Weak markets blight RS Group sales, profits

Author: Mick Elliott, Contributing Editor

Citing a softer industrial purchasing managers’ index and a weak electronics market, RS Group has reported full year revenues dipped 1% and 8% like for like to £2.94 billion from £2.98 billion.

Profit slumped 25% from £402 million to £312 million.

Industrial products including automation and control now contribute 81% of RS revenues; electronics delivers 19%.

Industrial products revenues, excluding automation and control, grew 2%, automation and control revenues declined 9%, electronics revenues plummeted 22%.

EMEA revenues held up best coming in 1% higher at £1.79 million. France, at 2%, was the only country to grow revenues. UK/Ireland slowed 1%. On the back of a declining economy Germany plunged 16%.

In the Americas revenues slipped 1%, while Asia/Pacific reported a 20% drop in revenues, due, explains RS, to exposure in a declining electronics market, with the Japan and China performing worst.

The Group’s own brand offering RS PRO and service solutions grew revenues 3%.

Commented Simon Pryce, RS Group Chief Executive: “Our financial performance in 2023/24 reflected weakness in global industrial production and the unwinding of unusual post-pandemic trading tailwinds. The more difficult trading environment also highlighted the need for increased focus and alignment, better prioritisation and execution, greater agility, and a more efficient and flexible cost structure. We have aligned our strategic actions, simplified our operating model, enhanced our leadership team and clarified accountabilities. We are also reducing our cost base and see the opportunity for significant efficiency improvements in the future. Furthermore, I am particularly pleased with the strategic acceleration our recent acquisitions are delivering.”

While waiting for a market pick-up, actions already underway include accelerating the integration of Distrelec, enhancing its German distribution centre’s efficiency and capacity, increasing flexible local fulfilment capacity and standardising the Group’s warehousing management system.

RS also plans in excess of £30 million annualised cost savings over three years.