Resources Connection (RGP), listed on the NASDAQ, has reported its full-year 2024 results, revealing a mixed performance with revenue exceeding expectations but a significant drop in profit.
Key Financial Highlights:
Revenue: £495.8 million (down 18% from FY 2023).
Net Income: £16.4 million (down 61% from FY 2023).
Profit Margin: 3.3% (down from 7.0% in FY 2023). The decline in margin was primarily driven by the decrease in revenue.
Earnings per Share (EPS): £0.49 (down from £1.27 in FY 2023).
Revenue and Earnings Beat Estimates:
Despite the overall decrease in profitability, Resources Connection exceeded analyst expectations for both revenue and earnings per share. Revenue was 1.2% higher than anticipated, while EPS surpassed estimates by a substantial 71%.
The RGP segment was the primary driver of revenue, contributing £488.4 million (98% of total revenue) over the past twelve months. However, the cost of sales, at £302.2 million, amounted to 61% of total revenue, highlighting its impact on earnings. General and administrative expenses were the largest operating cost, reaching £162.2 million (92% of total expenses).
Looking Ahead:
Analysts predict an average revenue growth rate of 3.3% per year over the next three years for Resources Connection. This is slightly lower than the projected 5.6% growth rate for the US professional services industry as a whole.
Risk Analysis:
Before investing in Resources Connection, it is crucial to be aware of potential risks. There are two warning signs that investors should consider before making a decision.
Share Performance:
Resources Connection shares have seen a positive week-on-week performance, increasing by 4.6%.
Disclaimer:
This article is for general information purposes only and does not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account individual investment objectives or financial situations. The analysis presented here is based on historical data and analyst forecasts, and may not reflect the latest price-sensitive company announcements or qualitative information. Simply Wall St holds no position in any of the stocks mentioned.
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