RS Group boosts profit expectations as FTSE 100-listed industrial supplier continues to grow market share
- The company’s like-for-like fiscal 2023 first half revenue increased by 16%
RS Group has said it now expects full-year revenue and adjusted profit to come in slightly ahead of expectations after a strong first half.
The distributor of industrial and electronics products’ like-for-like fiscal 2023 first half revenue increased by 16 per cent, but it warned investors on Thursday that it was mindful of a shaky macroeconomic environment.
RS Group, previously known as Electrocomponents, said for the year ending 31 March 2023, consensus estimates are for revenue of £2.86billion and adjusted pre-tax profit of £357.7million.
Upbeat: RS Group has said it expects full-year revenue and adjusted profit to come in slightly ahead of expectations
RS Group shares rose today and were up 2.09 per cent or 21.00p to 1,027.00p in late morning trading.
Boss Lindsley Ruth, said: ‘We continue to grow market share, reflecting the strength of our people, our purpose-led culture and differentiated offer.
‘Our active inventory management to support availability, coupled with a more commercial operating model and improved pricing, lead us to expect full year revenue and adjusted profit to be slightly ahead of consensus expectations.
‘We remain mindful of the more challenging economic backdrop but believe we have built a strong, sustainable business that can withstand external headwinds and outperform the market.
‘As such, we will continue to invest in our product and service solutions capability and customer experience to support our Journey to Greatness and drive profitable growth, capitalising on the significant market share opportunity we see.’
The group’s revenue was 15 per cent higher in the second quarter, which it attributed to ‘volume growth and reflects ongoing market share expansion’.
RS said EMEA saw broad-based growth across the region, reflecting an improving customer mix and growth in share of customer wallet. The Americas benefited from focused sales and digital campaigns and high customer demand, it added.
It added: ‘A strong inventory position supported availability to drive market share gains.’
Victoria Scholar, head of investment at Interactive Investor, said: ‘Shares in RS Group have done very little over the last year, trading modestly lower by a few percent, a slight underperformance versus the FTSE 100 and outperforming the FTSE 250.
‘This is a company that has demonstrated its resilience amid the challenging backdrop of inflation, a slowing economic trajectory and supply chain disruptions.’
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