RS Group PLC Reports Strong First Half, Despite Middle East Freight Costs

RS Group PLC delivered a strong first-half performance, with adjusted operating profit rising 17% to £142 million, as momentum built across all three of its key regions. The results, reported for the half-year ending September 30, 2026, demonstrate the company's resilience in the face of increasing costs, including those related to the ongoing conflict in the Middle East.

Revenue increased by 10% overall, with like-for-like growth reaching 7%. This was underpinned by a 0.3 percentage point improvement in gross margin, reaching 43.4%, driven by pricing initiatives and volume recovery. The company benefited from positive trends in industrial demand, particularly in automation, energy infrastructure and data centre-related applications. Notably, RS PRO revenue grew by 5% on a like-for-like basis, contributing 14% to Group revenue and 20% to EMEA revenue.

The increase in adjusted operating profit was partially offset by increased investment in inventory and unanticipated freight cost increases stemming from the conflict in the Middle East. Despite these headwinds, the company maintained strong cash generation, with adjusted operating cash flow conversion at 96%, well above its target of over 80%. Net debt increased to £369 million, largely due to investments in new distribution centres, but remained well within the company’s target range relative to EBITDA. An interim dividend was increased by 2%, in line with the company's progressive dividend policy.

RS Group PLC’s performance highlights its ability to leverage its strategic investments in customer-facing platforms, digital tools, and operational efficiencies. Management is confident in its ability to deliver on medium-term financial targets including growing revenue at twice the market rate, achieving mid-teen adjusted operating margins, and maintaining a return on capital employed in excess of 20%. The company’s continued focus on strengthening its technology foundations and enhancing customer experience positions it well for sustained growth, despite ongoing geopolitical and macroeconomic volatility.