Strong execution at RS | Electronics Weekly

“2025/26 was another year of strong execution of our multi-year plan to improve the business and deliver on the significant value creation opportunity at RS,” says CEO Simon Pryce (pictured). “Revenue was broadly flat in challenging markets, but we gained share with most major suppliers and saw stronger momentum in the second half, particularly in Asia Pacific and US and Canada, with EMEA also returning to growth.

”Our growth accelerators outperformed the wider group,” said Pryce, “and good price discipline led to improved gross margin. Better execution, cost discipline and cash focus also supported operating profit and cash conversion ahead of expectations.

“A number of our investments in customer-facing data, systems and processes are now moving into activation, positioning the business for accelerated growth, supported by ongoing investment in people, customer experience, supply chain efficiency and operational excellence,” added Pryce. “Whilst conscious of the wider macro environment, we enter 2026/27 with building momentum and the potential to enhance our organic growth strategy with disciplined and value creative acquisitions, such as the £30m acquisition of BPX completed in March.

“Two years of positive underlying progress, combined with disciplined cost control and a clear plan, increases our confidence in delivering our medium-term financial targets and sustainable returns.

“Excellent cash generation and a very strong balance sheet give us more than sufficient capacity to execute our organic investment programme enhanced by value creative acquisitions,” added Pryce, “in line with our disciplined approach to capital structure and allocation we are therefore also launching today a £100m share buyback programme.”

Group revenue down 1%; like-for-like broadly flat.

Building momentum in all regions, good growth in Asia Pacific and US and Canada, EMEA returning to growth in the second half, Mexico short-term challenges.

Gross margin improved by 0.6 percentage points to 43.4% driven by pricing and active inventory management.

Adjusted operating margin flat at 9.2% (H2: 9.7%); cost inflation and targeted higher organic investment partly offset by cost savings.

Adjusted operating cash flow conversion of 109% (2024/25: 111%), significantly exceeding our 80% target.

Very strong balance sheet, net debt to adjusted EBITDA of 1.0x.

Attractive shareholder returns with dividend up 2% to 14.2 pence per share and launch of a £100m share buyback over 12 months.

Further strategic and operational progress in 2025/26

• Growth accelerators delivering; RS PRO like-for-like revenue up 5% and services and solutions up 6%.
• Distrelec integration largely complete, delivering more than £40m of synergy benefits, ahead of plan.
• £17m cost savings delivered, total of £55m integration and restructuring benefits since April 2023.
• £35m of in-year strategic organic investment; strengthening our operating platform.

RS is confident it can deliver its medium-term financial targets of growing revenue at twice the market, with mid-teen adjusted operating margins, cash conversion over 80%, and over 20% return on capital employed.
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