For investors that have elected the “Growth” Australian equity component we have bought Reliance Worldwide Corporation (RWC), the world’s largest manufacturer of push to connect (PTC) plumbing products for residential, commercial and industrial plumbing applications. PTC fittings enable copper and PEX pipe to be joined without soldering, clamps or glue, significantly increasing the ease of use. The company’s products include brass and plastic PTC fittings, PEX pipes, engineered plumbing support systems, valves, fire stops and various accessories to the plumbing and heating, ventilation & air conditioning industries globally. While marketing its products via a number of industry trusted brands, it is best known for the SharkBite branded plumbing fittings and pipes.
We are positive on the medium-term outlook for RWC for the following reasons:
Industry leading manufacturer of high quality, easy-to-use smart solutions designed to improve productivity for the end user
The PTC fittings industry is undeveloped, providing strong medium to long term growth prospects in both the maintenance & repair and new construction segments
The John Guest acquisition diversifies its product offering, geographic exposure and provides a platform to cross sell products
It enjoys dominant market share and brand awareness in the PTC segment in its largest market due to a focus on the end user
As with all investments it is not without risks which includes a more proactive competitor competing more aggressively for RWC’s relatively unchallenged market leading position as well as quality issues/product recalls which create reputational damage that either slow industry adoption of PTC fittings or allow competitors to take market share.
This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.
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