RS Group (RS1) H2 2026 earnings summary

Executive summary

• Delivered resilient financial performance in challenging markets, with results in line or slightly ahead of expectations and sequential improvement.

• Revenue was flat year-over-year, supported by strong pricing discipline and improved gross margins despite slightly lower volumes.

• Strategic and operational investments, particularly in RS PRO, solutions/services, and digital, are delivering benefits and outpacing group growth.

• Integration of recent acquisitions (BPX, Distrelec) progressing well, with synergies exceeding targets.

• Disciplined capital deployment, including a £100 million share buyback and continued M&A activity, supports long-term value creation.

Financial highlights

• Reported revenue £2,881m, broadly flat like-for-like; adjusted operating profit margin 9.2%, stable year-over-year.

• Adjusted profit before tax £246m, down 2% LFL; adjusted operating profit £265m, down 4% LFL.

• Gross margin improved in H2 to 43.4% due to pricing discipline and inventory management.

• Cash flow conversion was strong at 109%; adjusted free cash flow £202m; return on capital employed stable at 15.4%.

• Net debt reduced to £329m, at 1x net debt-to-EBITDA.

Outlook and guidance

• Entering FY 2027 with building momentum, supported by sequential improvement in sentiment and performance, especially in Q3 and Q4.

• Gross margins expected to remain stable into 2026/27; cost inflation guided at ~3%.

• Organic OpEx investment to increase toward the top of £35m–£45m range, with continued investment in technology and process harmonization.

• CapEx to remain around £50m; integration and restructuring costs expected at £10m–£15m.

• Medium-term targets: revenue growth 2x market, mid-teen operating profit margin, >80% cash conversion, >20% ROCE.