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.