(Sharecast News) – RS Group reported a softening in first quarter revenue in an update on Thursday when compared to initial expectations, while also announcing the appointment of its new chief financial officer.
The FTSE 100 company put the softer revenue down to a number of factors, including softening purchasing managers’ index (PMI) data, a weak electronics market, and tough comparatives from the prior year.
Total revenue for the quarter declined by 2%, with 6% added frim the acquisitions of Risoul and Domnick Hunter.
Like-for-like revenue, excluding the impact of the acquisitions, saw a more substantial decline of 7%.
The firm said the dip in like-for-like revenue was mainly influenced by deteriorating PMI data, indicating a more challenging business landscape.
Additionally, ongoing challenges in the electronics market and the weakening industrial sector further contributed to the decline.
Regional performance during the first quarter saw trading in Europe, the Middle East, and Africa (EMEA) and the Americas coming in slightly softer than anticipated, while the Asia-Pacific region experienced volatility.
The company said the strategic repositioning of OKdo during the prior financial year also had an impact on first-quarter like-for-like revenue, reducing group revenue by over 1%.
Furthermore, the absence of favourable tailwinds from the previous year, such as constrained supply – particularly for electronics products – and customer inventory builds, which were now unwinding, also affected revenue comparisons.
In terms of product categories, industrial product ranges, which account for about 78% of the group’s revenue, remained relatively flat.
On the other hand, the electronics products range experienced a significant decline of 24%.
To address the challenges and explore growth opportunities, RS Group completed the acquisition of Distrelec for £313m at the end of June.
The board said the acquisition was expected to expand its presence in continental Europe, and present significant synergy potential.
“Trading for the quarter was marginally softer than anticipated, reflecting the more difficult macroeconomic backdrop and tough comparatives,” said chief executive officer Simon Pryce.
“We are reacting well in this more challenging trading environment with greater focus and by managing our cost base effectively whilst continuing to make strategic investments for the future.
“I am confident in the RS strategy and scale of opportunity as we continue to position the group to deliver long-term and through-cycle value creation for our stakeholders.”
In a separate announcement, RS also confirmed the appointment of Kate Ringrose as its new CFO and executive director on Thursday.
It said Ringrose would bring a wealth of experience with her, having served in various capacities at FTSE 100 energy giant Centrica for 18 years.
She most recently held the position of group CFO at Centrica, and boasted a background as a Chartered Accountant, having trained with KPMG in South Africa.
Kate Ringrose was scheduled to assume her new responsibilities with RS Group on 2 October.
“Kate will be a great addition to the executive team and I am looking forward to working with her to accelerate delivery of the exciting RS strategy,” Simon Pryce added.
“Kate has a proven track record as a FTSE 100 CFO, and experience in helping to lead high performance organisations that improve business resilience, drive operational excellence and deliver accelerated strategic growth.”
Reporting by Josh White for Sharecast.com.
