LONDON (ShareCast) - (Sharecast News) - RS Group has said it expects to hit full-year targets after performing as expected in the first half ended 30 September, with both revenues and adjusted profits slipping on the back of continued weak market conditions.

The industrial and electrical products group reported revenues of £1.40bn for the six-month period, down 3% over the year before.

While this amounted to a 1% fall on a like-for-like basis, RS said it had moved into marginal LFL growth in the second quarter as improvements in the Americas and Asia Pacific regions offset declines in EMEA.

"This was a solid outcome given continued uncertainty in most of our markets and was another half of relative outperformance," said chief executive Simon Pryce.

RS said it its own supplier data indicates it is outperforming the market and gaining market share in "most of our product categories".

Adjusted pre-tax profit was down 6% year-on-year at £112m due to the impact of cost inflation and increased investments. However, on an unadjusted basis, reported pre-tax profit was up 7%.

"The first half results benefited from ongoing restructuring efforts, and improved agility on both pricing and cost management. We also continued to improve the business through effective execution of a range of targeted and longer-term strategic initiatives to accelerate growth, improve efficiency and drive better operating leverage over time," Pryce said.

Adjusted free cash flow was 3% lower than last year at £86m, though net debt was reduced to £333m from £437m, helping to cut leverage (net debt to adjusted EBITDA) to 1.0x from 1.3x. Meanwhile, the interim dividend was increased 2% to 8.7p per share.

Looking ahead, RS said it is still waiting on macroeconomic conditions to stabilise. "PMIs are higher in nearly all our markets than they were six months ago, although they are generally still in contraction territory and markets remain uncertain," the company said.

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