6th Feb 2024 14:18
(Alliance News) - React Group PLC on Tuesday said it was "delighted" by its "impressive" set of full-year results, crediting a strong client base strengthened by recent "cash generative" acquisitions.
The Birmingham, England-based cleaning, hygiene and decontamination firm said earnings before interest, tax, depreciation and amortisation more than doubled to GBP2.3 million in the financial year ended September 30, from GBP1.0 million a year ago.
In an interview with Alliance News, Chair Mark Braund said the company has been growing at a "steady pace" over the past five years, with a compound annual growth rate of 59% and by 24% organically.
"We have been driving a quality business where we have a unique proposition, and have been able to generate better margins," he said.
React also said it swung to a pretax profit of GBP50,000 from a GBP701,000 pretax loss the previous year, which was driven by a 70% increase in revenue to GBP19.6 million from GBP13.7 million in financial 2022.
Recurring revenue was up 87%, compared to 83% in financial 2022. On a like-for-like basis, React recorded organic revenue growth of approximately 21%.
The firm said that the acquisitions of Fidelis and Laddersfree, in 2021 and 2022 respectively, have brought in an "established and impressive client base", which has helped drive the group's revenue.
Braund told Alliance News that by purchasing the businesses, the firm has focused on increasing their footprint nationwide, noting that the "organic growth engine we have added to the acquisitions has generated the performance we have seen in the last four years."
Looking ahead, React cited good momentum going into financial 2024, following a "strong" first quarter, reflecting significant growth opportunities for the group and its essential services. Braund added that the firm will continue "prioritising contracts that provide us with recurring revenue."
When asked about how the company plans on managing current inflationary pressures, Braund told Alliance News that "inflationary pressures have been there, but we have been managing." In particular, he noted that React has managed to moderate inflation by improving our margins with our customers and by making ourselves more operationally efficient."
In addition, Braund said that "for us to continue to grow at the pace we have been growing, we have had to strenghten our management team."
The firm welcomed newly-appointed Chief Financial Officer Spencer Dredge, who was hired back in December, but officially began his role on Tuesday. Dredge, who replaces CFO Andrea Pankhurst, has joined from AIM-listed SmartSpace Software PLC, where he served as chief operating officer.
Commenting on his appointment, Braund said "we believe strongly it will help us do two things: one, continue our drive in optimising the efficiency of the business, and two, maintaining the pace of growth."
Shares in React were up 2.6% at 1.36 pence each in London on Tuesday afternoon.
By Sabrina Penty, Alliance News reporter
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