RS Group PLC (LSE:RS1)'s shares slipped in early trading after the company reported a slowdown in like-for-like revenue growth in the financial fourth quarter.
Despite this David Egan, chief financial officer at RS, said adjusted operating profit for the year is expected to be slightly ahead of consensus expectations of £382mln.
Egan noted while revenue momentum has slowed in the fourth quarter against tough comparatives, “we continue to drive profitable growth, manage our costs appropriately and invest where we can generate the greatest value".
Like-for-like revenue growth in the quarter to 31 March 2023 was 1%, hit by a 14% fall in sales of electronic products. The 1% fall compared to growth of 8% and 15% in the previous two quarters.
RS said the EMEA region continues to outperform against tough comparatives with volume growth in industrial ranges offsetting weaker electronics products, but the Americas slowed in the quarter against very strong comparatives which combined with a softer market, customer destocking and some rebranding disruption.
Asia Pacific continued to be impacted by a greater exposure to electronics and single-board computing, geopolitical issues in China and the hit from COVID-19 lockdowns, the company said.
But RS said improved gross margin and tight cost control are expected to deliver adjusted operating profit margin improvements.
Analysts at Shore Capital expect consensus forecasts “will be largely unchanged” following the statement.
Shares were 3.5% lower at 864p each in early exchanges in London.
The company will release annual figures on 23 May 2023.