REG - RS Group PLC - 3rd Quarter Trading Update

RSAnnouncement

28/01/2025 07:00

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RNS Number : 8617U  RS Group PLC  28 January 2025

 
28 January 2025, 7.00am

 

RS GROUP PLC

 

Trading update for third quarter ended 31 December 2024

 

RS Group plc, the global distributor of maintenance, repair and operation
product and service solutions to industrial customers, provides the following
trading update for the three months ended 31 December 2024.

Group revenue in the third quarter decreased by 3% and by 1% on
like-for-like(1) basis. This reflects declining industrial production and
PMI(2) data, and weaker trading in the second half of December due to more
extended holiday-related plant shutdowns at many customers.

In EMEA, like-for-like revenue declined 3% with softness in key markets
consistent with weaker business sentiment and PMIs across the region. This was
particularly true in the UK, where we have seen a material slowdown from the
beginning of November. Like-for-like revenue in Americas grew by 3%, mainly
due to improvement in the US and strong sales growth in Mexico. Asia Pacific
like-for-like revenue increased by 1%.

We are implementing our strategic plan at pace and making good underlying
progress with improvements to our digital and technology platform, product and
own-brand offer, customer service capabilities and in our execution. This is
driving continued share gain in most product categories. Our operational
efficiency initiatives and integration benefits are in-line or ahead of plan,
and we are on track to deliver annualised cost savings in excess of £30
million this year. Our multi-year investment programme to improve process and
systems efficiencies is also progressing well.

We continue to control costs tightly and therefore our prior gross margin and
cost guidance(3) remains unchanged. The softer than expected Q3 revenue
performance and weak business confidence in EMEA will however
likely result in full year profit before tax being around the bottom end
of the consensus range(4). January trading is in line with our revised
expectations, and we will continue investing in our key strategic initiatives
whilst managing costs effectively in this difficult trading environment which
we expect to continue until we see a more sustained improvement in PMIs.

 

Simon Pryce, Chief Executive Officer, said:

"We are making good underlying strategic progress and executing better which
is continuing to drive efficiency and share gains despite market conditions.
We are managing our cost base effectively whilst continuing to invest to
further strengthen our already differentiated proposition. This is better
positioning RS to generate stronger and more sustainable growth and returns in
the future, which will accelerate when the market recovers."

 

Notes:

1.         Like-for-like revenue excluding acquisitions and adjusted
for foreign currency and trading days.

2.         Purchasing manager index (PMI) is a survey-based economic
indicator designed to provide a timely insight into business conditions. The
PMI is widely used to anticipate changing economic trends in official data
such as GDP, or sometimes as an alternative gauge of economic performance and
business conditions to official data, as the latter sometimes suffer from
delays in publication, poor availability or data quality issues (Source:
S&P Global).

3.         Guidance provided at interim results, 7 November 2024.
Source: rsgroup.com/investors/result-reports-and-presentations/.

4.         Consensus estimates for the year ended 31 March 2025 are
revenue of £2,911 million (range of £2,871 million - £3,011 million),
adjusted operating profit of          £293 million (range of £277
million - £306 million) and adjusted profit before tax of £261 million
(range of £247 million - £274 million). Source:
rsgroup.com/investors/analyst-consensus/.

5.         Our profit remains sensitive to movements in exchange rates
on translation of overseas profits. Average exchange rates for the year ended
31 March 2024 for euro and US dollar respectively were €1.159 and
$1.257 respectively. Every 1 cent movement in the euro has a c. £2.0 million
impact on annual adjusted profit before tax. Every 1 cent movement in the US
dollar has a c. £0.7 million impact on annual adjusted profit before tax.

6.         We expect to see a positive impact of around £29 million
on revenue from greater trading days in 2024/25 compared to 2023/24.

 

 Enquiries:
 Kate Ringrose                    Chief Financial Officer  020 7239 8400
 Lucy Sharma                      VP Investor Relations    020 7239 8427
 Martin Robinson / Olivia Peters  Teneo Communications     020 7353 4200

 

 

Conference call details:

There will be an audio-only call for analysts and investors today at 8.00am UK
time.

 

Conference call timing

Date: Tuesday 28 January

Time: 8.00am GMT / UK

 

Webcast link (audio only): https://webcast.openbriefing.com/rsgroup-jan25/
(https://webcast.openbriefing.com/rsgroup-jan25/)

Conference call dial-in number: +44 20 3936 2999

Access code: 741313

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