Thanks very much for this.It helps me to better understand both...

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saintex

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19/08/24

17:32

Post #: 75273325
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Originally posted by gragou02: ↑

@saintex

Do you still like RWC ?Yes I still like them and own enough to represent about 5% of my portfolio.
They are very different companies as you would know, one being a retailer and the other being a manufacturer. After that though, there are similarities.

REH is largely family owned, RWC was family owned by the Munz family who sold out several years back. There were doubts after that about how RWC would perform, but they haven't made any real mistakes.

They both work within the plumbing industry and are subject to the ups and downs of the building industry. REH gathers about 65% of their revenue out of the USA while RWC has about 75% of their revenue coming out of the USA. REH secures the remainder of its revenue from within Australia and NZ while RWC sells into Europe as well as Australia and NZ.
REH sells to a wide range of trade customers, RWC sells much of its USA product into Home Depot (the Bunnings of the USA I think).

REH growth came from the acquisition of two Plumbing suppliers in the USA while RWC acquired a business in the USA and one in the UK.
RWC just recently bought out Holman Industries from the founder/owner. Holman Industries supplies domestic garden hose and piping systems - mainly to Bunnings so it will be interesting to see how that works out.

RWC has manufacturing centres in the USA, the UK, Spain, Melbourne, Brisbane, China and now, through Holman Industries, in Perth (I think).

Due to the fact that RWC has a limited number of products ?

I can never understand how share price sentiment moves around so can't explain the difference here except that REH is tightly and family owned. To me it's like a Private Company who offered a few shares to the public.
It may be that RWC is harder to understand and predict with a reasonable range of products these days. They sell into many countries and manufacture out of many countries so there's a lot of balls in the air at any one time so predictions aren't always comfortable.

RWC report tomorrow and have provided an update that suggests that revenue will be down by mid-single digits while GP margins are expected to hold up.

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Thanks very much for this.
It helps me to better understand both companies.

Really interested by the results of RWC tomorrow.
I understand that they struggle to grow in the short term, but they seem to be quite good at defending their high margin.
In a recent presentation to Macquarie, they indicated that their sales increased at a CAGR of 18 % since IPO (in 2016). Too bad that they did not indicate the organic growth trend.
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