React Group PLC (LSE:REAT) shares rose nearly 9% in early trade on Monday after the leading specialist cleaning, hygiene and decontamination company said trading in the six months ended 31 March 2023 has been strong.
In a trading update for the period, React said positive contract win momentum has continued with good sales growth in all three divisions of its business.
As a result, it added, revenues for the period are expected to be approximately £9.3mln (2022: £5.1mln), achieving a gross profit of approximately £2.5mln (2022: £1.2mln) and an adjusted EBITDA of approximately £925,000 (2022: £133,000). The improved margins reflect a continuing improvement in mix of business, to higher margin repeat business, and operational improvements made within the group.
Commenting on the trading update Shaun Doak, chief executive officer of REACT, said: "We are delighted by the performance in the period with the group achieving record revenue and profit growth. The improved mix of recurring revenue as well as higher margins provides the business with greater visibility and a more dependable revenue stream. The pipeline for the remainder of the year is strong, which provides cautious optimism and underpins the board's confidence in full-year results being in line with market expectations."
Around 9.15am, React shares were up 8.7% at 1.25p.