TIDMRS1
RNS Number : 1477M
RS Group PLC
10 January 2023
10 January 2023, 7.00am
RS Group plc today issues a trading update for the third quarter
ended 31 December 2022
ONGOING GROWTH FROM PROFITABLE MARKET SHARE GAINS
DAVID EGAN, ACTING CHIEF EXECUTIVE OFFICER, COMMENTED: "Our
differentiated proposition continues to resonate as we grow market
share with our core industrial customer base, prioritising our
efforts on where we can add greatest value. We have continued to
outperform thanks to the strength of our high-performing people who
are focused fully on delivering our strategy. Tight control of our
pricing, costs and inventory indicates that our full year adjusted
profit will be towards the top end of consensus estimates(1) . We
are delighted to welcome Risoul into our Group as we continue to
accelerate our growth opportunities both organically and
inorganically. We are mindful of the more challenging economic
backdrop but believe that this also presents opportunities to drive
further profitable market share growth as we continue our Journey
to Greatness."
Like-for-like revenue growth(2)
-------------- ----------------------------------------------
Region Q1 to Q2 to Q3 to 9 months
Jun 2022 Sep 2022 Dec 2022 to
Dec 2022
-------------- ---------- ---------- ---------- ----------
EMEA 16% 14% 12% 14%
Americas 24% 19% 6% 16%
Asia Pacific 13% 6% (8)% 3%
--------------
Group 18% 15% 8% 14%
Q3 revenue performance remains solid
-- Like-for-like revenue growth of 8% despite a tougher economic
backdrop and strong comparatives.
-- Industrial products, c. 77% of Group revenue, grew
like-for-like revenue by 15% with low single digit volume
growth.
-- Electronics products' like-for-like revenue fell 4%, reflecting the slower market.
-- EMEA's growth remained strong as our differentiated
proposition resonates with customers, with UK and Ireland
performing the best within the region. We continue to focus on
developing our service solutions offer and working more closely
with strategic suppliers to broaden our range while improving our
customer service levels further.
-- Americas is trading against very strong comparative growth
(of 37%). Our revenue per day remains strong due to investment in
our people, product range, digital and operational capabilities.
Our strengthened proposition, deeper relationships with customers
and suppliers and improved sales initiatives are delivering market
share growth.
-- Asia Pacific's performance continues to be affected by
greater exposure to electronics (c. 35% of region's revenue), low
availability of single-board computing (SBC) product, a challenging
geopolitical backdrop and tough comparatives. Like-for-like revenue
excluding SBC was down 2% with industrial products' like-for-like
revenue growing 10%. We continue to focus on profitable revenue
growth and developing our industrial product and service solutions,
helped by our acquisition of domnick hunter.
-- RS PRO like-for-like revenue grew 19% due to greater brand
equity, focused campaigns and better marketing tools.
-- Web like-for-like revenue increased by 9%, with digital participation of 64%.
Inflationary cost headwinds are being offset by margin
optimisation and tight cost control as we continue to invest
-- Our gross margin continues to benefit from margin
optimisation work and an improved pricing and discount model.
-- Our inventory turn has increased from H1 as our purchases
reflect faster-turning lines and customer demand.
-- Despite inflationary pressures, we are managing costs tightly
while continuing to invest in growth opportunities.
Our performance leads us to expect full year profit to be
towards the top end of consensus estimates
On 3 January 2023 Risoul became part of RS Group and our teams
are now working closely together in developing product and service
solutions further across Americas, including our own brand, RS PRO.
We continue to deliver profitable market share growth, focusing our
proposition where we can generate the greatest value and drive
future opportunities. Given our performance year to date we expect
our full year adjusted profit before tax to be towards the top end
of current consensus estimates(1) . We continue to be mindful of a
more challenging backdrop but remain confident in the strength of
our people and differentiated proposition. We are focused on
driving further market share gains to generate stronger revenue and
high-quality, profitable growth.
Notes:
1. Consensus for the year ending 31 March 2023 is revenue of
GBP2,930 million (range of GBP2,709 million - GBP3,043 million),
adjusted operating profit of GBP373.5 million (GBP356.8 million -
GBP384.1 million) and adjusted profit before tax of GBP365.5
million (GBP350.4 million - GBP374.9 million). Source:
rsgroup.com/investors/analyst-coverage.
2. 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. 2021/22 is converted at 2022/23
average exchange rates for the period.
3. Our profit remains sensitive to movements in exchange rates
on translation of overseas profits. Average exchange rates for the
year ended 31 March 2022 for euro and US dollar were EUR1.176 and
$1.366 respectively. Average exchange rates for the half year ended
30 September 2022 for euro and US dollar were EUR1.174 and $1.216
respectively. Every 1 cent movement in the euro has a c. GBP1.8
million impact on annual adjusted profit before tax. Every 1 cent
movement in the US dollar has a c. GBP0.7 million impact on annual
adjusted profit before tax.
4. We expect to see a negative impact of around GBP10 million on
revenue from fewer trading days in 2022/23 compared to 2021/22.
Enquiries:
020 7239
David Egan Acting Chief Executive Officer 8400
020 7239
Lucy Sharma VP Investor Relations 8427
Martin Robinson / Olivia 020 7353
Peters Tulchan Communications 4200
Conference call details
There will be a conference call for analysts and investors today
at 8.00am UK time. A recording of the conference will be provided
shortly after the event via the investor relations page of the RS
Group website: www.rsgroup.com/investors
Please find the registration link below to join digitally. It is
advisable to pre-register early to avoid any delays in joining the
conference call. To ask a question, participants will need to be
connected by phone.
Pre-registration link:
https://webcast.openbriefing.com/rsgroup-jan23/
Participant dial in number:
United Kingdom: 020 3936 2999
All other locations: +44 20 3936 2999
Access code: 039451
Conference call timing
Date: Tuesday, 10 January 2023
Time: 8.00am UK time
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END
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