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TOP NEWS: RS Group interim profit plunges on difficult markets

7th Nov 2023 09:11

(Alliance News) - RS Group PLC on Tuesday reported a disappointing set of interim results, as revenue took a hit from tricky market conditions, and rising costs ate into its bottom line.

The London-based industrial and electronics products distributor said revenue in the half-year to September 30 inched down 0.8% to GBP1.45 billion from GBP1.46 billion a year prior. On a like-for-like basis, it was down 8%, but saw a 10% benefit from acquisitions.

Pretax profit weakened 31% to GBP126.3 million from GBP182.5 million, due the the weaker revenue and rising cost of sales and operating costs.

Shares in RS were down 4.3% at 652.80 pence each in London on Tuesday morning.

"RS has delivered a resilient performance in difficult markets, which have been more challenging than anticipated at the beginning of the year. Industrial revenue has been robust despite the challenging macro and geopolitical environment but cyclical weakness in electronics has been exasperated by customer de-stocking," Chief Executive Officer Simon Pryce said.

RS lifted its interim dividend 15%, however, to 8.3p from 7.2p, reflecting that the firm normally pays out 40% of the prior year's dividend as the following year's interim payout.

CEO Pryce added that the firm expects markets to remain "difficult" in the short term, but sees "attractive" growth characteristics in the medium and longer-term.

"We are managing our costs more appropriately whilst continuing to invest in key strategic accelerators. We are also already beginning to see the benefit of tighter focus, more alignment, better prioritisation and improved execution across the group. This is positioning the group very effectively to benefit when our markets return to growth," he continued.

By Elizabeth Winter, Alliance News senior markets reporter

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