RPS.L Regulatory News (RPS)

RPS Group plc

('RPS' or the 'Group')

Q4-2022 Trading Update

Strong growth and margin recovery

RPS, a leading multi-sector global professional services firm, provides the following trading update for the quarter ended 31 December 2022 ('Q4-2022' or the 'period').

Strong growth

Performance for the period remained strong and in line with the Board's expectations, with 17% growth in Fee Revenue at constant currency on Q4-2021. Fee Revenue in Q4-2022 was £147.6 million (Q4-2021: £122.5 million, £126.0 million at constant currency). Year to date Fee Revenue is up 15% at constant currency at £559.9 million (2021: £476.1 million, £487.9 million at constant currency).

Positive market trends in urbanisation, natural resources and sustainability continue to drive our business.

Margin recovery

With a focus on driving project margins, ensuring pricing keeps pace with inflation and improving operational leverage, adjusted operating profit margins increased during the year. For the year to 31 December 2022 margins have improved by circa 170 basis points compared to the year to 31 December 2021, and the business remains on track to achieve a double-digit operating margin in the medium term.

Disciplined cash performance and strong balance sheet

Cash flow continues to be tightly managed with net bank borrowings at 31 December 2022 of £29.1 million (31 December 2021: £13.5 million). The increase in the period was driven by Fee Revenue growth, some normalising of lock up days, investment in capex, increasing legal costs on the US Federal Government investigation, and payment of transaction costs in respect of the Tetra Tech transaction process. Lock up days at 31 December 2022 were 53 days (31 December 2021: 49 days) and remain industry leading.

Financial leverage of Net Debt/rolling 12-month EBITDA was 0.7x at 31 December 2022 (31 December 2021: 0.6x), slightly below the Group's target range of 1.0x to 2.0x Net Debt/EBITDA.

Tetra Tech Acquisition

On 3 November 2022 shareholders approved a Scheme of Arrangement which will see Tetra Tech UK Holdings Limited acquire the Group. There has been no material change to the expected timetable of principal events for the acquisition set out in the announcement made by RPS in relation to the receipt of regulatory clearances on 12 December 2022. Final Court sanction of the Scheme of Arrangement is expected on 19 January 2023.

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of RPS Group plc. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are many factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

The above announcement contains inside information for the purpose of Article 7 of the Market Abuse Regulation.

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Notes to Editors

Founded in 1970 and built on a legacy of environmental and social engagement, RPS is a diversified global professional services firm of circa 5,000 consultants, designers, planners, engineers, and technical specialists.

As an established technology enabled consultancy, RPS provides specialist services to government and private sector clients.

RPS creates shared value for all stakeholders. Focusing on Natural Resources, Urbanisation, and Sustainability, RPS concentrates its expertise on the parts of project lifecycles that have the biggest impact on project outcomes. Solving problems that matter in a complex, urbanising, resource-scarce world.

Listed on the Main Market of the London Stock Exchange (LSE: RPS.L), RPS is classified within the Professional Business Support Services subsector.

For further information, please visit www.rpsgroup.com.