RS sees slowdown, bets on 2023 recovery
London-based broad range distributor RS is seeing a slowdown in the market after 10% like-for-like growth last year to £2,982.3m with profits of £400m.
The company saw just 1% growth in the electronics distribution, which is 23% of the business, reflecting the downturn in the market and the build up of inventory.
“We continue to outperform in the industrial market, especially in EMEA, although trading over the first seven weeks of 2023/24 reflects a slowing in industrial growth, as indicated by PMI data, and continued weakness and aggressive competition in electronics,” said the company.
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“Despite this more uncertain economic environment and the strong comparator period last year, we are comfortable with current consensus profit expectations for 2023/24, albeit with performance more weighted to the second half.”
Analysts are expecting £3,116 million in turnover this coming year, with operating profits down to £390 million as inflation hits.
“RS delivered a strong performance in 2022/23 despite a more challenging macroeconomic backdrop in the second half,” said Simon Pryce, (above), the new CEO at RS. “This reflected our on-going operational excellence initiatives, geographical, industry and product mix, inventory availability and strong pricing. Together with the efforts of our people, this resulted in good financial results. We also acquired domnick hunter and Risoul and, after year end, agreed to acquire Distrelec.”
“After 30 days in the role, I am excited about the opportunity I see for RS going forward. We have a solid business, a sound strategy and great people. We are transitioning to an omni-channel operator in a large and fragmented market. We are supplier and increasingly customer focused, who see the value we bring as we move from being a product distributor to a solutions provider. While we are mindful of near-term external challenges, we remain comfortable with current consensus profit expectations for 2023/24.”
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