REG - RS Group PLC - Q1 Trading Update

RSAnnouncement

27/07/2023 07:15

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RNS Number : 3323H  RS Group PLC  27 July 2023

 
27 July 2023, 7.00am

 

RS Group plc today issues a trading update for the first quarter ended 30 June
2023

 

STRATEGIC FOCUS AND CONTINUED INVESTMENT IN A CHALLENGING ENVIRONMENT

 

               Like-for-like revenue growth(1)
 Region        Q1 to      Q2 to      Q3 to      Q4 to        Q1 to

Jun 2022
Sep 2022
Dec 2022
 Mar 2023
Jun 2023
 EMEA          16%        14%        12%        6%           (3)%
 Americas      24%        19%        6%         (4)%         (13)%
 Asia Pacific  13%        6%         (8)%       (16)%        (19)%
 Group         18%        15%        8%         1%           (7)%

 

Q1 revenue marginally softer than anticipated reflecting softening PMI(2)
data, a weak electronics market and tough comparatives

·      Total revenue declined by 2%, with 6% added from the acquisitions
of Risoul and domnick hunter.

·      Like-for-like revenue declined 7% reflecting a more challenging
environment as indicated by deteriorating PMI data, the continued tough
electronics market and the weakening industrial market.

·      Trading in EMEA and Americas was marginally softer than
anticipated and volatile in Asia Pacific.

·      Q1 like-for-like revenue was impacted by the 2022/23 strategic
repositioning of OKdo reducing Group revenue by over 1%, as well as the lack
of the previously reported Q1 2022/23 tailwinds of constrained supply
(particularly for electronics products) and customer inventory builds which
are now unwinding.

·      Industrial product ranges like-for-like revenue, c. 78% of Group,
was flat. Electronics products range declined 24%.

·      The £313 million Distrelec acquisition completed at the end of
June, which expands our continental European presence and has significant
synergy potential.

 

SIMON PRYCE, CHIEF EXECUTIVE OFFICER, COMMENTED: "Trading for the quarter was
marginally softer than anticipated, reflecting the more difficult
macroeconomic backdrop and tough comparatives. We are reacting well in this
more challenging trading environment with greater focus and by managing our
cost base effectively whilst continuing to make strategic investments for the
future. I am confident in the RS strategy and scale of opportunity as we
continue to position the Group to deliver long-term and through-cycle value
creation for our stakeholders."

 

Notes:

1.         Like-for-like revenue growth is growth in revenue adjusted
to eliminate the impact of acquisitions and the effects of changes in
exchange rates and trading days year on year. Acquisitions are only included
once they have been owned for a year, at which point they start to be included
in both the current and comparative periods for the same number of months.
2022/23 is converted at 2023/24 average exchange rates for the period.

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.         Our profit remains sensitive to movements in exchange rates
on translation of overseas profits. Average exchange rates for the year ended
31 March 2023 for euro and US dollar respectively were €1.158 and
$1.206 respectively. Every 1 cent movement in the euro has a c. £2.1 million
impact on annual adjusted profit before tax. Every 1 cent movement in the US
dollar has a c. £1.2 million impact on annual adjusted profit before tax.

4.         We expect to see a negative impact of around £24 million
on revenue from fewer trading days in 2023/24 compared to 2022/23.

 

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

 

 

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