In a trading update for the third quarter ended 31 December 2024, RS Group says that group revenue decreased by 3% and by 1% on like-for-like basis.
The company says that this reflects declining industrial production and PMI (Purchasing Managers Index) data, and weaker trading in the second half of December due to more extended holiday-related plant shutdowns at many customers.
In EMEA, like-for-like revenue declined 3% with softness in key markets consistent with weaker business sentiment and PMIs across the region.
This was particularly true in the UK, where we have seen a material slowdown from the beginning of November, said RS. Like-for-like revenue in Americas grew by 3%, mainly due to improvement in the US and strong sales growth in Mexico. Asia Pacific like-for-like revenue increased by 1%.
RS says it is implementing its strategic plan at pace and making good underlying progress with improvements to its digital and technology platform, product and own-brand offer, customer service capabilities and in our execution.
This is driving continued share gain in most product categories.
Operational efficiency initiatives and integration benefits are in-line or ahead of plan, and RS says it is on track to deliver annualised cost savings in excess of £30 million this year.
A multi-year investment programme to improve process and systems efficiencies is also progressing well.
RS says that “softer than expected Q3 revenue performance and weak business confidence in EMEA will however likely result in full year profit before tax being around the bottom end of the consensus range. January trading is in line with our revised expectations, and we will continue investing in our key strategic initiatives whilst managing costs effectively in this difficult trading environment which we expect to continue until we see a more sustained improvement in PMIs.”
Simon Pryce, Chief Executive Officer, commented: “We are making good underlying strategic progress and executing better which is continuing to drive efficiency and
share gains despite market conditions. We are managing our cost base effectively whilst continuing to invest to further strengthen our already differentiated proposition. This is better positioning RS to generate stronger and more sustainable growth and returns in the future, which will accelerate when the market recovers.”