RS Group (LON:RS1) Announces Quarterly Earnings Results

RS Group (LON:RS1) posted its quarterly earnings data on Thursday. The company reported GBX 20.90 earnings per share (EPS) for the quarter, Digital Look Earnings reports. RS Group had a net margin of 5.62% and a return on equity of 11.55%. The business had revenue of GBX 154.43 billion during the quarter.

Here are the key takeaways from RS Group’s conference call:

• RS Group returned to growth, with first-half revenue up 10% (7% like-for-like) and adjusted profit before tax up 17%. Like-for-like operating margin expanded 70 basis points to 9.2%, supported by pricing, cost discipline and stronger commercial execution.
• All regions grew as demand improved: like-for-like revenue rose 5% in EMEA, 9% in the Americas and 15% in Asia Pacific. Management said growth was broad-based and attributed roughly half of volume growth to market recovery and half to share gains.
• Cash generation and the balance sheet remain strong: operating cash flow conversion was 96%, leverage was 1.1 times net debt to EBITDA, and return on capital employed increased to 16.5%. The company raised its interim dividend 2% and bought back £35 million of shares.
• Digital, Services and Solutions, and RS PRO grew 5%, 6% and 5% respectively—slightly below group growth. Management linked this partly to regional mix and commercial changes, and said investments in digital capabilities, customer data and AI are progressing, while noting the growth drivers’ potential remains substantial.
• Second-half comparisons will be tougher, fixed costs are expected to rise 7% year on year, and organic investment spending will accelerate. Management said the productivity benefits from its multi-year process and technology programs are weighted toward the later years, so a step-change in operating leverage may take two to three years.

RS Group Trading Down 2.1%

RS1 opened at GBX 789.50 on Friday. The firm has a 50 day simple moving average of GBX 764.36 and a 200 day simple moving average of GBX 678.27. The company has a debt-to-equity ratio of 35.05, a current ratio of 1.79 and a quick ratio of 1.24. RS Group has a fifty-two week low of GBX 544.50 and a fifty-two week high of GBX 826.50. The company has a market cap of £3.61 billion, a price-to-earnings ratio of 22.88, a price-to-earnings-growth ratio of 1.85 and a beta of 0.92.

Wall Street Analyst Weigh In

RS1 has been the topic of a number of recent analyst reports. JPMorgan Chase & Co. boosted their price objective on RS Group from GBX 635 to GBX 720 and gave the company an “overweight” rating in a research note on Friday, July 17th. Berenberg Bank lifted their price objective on RS Group from GBX 650 to GBX 900 and gave the stock a “buy” rating in a research note on Thursday, October 22nd. Finally, Deutsche Bank Aktiengesellschaft increased their price target on RS Group from GBX 850 to GBX 885 and gave the company a “buy” rating in a research note on Friday. Six equities research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of GBX 754.29.

RS Group Company Profile

RS Group plc is a high-service global product and service solutions provider for industrial customers, enabling them to operate efficiently and sustainably.

We operate in 33 markets, stock over 875,000 industrial and specialist products and list an additional five million relevant for our industrial customers, sourced from over 2,500 suppliers. This extensive range supports our customers across the industrial lifecycle of designing, building, and maintaining equipment and operations. We enhance their experience through a tailored service model, leveraging our efficient physical, digital and process infrastructure sustainably.