._


> Disruptions arising from the incidence of COVID cases in the UK, Europe and the US also put additional pressure on our operations due to increased employee sickness and absenteeism as well as supply chain and logistics disruptions,” Mr Sharp said.


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## peter2 (28 October 2021)

While I'm in this jovial mood let me tell you another story. I recently bought into *RWC* again after last years nice trend. Now, *RWC* has this annoying habit of opening gap up and selling off all day to close at a low. It's done this the last two days (prior to today) and the gap up opens were very near to my T1 target of my first entry (for the Combo portfolio). This morning I placed a limit sell at the T1 (5.40) price level. About one minute before the open the estimated open price was 5.25 so I wasn't expect my order to trigger. 

There was a nice surprise awaiting me after the open which was 5.55!  Thankfully, I stuffed the +1.5R win into the bag. It's so nice when an unlikely plan comes together.  I'll wait for another setup to re-buy *RWC* as I think it and *REH* can rebound soon. 





	

		
			
		

		
	
 Both *RWC* and *REH* are worthy medium term trades (oncoming US winter).


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## peter2 (22 March 2022)

The short term gain mentioned in the prior post was very pre-mature as price continued higher to 6.50. Taking the short term profit means missing out on a bigger profit as I didn't consider a re-entry (rookie error) when price went higher. 

However since Jan22 price has fallen significantly lower to 4.00. It's impossible to know why the selling was so strong. Concerns about supply, higher inventory costs, inflationary forces etc.  

Price seems to have found some support at 4.00 as it hasn't gone lower. I've bought some *RWC* today as I think the R:R is acceptable here. I would call this an aggressive entry into a possible reversal as there hasn't been a retest of the low (or higher low).


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## Ann (22 March 2022)

peter2 said:


> However since Jan22 price has fallen significantly lower to 4.00. It's impossible to know why the selling was so strong. Concerns about supply, higher inventory costs, inflationary forces etc.



Wondering if the sell-off  was due to it failing the 200dsma.
I see a lovely big volume spike at the bottom, noticing more and more as I look into volume spikes this may herald a rise.


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## Ann (22 March 2022)

Or perhaps it was the combination of the 200dsma and the rising trendline support that failed and caused the dramatic fall? Sorry,   I should have taken more time to look at this chart before posting! Slack!


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