RS Group (LON:RS1) Posts Earnings Results

RS Group (LON:RS1) released its earnings results 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 firm 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 6.2%

RS Group stock opened at GBX 756.50 on Friday. 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 one year low of GBX 544.50 and a one year high of GBX 821.71. The stock has a market capitalization of £3.46 billion, a PE ratio of 21.93, a price-to-earnings-growth ratio of 1.85 and a beta of 0.87. The business’s fifty day moving average is GBX 763.62 and its 200 day moving average is GBX 677.49.

Analyst Upgrades and Downgrades

Several research firms have commented on RS1. Deutsche Bank Aktiengesellschaft boosted their target price on RS Group from GBX 850 to GBX 885 and gave the stock a “buy” rating in a report on Friday. JPMorgan Chase & Co. upped their price target on shares of RS Group from GBX 635 to GBX 720 and gave the stock an “overweight” rating in a research note on Friday, July 17th. Finally, Berenberg Bank increased their price objective on shares of RS Group from GBX 650 to GBX 900 and gave the company a “buy” rating in a research report on Thursday, October 22nd. Seven investment analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, RS Group presently has a consensus rating of “Moderate Buy” and a consensus target price of GBX 747.50.

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.