RS Group PLC (RS1) AI Stock Analysis

• Market Cap: £2.79B
• Dividend Yield: 4.71%
• Average Volume (3M): 921.33K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 1.33
• Revenue Growth: -1.15%
• EPS Growth: -28.00%
• Country: UK
• Employees: 9,000
• Sector: Industrials
• Sector Strength: 87
• Industry: Industrial - Distribution
• EPS (TTM): 0.16
• Shares Outstanding: 474,049,470
• 10 Day Avg. Volume: 1,139,226
• 30 Day Avg. Volume: 921,332
• PEG Ratio: -5.87
• Price to Book (P/B): 4.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.41
• 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: £762.86
• Price Target Upside: 28.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 69 Neutral
• Price Target: ―

RS Group PLC's stock shows moderate investment potential. While the company faces profitability challenges and bearish technical indicators, its valuation is attractive, and management's confidence is positive. Continued focus on operational efficiency and market adaptation will be crucial.

Positive Factors

Cost Savings

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

Sales Stabilization

Sales per day have stabilised, suggesting potential for improving trading trends.

Trading Trends

Analysts observe share price upside from improving trading trends and delivery against strategic objectives.

Negative Factors

Market Conditions

Management are not anticipating any material market improvement in the second half, and Manufacturing PMI data remains subdued.

Regional Performance

Regionally, the Americas and Asia Pacific delivered positive LFLs with EMEA -3% impacted by a material slowdown in the UK.

Revenue Performance

The softer-than-expected Q3 revenues and weak business confidence in EMEA will likely result in FY25E adj. PBT being around the bottom-end of the consensus range.

RS Group PLC Business Overview & Revenue Model

Company Description

RS Group plc, together with its subsidiaries, distributes various electronics and industrial products in the United Kingdom, the United States, France, Germany, Italy, and internationally. The company provides industrial interconnect and test, industrial automation and control, board-level electronics, and single-board computing products; and tools, consumables, and facilities maintenance products, such as personal protective equipment, site safety products, and 3D printing products. It operates DesignSpark, an online design community and resource center for makers, students, and design engineers. The company offers its products under the Needlers and Liscombe, RS Components, Allied Electronics & Automation, RS PRO, OKdo, DesignSpark, Synovos, and IESA brands to designers, builders, and maintainers of industrial equipment and operations. It serves manufacturing, services, and infrastructure industries. The company was formerly known as Electrocomponents plc. RS Group plc was founded in 1928 and is headquartered in London, the United Kingdom.

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 shows a decrease in revenue and contracted profitability margins, indicating operational pressures. Despite this, the balance sheet is robust with moderate leverage, and cash flows remain positive, although with reduced free cash generation. Improving cost efficiencies and cash flow management is essential.

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	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	2.94B	2.94B	2.98B	2.55B	2.00B	1.95B
Gross Profit	1.25B	1.26B	1.32B	1.10B	832.00M	831.40M
EBITDA	348.40M	367.30M	462.90M	379.80M	240.30M	262.10M
Net Income	169.70M	183.70M	284.80M	230.00M	125.50M	154.70M
Balance Sheet
Total Assets	2.73B	2.90B	2.54B	2.10B	1.85B	1.62B
Cash, Cash Equivalents and Short-Term Investments	274.20M	258.70M	260.30M	257.90M	197.90M	200.80M
Total Debt	711.10M	676.90M	373.30M	299.90M	321.00M	391.60M
Total Liabilities	1.42B	1.47B	1.20B	990.20M	943.80M	894.80M
Stockholders Equity	1.31B	1.43B	1.34B	1.11B	899.40M	719.90M
Cash Flow
Free Cash Flow	252.30M	145.00M	260.40M	160.50M	132.90M	72.40M
Operating Cash Flow	265.60M	196.60M	306.50M	203.00M	187.60M	147.10M
Investing Cash Flow	-60.20M	-355.70M	-270.50M	-40.30M	-190.20M	-74.90M
Financing Cash Flow	-189.60M	138.90M	-79.60M	-94.60M	66.00M	-95.50M

RS Group PLC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 593.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RS1, the sentiment is Positive. The current price of 593.5 is above the 20-day moving average (MA) of 569.58, above the 50-day MA of 552.05, and below the 200-day MA of 627.87, indicating a neutral trend. The MACD of 8.71 indicates Negative momentum. The RSI at 63.14 is Neutral, neither overbought nor oversold. The STOCH value of 87.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RS1.

RS Group PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFTU	75 Outperform	£1.90B	16.06	7.50%	3.99%	-1.59%	-12.46%
LTHP	71 Outperform	£227.75M	―		6.53%	―	―
BRCK	70 Outperform	£202.95M	24.14	4.48%	3.55%	-8.13%	-71.44%
RS1	69 Neutral	£2.79B	18.16	10.95%	4.71%	-1.15%	-28.00%
Sector *	62 Neutral	C$6.49B	9.24	3.44%	2.90%	6.99%	-11.09%
SHI	55 Neutral	£177.23M	―	-23.81%	―	-5.41%	-11.73%
LORD		£78.12M	―	-4.13%	1.63%	―	―

RS Group PLC Corporate Events

RS Group PLC Announces Managerial Share Transactions Update

RS Group PLC, a company involved in the acquisition of shares through its Dividend Reinvestment Plan (DRIP), has announced updates regarding transactions by its Chief Financial Officer, Kate Ringrose, and her closely associated persons. The notification details the acquisition of ordinary shares at different prices and volumes on the London Stock Exchange, reflecting the company’s ongoing commitment to its DRIP strategy. This announcement provides transparency in managerial transactions and reinforces stakeholder confidence in the company’s financial governance.

Spark’s Take on GB:RS1 Stock

According to Spark, TipRanks’ AI Analyst, GB:RS1 is a Neutral.

RS Group PLC’s stock shows moderate investment potential. While the company faces profitability challenges and bearish technical indicators, its valuation is attractive, and management’s confidence is positive. Continued focus on operational efficiency and market adaptation will be crucial.

To see Spark’s full report on GB:RS1 stock, click here.

RS Group PLC Announces Share Acquisition by Non-Executive Director

RS Group PLC announced a transaction involving the acquisition of 7,860 ordinary shares by Non-Executive Director Miles Roberts, valued at GBP 45,407.22. This transaction, conducted on the London Stock Exchange, reflects the company’s ongoing commitment to aligning managerial interests with shareholder value, potentially enhancing stakeholder confidence.

RS Group Executives Acquire Shares, Signaling Confidence

RS Group PLC has announced transactions involving its top executives, CEO Simon Pryce and CFO Kate Ringrose, who have both acquired shares in the company. These transactions, disclosed under the UK Market Abuse Regulation, took place on the London Stock Exchange and reflect a significant investment by the company’s leadership, potentially signaling confidence in the company’s future performance and stability.

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.