7th Jul 2022 08:46
(Alliance News) - RS Group PLC on Thursday said its annual performance was likely to be slightly better than expected, as it reported strong revenue growth in its first quarter.
RS Group is a London-based industrial and electronic products distributor, formerly known as Electrocomponents.
In its first quarter ended June 30, it reported like-for-like revenue growth of 18%, despite "significantly tougher comparatives".
Shares in RS Group were up 3.2% to 887.50 pence each in London on Wednesday morning.
Total revenue growth was 20% with a 3% foreign exchange tailwind, the firm said.
Europe, Middle East & Africa revenue like-for-like revenue grew 16%, reflecting higher average order value and frequency. The expansion of the distribution centre in Germany led to the country being among the top performers.
Like-for-like revenue in the Americas grew 24%, thanks to " stronger demand, focused sales campaigns, enhanced digital capabilities, improved inventory availability and greater product depth", RS Group said.
Revenue in Asia Pacific also recovered well from the lockdown in Shanghai, achieving like-for-like growth of 13%.
RS Group also noted a GBP10 million acquisition made at the end of June of domnick hunter-RL (Thailand) Co Ltd, a Thailand-based distributor and service provider of major air compression, purification and filtration products.
"Our strategy is to accelerate our organic growth ambitions with high-quality acquisitions that have a compelling strategic, financial and cultural fit. We are delighted to welcome domnick hunter-RL (Thailand) into the RS Group which will enhance our product and service solutions offer in Asia Pacific and generate value through cross-selling synergies," said Chief Executive Officer Lindsey Ruth.
It expects the acquisition to accretive to adjusted earnings per share in its first year, and exceed the cost of capital within two years.
The firm now expects its full year performance to be "slightly" ahead of market consensus estimates of GBP2.74 billion revenue, and adjusted pretax profit of GBP345.3 million.
"While we remain alert to a difficult macroeconomic environment and increasing inflationary pressures, we have an improved pricing model, strong cost controls, tight inventory commitments and profitable growth initiatives as detailed within our Journey to Greatness," Ruth continued.
For the year ended March 31, RS Group posted revenue of GBP2.55 billion, and pretax profit of GBP302.2 million
By Elizabeth Winter; [email protected]
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