RS Group (RS1) H1 2025 earnings summary

Executive summary

• Revenue for H1 2024/25 was £1,441m, broadly flat year-over-year, with like-for-like sales down 3% amid tough markets and a 3% benefit from acquisitions.

• Adjusted operating profit margin declined to 9.3% from 10.8%, with adjusted operating profit down 14% to £134m and adjusted profit before tax down 17% to £119m.

• Adjusted EPS decreased 16% to 18.7p; interim dividend increased by 2% to 8.5p per share.

• Strong cost control and integration benefits delivered £13m in structural savings, supporting profit and cash generation.

• Strategic investments in digital, product range, and customer experience, along with disciplined acquisitions, position the business for future growth.

Financial highlights

• Gross margin declined by 1.0 pt to 42.7% due to the unwind of prior inflation benefits.

• Adjusted operating profit margin reduced by 1.5 pts to 9.3%; operating profit conversion at 21.7% (down 2.9 pts).

• Free cash flow was £89m, with conversion over 100% due to working capital discipline and normalized inventory turn.

• Net debt decreased to £437m; net debt/adjusted EBITDA at 1.3x; gearing ratio 1.3x.

• Return on capital employed dropped to 15.6% from 23.3% year-over-year.

Outlook and guidance

• No material market improvement expected for the remainder of 2024/25; full-year outcome expected in line with current market expectations.

• Organic investment for the year will be at the lower end of the £35–45m range; full-year capex guidance unchanged at £50m.

• Cost savings and efficiency program to deliver similar incremental benefits in H2 as in H1, completing the £30m program.

• Effective tax rate for FY 2024/25 expected to be around 26%.

• Additional trading days in FY 2024/25 to increase revenue by £27m.