Equity Analysis /
United Kingdom

GB : RPS Group - Good structural growth drivers

    Alex O’Hanlon
    Alex O’Hanlon

    Analyst - Support Services

    Joe Brent
    Joe Brent

    Analyst - Support Services & Special Situations

    CGS-CIMB
    25 March 2022
    Published by

    FY 21 FD EPS of 5.6p was in line with our expectations and the FY dividend was reinstated. We maintain our FY 22 and FY 23 earnings estimates and introduce FY 24 estimates. The company’s CMD in November highlighted its ESG credentials and showed that it is well positioned for growth. Management targets suggest that 12.6p of FD EPS is achievable, particularly given inflation. At Energy, the need for energy security is likely to increase demand for fossil fuels and renewables. At Consulting UK & Ireland, the UK PMI construction index remains robust. At Services UK & Netherlands, we expect continued growth across the UK and Netherlands. At AAP, the Brisbane Olympics in 2032 should create some exciting opportunities. A CY 22 P/E of 16.7x is not cheap but estimates are cautiously set and the shares are trading on 8.7x target earnings.