RS Group PLC (LSE:RS1) shares rose by around 9%, to 655p, as it increased dividends and launched a £100 million share buyback.
The distributor of industrial products and services reported to investors that strong cash generation and lower debt helped offset a softer full-year profit performance in challenging industrial markets.
Revenue for the year to 31 March 2026 fell 1% to £2.88 billion, while adjusted operating profit declined 3% to £265 million. Adjusted profit before tax was £246 million, down 1%, though reported pre-tax profit rose 7% to £220 million.
Gross margin improved by 0.6 percentage points to 43.4%, supported by pricing discipline and active inventory management. Adjusted operating cash conversion came in at 109%, well ahead of RS Group’s 80% target, while net debt fell to £329 million from £364 million.
Chief executive Simon Pryce said revenue was “broadly flat in challenging markets” but that the group gained share with most major suppliers and saw stronger momentum in the second half, particularly in Asia Pacific and US & Canada.
RS Group also lifted its full-year dividend by 2% to 22.9p per share.
The company said most major markets are now back into low single-digit growth and reiterated its medium-term targets of growing revenue at twice the market, mid-teen adjusted operating margins, cash conversion above 80% and return on capital employed above 20%.