RS Group PLC (RS1) AI Stock Analysis

• Market Cap: £2.89B
• Dividend Yield: 3.56%
• Average Volume (3M): 1.31M
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.29
• Revenue Growth: -1.15%
• EPS Growth: -28.00%
• Country: UK
• Employees: 9,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial Equipment Distributors
• EPS (TTM): 0.36
• Shares Outstanding: 474,049,470
• 10 Day Avg. Volume: 1,103,619
• 30 Day Avg. Volume: 1,308,631
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.01
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 798.75p
• Price Target Upside: 31.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

RS Group PLC's overall score reflects a stable yet cautiously monitored position. Financial performance indicates a solid foundation with some profitability pressures. Technical indicators suggest a bearish sentiment, which needs careful observation. Valuation remains reasonable, supporting long-term investment potential. The recent corporate event adds strategic value but is balanced by current market challenges.

Positive Factors

Cost Efficiency

The group remains on track to deliver annualised cost savings in excess of £30m this year.

Strategic Vision

RS hosted a well-attended investor event in London, providing an opportunity for the relatively new management team to set out their strategic vision.

Negative Factors

Revenue Performance

RS saw more challenging than expected markets in 1H, with revenue flat and adjusted operating profit down 14%.

RS Group PLC Business Overview & Revenue Model

Company Description

RS Group PLC (RS1) is a global omni-channel provider of industrial and electronic products, solutions, and services. The company operates across multiple sectors, including electronics, automation and control, test and measurement, and electrical components. RS Group offers a comprehensive range of products from leading brands, serving a diverse customer base that spans across industries such as manufacturing, infrastructure, and energy.

How the Company Makes Money

RS Group PLC generates revenue primarily through the sale of industrial and electronic products. The company's business model centers around a robust distribution network that supplies products from various manufacturers to end-users, including businesses and professionals in sectors like manufacturing and engineering. Key revenue streams include direct sales through their digital platforms, catalogues, and sales teams. Additionally, RS Group benefits from partnerships with major suppliers and brands, enabling them to offer a wide array of products. The company's earnings are also supported by value-added services such as inventory management, technical support, and customized solutions for their clients.

RS Group PLC Financial Statement Overview

Summary

RS Group PLC displays a solid financial position despite some profitability challenges. Revenue has declined slightly, and profitability margins have contracted, indicating potential operational pressures. The balance sheet is robust with moderate leverage, and cash flows remain positive, albeit with reduced free cash generation.

Income Statement

RS Group PLC's income statement shows a slight decline in revenue from the previous year, with a decrease of 1.33%. The gross profit margin remains strong at 42.94%, indicating efficient cost management. However, both the EBIT margin and net profit margin have decreased to 9.56% and 6.24%, respectively, from the prior year, reflecting increased operational challenges or cost pressures.

Balance Sheet

The balance sheet reveals a stable equity position with a debt-to-equity ratio of 0.47, suggesting moderate risk of financial leverage. The equity ratio stands at 49.43%, demonstrating a solid capital structure. Return on equity has decreased to 12.83%, indicating reduced profitability relative to shareholders' equity.

Cash Flow

The cash flow statement shows a significant decrease in free cash flow by 44.32%, which could be a concern if it continues. However, the operating cash flow to net income ratio remains strong at 1.07, indicating good cash conversion from profits. The reduced free cash flow reflects higher capital expenditures or changes in working capital needs.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.94B	2.98B	2.55B	2.00B	1.95B
	Gross Profit
1.26B	1.32B	1.10B	832.00M	831.40M
	EBIT
281.30M	398.30M	316.10M	183.80M	211.20M
	EBITDA
367.30M	462.90M	379.80M	240.30M	262.10M
	Net Income Common Stockholders
183.70M	284.80M	230.00M	125.50M	154.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
258.70M	260.30M	257.90M	197.90M	200.80M
	Total Assets
2.90B	2.54B	2.10B	1.85B	1.62B
	Total Debt
676.90M	373.30M	299.90M	321.00M	391.60M
	Net Debt
418.20M	113.00M	42.00M	123.10M	190.80M
	Total Liabilities
1.47B	1.20B	990.20M	943.80M	894.80M
	Stockholders Equity
1.43B	1.34B	1.11B	899.40M	719.90M
Cash Flow		Free Cash Flow
145.00M	260.40M	160.50M	132.90M	72.40M
	Operating Cash Flow
196.60M	306.50M	203.00M	187.60M	147.10M
	Investing Cash Flow
-355.70M	-270.50M	-40.30M	-190.20M	-74.90M
	Financing Cash Flow
138.90M	-79.60M	-94.60M	66.00M	-95.50M

RS Group PLC Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 609.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RS1, the sentiment is Negative. The current price of 609.5 is below the 20-day moving average (MA) of 632.58, below the 50-day MA of 649.76, and below the 200-day MA of 714.66, indicating a bearish trend. The MACD of -10.63 indicates Negative momentum. The RSI at 46.08 is Neutral, neither overbought nor oversold. The STOCH value of 73.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:RS1.

RS Group PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLMA	80 Outperform	£9.79B	35.28	16.90%	0.83%	11.94%	20.48%
SMIN	75 Outperform	£6.66B	27.67	10.84%	2.23%	3.13%	13.36%
RS1	64 Neutral	£2.89B	17.38	12.54%	3.56%	-1.15%	-28.00%
Sector *	62 Neutral	$8.16B	12.85	0.64%	3.04%	3.83%	-15.83%
DPLM	54 Neutral	£5.39B	43.35	14.50%	1.42%	13.59%	6.14%

RS Group PLC Corporate Events

RS Group PLC Welcomes Miles Roberts as Non-Executive Director

RS Group PLC, a company operating in the industrial and electronics distribution industry, has announced a significant addition to its board by appointing Miles Roberts as a Non-Executive Director, effective March 1, 2025. Roberts, who has a strong background in finance, operations, and strategic management, is expected to enhance the company’s strategic direction, particularly in areas of risk and sustainability, following his tenure at DS Smith Plc and current advisory role at International Paper.

RS Group PLC Reports Revenue Decline Amid Market Challenges

RS Group PLC reported a 3% decrease in group revenue for the third quarter, influenced by declining industrial production and weaker market conditions in EMEA, though revenue grew in the Americas and Asia Pacific. Despite the challenging environment, RS Group is advancing its strategic initiatives, maintaining cost controls, and is on track to achieve significant annual cost savings, although full-year profit is expected to be at the lower end of forecasts due to market softness.

Carole Cran Appointed CFO Designate of Halma plc

RS Group plc has announced that Carole Cran, a Non-Executive Director of the company, has been appointed as the CFO designate of Halma plc, a company listed on the London Stock Exchange. This is an important career transition for Carole Cran, who has previously served as an independent non-executive director at Halma plc since January 2016. Her new role as CFO will commence on April 1, 2025, potentially impacting the operational dynamics at Halma plc.

RS Group CEO Appointed to Smiths Group Board

RS Group PLC has announced that its Chief Executive Officer, Simon Pryce, will take on the role of an independent non-executive director at Smiths Group PLC, a company listed on the London Stock Exchange, starting on February 1, 2025. This strategic move highlights a significant step for Simon Pryce as he will also join the Audit & Risk Committee, potentially enhancing collaboration and governance between the companies.