REECE LIMITED — Capital/Financing Update 2018

May 6, 2018

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, $04/03/13$

Name of entity

Reece Limited (Reece)

ABN

49 004 313 133

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

+Class of +securities issued or to | Fully paid ordinary shares in the capital of $\mathbf{1}$ be issued Reece (each, a Share).

+ See chapter 19 for defined terms.

Number of + securities issued or$\overline{2}$to be issued (if known) ormaximum number which maybe issued	Entitlement OfferReece proposes to issue approximately45,272,728 new Shares under the pro rataaccelerated non-renounceable entitlementoffer announced by Reece on 7 May 2018(the Entitlement Offer).
	Institutional PlacementReece proposes to issue approximately14,946,237 new Shares undertheinstitutional placement announcedbyReece on 7 May 2018 (the Placement ).
	The exact number of new Shares to beissued pursuant to the Placement and theEntitlement Offer, including the exactbreakdown of new Shares to be issuedpursuant to the institutional component ofthe Entitlement Offer (the InstitutionalEntitlement Offer ) and theretailcomponent of the Entitlement Offer (theRetail Entitlement Offer) is not known atthe date of this Appendix 3B and remainssubject to the determination of Reece, thereconciliation of shareholder entitlementsand the effects of rounding.

Principal $\overline{\mathbf{3}}$ terms of the *securities (e.g. if options, exercise price and expiry date; if partly paid *securities, the amount outstanding and due for payment; dates if +convertible securities, the conversion price and dates for conversion)

The new Shares to be issued under the Entitlement Offer and the Placement will be on the same terms as existing Shares on issue.

+ See chapter 19 for defined terms.

ä,

$\overline{4}$	Do the + securities rank equallyin all respects from the +issuedate with an existing +class ofquoted +securities?If the additional + securities donot rank equally, please state:the date from which they dothe extent to which theyparticipateforthenextdividend, (in the case of adistribution)trust,огinterest paymentthe extent to which they donot rank equally, other thanin relation to thenextdividend, distributionOFinterest payment	Yes, the new Shares issued under theEntitlement Offer and the Placement will beon the same terms as existing Shares onissue and will rank equally in all respectswith those existing Shares from the date ofissue of the new Shares.Investors who are issued new Shares underthe Placement will not be entitledtoparticipate in the Entitlement Offer inrespect of those new Shares.
5	Issue price or consideration	$9.30 per new Share under the EntitlementOffer.
		The issue price per Share for new Shares tobe issued under the Placement will bedeterminedtheinstitutionalduringbookbuild.
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	As described in the ASX Announcement andInvestor Presentation lodged with the ASXon 7 May 2018, the proceeds received fromthe issue will be used to partly fund theacquisition of MORSCO Inc by Reece.
6a	Is the entity an + eligible entityobtainedsecuritythathasholder approval under rule 7.1A?	No.
	If Yes, complete sections 6b - 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i
6b	The date the security holderresolution under rule 7.1A waspassed	Not applicable.

+ See chapter 19 for defined terms.

Appendix 3BNew issue announcement

6с	Number of + securities issuedwithout security holder approvalunder rule 7.1	Not applicable.
6d	Number of + securities issuedwith security holder approvalunder rule 7.1A	Not applicable.
6e	Number of + securities issuedwith security holder approvalunder rule 7.3, or anotherspecific security holder approval(specify date of meeting)	Not applicable.
6f	Number of + securities issuedunder an exception in rule 7.2	Not applicable.
6g	If *securities issued under rule7.1A, was issue price at least 75%of 15 day VWAP as calculatedunder rule 7.1A.3? Include the+ issue date and both values.Include the source of the VWAPcalculation.	Not applicable.
6h	If *securities were issued underrule7.1Anon-cashforconsideration,statedateonwhichvaluationofconsideration was released toASX Market Announcements	Not applicable.
6i	Calculate the entity's remainingissue capacity under rule 7.1 andrule 7.1A – complete Annexure 1ASXand releaseMarkettoAnnouncements	Not applicable.
7	+ Issue dates	The proposed issue date for new Shares to
	Note: The issue date may be prescribed byASX (refer to the definition of issue date inrule 19.12). For example, the issue date for apro rata entitlement issue must comply withthe applicable timetable in Appendix 7A.	issuedundertheInstitutionalbeEntitlement Offer and the Placement is 17May 2018.
	Cross reference: item 33 of Appendix 3B.	The proposed issue date for new Shares tobe issued under the Retail Entitlement Offeris 30 May 2018.

+ See chapter 19 for defined terms.

		Number	+ Class
8	and + class of allNumber*securities quoted on ASX(including the + securities insection 2 if applicable)	After completion ofEntitlementtheOfferandPlacement, there willbe up to 558,218,965Sharesissueonthe(based on498,000,000 Shareson issue as at theofthisdateAppendix $3B$ and theaggregateapproximate60,218,965newShares expected tobe issued under theEntitlementOfferand the Placement,as referred to in Item2 of this Appendix$3B$ ).	Shares

Number and +class of all 9 *securities not quoted on ASX (including the +securities in section 2 if applicable)

+Class
	N/A

Dividend policy (in the case of a Shares issued under the Entitlement Offer 10 trust, distribution policy) on the and the Placement will have the same increased capital (interests) dividend rights as existing Shares.

Part 2 - Pro rata issue

• holder approval Is security $\mathbf{u}$ required?

No.

Is the issue renounceable or non- $12$ renounceable?

Non-renounceable.

+ See chapter 19 for defined terms.

Appendix 3BNew issue announcement

$\bar{\beta}$

i,

13	Ratio in which the + securitieswill be offered	1 new Share for every 11 Shares held at theRecord Date for the Entitlement Offer.
14	+ Class of + securities to which theoffer relates	Shares.
15	+Record datedeterminetoentitlements	7pm (AEST) 9 May 2018.
16	differentWillholdingsonregisters (or subregisters)becalculatingaggregatedforentitlements?	No.
17	Policy for deciding entitlementsin relation to fractions	Where fractions arise in the calculation ofshareholders'entitlementsundertheEntitlement Offer they will be rounded upto the nearest whole number of newShares.
18	Names of countries in which theentity has security holders whowill not be sent new offerdocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	For the Institutional Entitlement Offer, allotherthancountriesAustralia, NewZealand, Hong Kong, Singapore and theKingdomandUnitedanyotherjurisdictions as agreed between Reece andJ.P. Morgan Australia Limited (ABN 52 002888 on).For the Retail Entitlement Offer, allcountries other than Australia and NewZealand.
19	ofClosing datefor receiptacceptances or renunciations	9.00am (AEST) on 8 May 2018 under theInstitutional Entitlement Offer.5.00pm (AEST) on 23 May 2018 under theRetail Entitlement Offer.

+ See chapter 19 for defined terms.

20	Names of any underwriters	J.P. Morgan Australia Limited (ABN 52 002888 o 11 )
21	Amount of any underwriting feeor commission	An underwriting fee of 1.50% of the Offerproceeds (less the dollar amount to be sub-underwritten by the Wilson family) and amanagement and selling fee of 0.19% of theOffer proceeds.
22	Names of any brokers to theissue	Not applicable.
23	Fee or commission payable to thebroker to the issue	Not applicable.
24	Amount of any handling feepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	Not applicable.
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	Not applicable.
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	disclosureproductNoprospectus,statement or other disclosure document isbeing prepared in connection with theEntitlement Offer. A Retail EntitlementOfferBookletandEntitlementandAcceptance Form will be sent to eligibleretail shareholders in connection with theRetail Entitlement Offer on or around 14May 2018.
27	If the entity has issued options,and the terms entitle optionholdersparticipatetoonexercise, the date on whichnotices will be sent to optionholders	Not applicable.
28	Date rights trading will begin (if applicable)	Not applicable.
29	Date rights trading will end (ifapplicable)	Not applicable.

+ See chapter 19 for defined terms.

$\widetilde{L}$

30	How do security holders selltheir entitlements in full througha broker?	Not applicable.
31	How do security holders sell partof their entitlements through abroker andaccept for thebalance?	Not applicable.
32	How do security holders disposeof their entitlements (except bysale through a broker)?	Not applicable.
33	+ Issue date	The proposed issue date for new Shares toissuedunderthe InstitutionalbeEntitlement Offer and the Placement is 17May 2018.The proposed issue date for the new Sharesto be issued under the Retail EntitlementOffer is 30 May 2018.

+ See chapter 19 for defined terms.

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

Type of +securities $34$ (tick one) $(a)$ *Securities described in Part 1 $\overline{\mathbf{x}}$ $(b)$ All other +securities Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, example, required actually at the card of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of converti

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35	If the 'securities are 'equity securities, the names of the 20 largest holders of theadditional *securities, and the number and percentage of additional *securitiesheld by those holders
36	If the *securities are *equity securities, a distribution schedule of the additional*securities setting out the number of holders in the categories$1 - 1,000$$1,001 - 5,000$$5,001 - 10,000$10,001 - 100,000100,001 and over
37	A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

38	Number of + securities for which+ quotation is sought	Not applicable.
39	+ Class of + securities for whichquotation is sought	Not applicable.
40	Do the + securities rank equally inall respects from the *issue datewith an existing + class of quoted+ securities?If the additional + securities do notrank equally, please state:the date from which they dothe extentwhichtothey	Not applicable.
	forparticipatethenextdividend, (in the case of atrust, distribution) or interestpaymentthe extent to which they donot rank equally, other than inrelation to the next dividend.distributioninterestorpayment
41	Reason for request for quotationnow	Not applicable.
	Example: In the case of restricted securities, endof restriction period(if issued upon conversion ofanother +security, clearly identifythat other 'security)
		Number	+ Class
42	Number$+class$ofandall+ securitiesquotedASXon(including the + securities in clause	Not applicable.	Not applicable.

Entities that have ticked box 34(b)

$38)$

+ See chapter 19 for defined terms.

Quotation agreement

• *Ouotation of our additional *securities is in ASX's absolute discretion. ASX $\mathbf{i}$ may quote the +securities on any conditions it decides.
• We warrant the following to ASX. $\mathbf{2}$
  • The issue of the 'securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those 'securities should not be granted *quotation.
  • An offer of the 'securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any 'securities to be quoted and that no-one has any right to return any 'securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the 'securities be quoted.
• If we are a trust, we warrant that no person has the right to return the *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the 'securities be quoted.
• We will indemnify ASX to the fullest extent permitted by law in respect of any 3 claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• We give ASX the information and documents required by this form. If any $\overline{4}$ information or document is not available now, we will give it to ASX before *quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................ (Director/Company secretary)

Date: 7 May 2018

Gavin Street Print name:

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+ See chapter 19 for defined terms.