RS Group PLC on Thursday said it expects to meet market expectations for its full-year despite trading in the first-half being ‘tougher than anticipated’.

In the six months to September 30, the London-based global product and service solutions provider for industrial customers reported broadly flat on-year revenue of £1.44 billion compared with £1.45 billion the year prior.

RS Group shares are up 7.4% at 732.00 pence on Thursday morning in London.

Pretax profit for the FTSE 250-listed firm fell 16% to £105.8 million from £126.3 million the year prior.

Cost of sales throughout the period rose slightly by 1.4% to £825.1 million from £813.8 million. However, strong cost control measures delivered £13 million in structural savings ahead of plan.

RS said its performance was broadly in line with expectations but acknowledged market conditions were more difficult than anticipated.

It said a softening of economic conditions had contributed to declining industrial production figures, with weak manufacturing data indicating low market confidence.

Despite this, RS noted that it had realised faster than expected cost savings, improved execution and cash conversion and a stabilisation of sales per day.

Inline with its progressive dividend policy, RS proposed an increased interim dividend of 2.4% to 8.5p per share from 8.3p the previous year.

The firm added that whilst short term visibility remains limited, it will continue to flex its cost base accordingly and expects its full-year performance to be in line with market expectations.

RS Group Chief Executive Simon Pryce said: ‘RS executed well in the first half despite more challenging than anticipated markets.

‘Our strategic investments are on track and beginning to deliver, we are continuing to gain share in most categories and strong operational control is leading to efficiency and cost optimisation programmes running ahead of plan.

‘As we enter [the second half], whilst markets remain challenging, our sales per day has stabilised. Thanks to the great efforts of the RS team, we are delivering well on the things we can control. We continue to invest in our differentiated proposition in a focussed and prioritised way.’

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