The London-listed industrial and electronics products distributor, RS Group, has announced a decrease in pretax profit for the first half of fiscal 2024. This decline is primarily attributed to a reduction in like-for-like revenue, which can be attributed to several factors, including fewer trading days. Furthermore, the company anticipates a higher gross margin dilution in the second half of the fiscal year compared to the first half.
Factors Affecting Performance
RS Group disclosed that the decrease in pretax profit is a result of lower price inflation and the full dilutive impact of recent acquisitions. For the six-month period ending on September 30, pretax profit stood at £126.3 million ($155.9 million) compared to £182.5 million the previous year. When considering exceptional and other one-off items, adjusted pretax profit declined by 25% to £143 million.
Revenue and Dividend Details
Additionally, RS Group reported a slight decline in revenue, with figures dropping from £1.46 billion to £1.45 billion. After adjusting for gains from acquisitions (£142 million), adverse foreign exchange rate movements (£21 million), and fewer trading days (£13 million), like-for-like revenue contracted by 8%. Despite these challenges, RS Group declared an interim dividend of 8.3 pence per share, reflecting its confidence in future growth opportunities.
Simon Pryce, the Chief Executive of RS Group, acknowledged the short-term difficulties posed by current market conditions. However, he remains optimistic about the medium and long-term growth prospects of the company.