RS Group plc today issues a trading update for its first half ended 30 September 2022 ahead of publishing half-year results on 3 November 2022

A STRONG TRADING PERFORMANCE SUPPORTED BY ONGOING MARKET SHARE GAINS

LONDON, Oct. 6, 2022 /PRNewswire/ -- LINDSLEY RUTH, CHIEF EXECUTIVE OFFICER, COMMENTED: "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 expectations¹. 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."

Q2 revenue performance is underpinned by volume growth and reflects ongoing market share expansion

• Like-for-like revenue growth of 15% despite tough comparatives, macro headwinds and slowing economic growth.
• We estimate a 4% benefit to second quarter revenue from foreign exchange.
• Our industrial product ranges outperformed our electronics range, the former growing like-for-like revenue by 21%.
• EMEA delivered broad-based growth across the region, reflecting an improving customer mix and growth in share of customer wallet; evidenced by increased average order value and frequency.
• Americas' performance benefited from focused sales and digital campaigns and high customer demand. A strong inventory position supported availability to drive market share gains. Our acquisition of Risoul remains on track and we anticipate, subject to review by the Mexican competition authorities, it will be completed by late November.
• Asia Pacific's revenue growth was impacted by lack of single-board computing product. Excluding OKdo⁵, revenue growth was 14%. Our industrial product ranges continue to outperform our electronics range.
• Our own-brand, RS PRO, grew like-for-like revenue by 21%, due to greater availability and website personalisation.
• Web like-for-like revenue increased by 15%, with digital participation of 63%.

Ongoing margin and cost optimisation are offsetting cost inflation and operational investment

• Improvements to our pricing and discount model continued to benefit the gross margin.
• We have tightened our inventory commitments, ensuring investment is focused and reflects customer demand.
• Increased inflationary cost pressures are being offset by strong control and positive operating leverage.
• We continue to invest in operational and sustainable improvements to support our Journey to Greatness⁶.

Our first half performance leads us to expect full year profit to be slightly ahead of consensus estimates

Given our strong trading performance year to date we expect our full year revenue and adjusted profit before tax to be slightly ahead of current consensus estimates¹, albeit with a greater first half weighting than historically delivered. While we are expecting slower economic growth in the second half, we have several financial levers we can employ, if appropriate, to protect our profit. However, we remain confident in the strength of our people and proposition, especially in this environment, in driving further market share gains to generate stronger revenue and high-quality profitable growth.

Notes:

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-oct22/

Participant dial in number:
United Kingdom:                  020 3936 2999
All other locations:              +44 20 3936 2999
Or dial-in online:                 www.incommuk.com/customers/online
Access code:                        653274

Conference call timing
Date: Thursday, 6 October 2022
Time: 8.00am UK time

View original content to download multimedia:https://www.prnewswire.com/news-releases/rs-group-plc-today-issues-a-trading-update-for-its-first-half-ended-30-september-2022-ahead-of-publishing-half-year-results-on-3-november-2022-301643107.html

SOURCE RS