RS Group tumbles as CEO takes leave of absence

RS Group - formerly Electrocomponents - tumbled on Thursday as it announced that chief executive officer Lindsley Ruth will take a leave of absence with immediate effect for personal reasons.

In Ruth’s absence, a management structure is in place to ensure continuity and maintain momentum in the execution of the group's strategy, it said. David Egan will assume his duties in addition to his role as chief financial officer.

Jefferies pointed out in a note that "when this also occurred in November 2019, the shares pulled back by circa 10%".

News of Ruth’s leave of absence came alongside the company’s first-half results, which showed a rise in profit and revenue.

In the half year to 30 September, pre-tax profit jumped 34% on the same period a year earlier to £182.5m, while revenues were ahead 21% to £1.5bn.

Egan said: "We have delivered a strong revenue and profit performance in the first half as our differentiated proposition continues to resonate with all our stakeholders. Our performance has been driven by our people who are aligned to our purpose-led culture and are working hard to improve our customer experience and commercial focus further.

"We continue to invest in our group to become stronger, more profitable and to take greater market share. While mindful of a slowing economic backdrop, we remain optimistic that we will continue to outperform the market."

At 0905 GMT, the shares were down 10.6% at 853.50p.