React FY profits grow on continued momentum across core service lines

(Sharecast News) - Cleaning specialist React Group said on Tuesday that both revenue and profits were expected to have grown in the year ended 30 September, driven by continued momentum across core service lines and the recently acquired 24hr Aquaflow business.

React said revenues had grown approximately 21% year-on-year to �25m, while gross profits rose 40% to �8m, and adjusted underlying earnings were seen at least 25% higher at �3m.

The AIM-listed group also noted that stronger trading in the final quarter of the year led to an expansion in its working capital position, resulting in an increase in net debt from �4.8m on 30 March to �5.3m on 30 September.

React stated its performance highlighted the "resilience" of its financial model, underpinned by a balanced mix of high-margin, time-sensitive services and recurring maintenance contracts.

"While some services are more discretionary than others, it is this blend that delivers both margin strength and revenue durability. Recurring revenues continue to exceed 85%, supported by the company's ability to respond rapidly and reliably to urgent customer needs across the UK. This capability continues to drive new customer acquisition while deepening long-term partnerships," said React.

"The board remains confident in the Company's strategy and disciplined approach to capital allocation, including its focus on selective acquisitions that align with React's operational strengths and cash-generative profile. The integration of 24hr Aquaflow Services is progressing well and performing in line with management expectations."

As of 0850 GMT, React shares were up 16.14% at 52.84p.

Reporting by Iain Gilbert at Sharecast.com