Reliance Worldwide Gains on ASX as Takeover Vote Sets Up Its Next Test

Highlights

• Australian Super expands its shareholding as Brookfield’s takeover proposal moves towards a shareholder decision.
• Operating cash generation strengthens the balance sheet despite lower annual earnings.
• Annual guidance remains intact, although borrowing costs and subdued demand present continuing challenges.

Takeover Developments Draw Attention

Reliance Worldwide Corporation Limited (ASX: RWC) provided its annual general meeting update on 23 October 2026, with its current market price at AU$4.415, up 0.8%, according to supplied market figures. The plumbing products company maintained its earnings outlook as shareholders awaited further details of Brookfield’s proposed acquisition.

AustralianSuper Increases Its Holding

AustralianSuper lifted its voting interest to 18.07%, compared to 16.18% previously. Its holding increased to 135,193,558 shares after purchases totalling 14,164,737 shares across 21 and 22 October.

Brookfield’s agreed consideration is US$3.38 per share, translating to approximately AU$4.81 using the exchange rate referenced in the AGM address. Shareholders choosing Australian dollars will receive an amount determined by exchange rates before implementation.

Annual Earnings Face Pressure

FY2026 revenue declined 0.7% to US$1,305.6 million, while underlying constant-currency sales improved 1.5%. Adjusted EBITDA decreased 12.8% to US$242.1 million, delivering an 18.5% margin.

Adjusted net profit fell 15.3% to US$125.1 million. Reported net profit was US$6.3 million, reflecting restructuring charges associated with changes to the manufacturing footprint.

Americas revenue dropped 4.0% to US$824.8 million. Asia Pacific sales increased 5.0% to A$440.4 million.

Cash Generation Supports Debt Reduction

Cash generated from operations reached US$263.4 million, equivalent to 108.8% of adjusted EBITDA. Net debt, excluding lease liabilities, declined to US$243.4 million from US$331.6 million.

Leverage decreased to 1.11 times from 1.30 times. Gross debt stood at US$272.0 million, alongside cash of US$28.6 million. The final dividend was withheld, and share buybacks were suspended following the takeover proposal.

Outlook

Management reaffirmed FY2027 expectations for mid-to-high single-digit external sales growth and an adjusted EBITDA margin broadly matching FY2026.

Higher copper prices, tariffs and prolonged UK weakness remain challenges. No superior takeover proposal emerged from market testing. Directors’ support remains conditional on no superior offer and a favourable independent expert assessment. Scheme documents are expected in November, with voting anticipated in December. Completion remains subject to approvals and other conditions.

Note- All data presented is based on information available at the time of writing.

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