RSK Group powers ahead with huge revenue and earnings progress

Highly acquisitive sustainable solutions group, RSK, has seen its annual financial results soar, driven by 27 takeovers and the establishment of eight new businesses.

The Helsby-based group posted a 127% increase in 2022 revenues of £796m.

EBITDA rose to £59.4m, compared with £40.8m in 2021, and the group finished the year in a strong cash position with £110.7m of cash at bank. Proforma figures at the end of fiscal year 2022 – including a full year effect of the new acquisitions – show a group of companies delivering annual turnover of £939.6m and EBITDA of £75.4m.

The group says a big part of its success to date is anchored in a diversity of specialisms across many sectors and geographies with the overarching commitment to the UN Sustainability Development Goals (SDGs).

Group CEO, Aln Ryder, told TheBusinessDesk.com: “In tough economic times, no-one would be bold enough to claim they are truly recession-proof, but diversity is certainly a great comfort to a CEO and their board.”

He added: “I hope everyone at RSK is very proud of what we have accomplished.”

Reviewing the 2022 financials, he said: “All in all, I’m very pleased with the year. We’ve set out to significantly grow the business, cementing RSK as a global leader in the delivery of sustainable solutions and I feel that over the last financial year, we have made incredible strides towards this goal, despite having to deal with many external pressures.

“There have been severe economic challenges all over the world, represented here at home by a cost-of-living crisis which has put the spotlight on energy costs, and a global increase in extreme weather events which will only become more frequent due to the impacts of climate change.

“The challenges for communities are significant and people are not only looking to governments for solutions, but to the business community to respond in a tangible way. In RSK, we have deliberately aligned our service offering to the United Nations SDGs and we are very much focused on how the expertise and skills we have can deliver solutions to the global challenges.

“To support this ambition, we ramped up our growth plans in 2022, more than doubling our workforce – which as of today stands at over 11,000 – through a combination of strategic acquisitions, new business formation and organic growth.”

Mr Ryder said the group’s acquisitive ambitions are still to the fore, with a particular focus on new geographies.

“We are now approaching the end of our current financial year and we’ve continued growing the business at pace to keep up with growing global demand. As of today, on a proforma basis, RSK turnover is more than £1.3bn per year, generating in excess of £100m EBITDA.

“Our plan is to continue this into next year, with our focus remaining firmly on how we can best support the global movement towards a more sustainable future.

“From a sector perspective, it makes sense for RSK as a solutions-based business to continue to expand in areas where our expertise and experience can directly support the greatest need. Increasingly water and energy, particularly renewable energy, are core focus areas.

“Coupled with this is RSK’s knowledge and sector leadership in agricultural research and food security, engineering and infrastructure including transportation – rail, road and aviation. We really want to be leading the way in each of these areas, providing complete solutions from R&D to consultancy and advice through to the delivery of technical services.”

He added: “From a geographic perspective, we see opportunities in all regions which we are already present, but have a particular focus this year in continental Europe, Australia, South East Asia and Latin America.

The group will fund future growth through its £1bn sustainability-linked finance facility agreed with Ares in 2021 along with a £40m revolving credit facility from NatWest Bank.

And Mr Ryder denied this debt finance arrangement could represent an increased risk in the current economic climate. He said: “Yes, interest rates are rising, and we follow this very closely, but we have the financial headroom so it isn’t presenting us with any immediate cause for concern. I am much more concerned about sitting still and missing the opportunities that are in front of us.

“The primary financial KPI that we track in RSK is leverage, the relationship between EBITDA and debt. For reasons of prudence, we seek to maintain leverage of around 5x to 6x – however, even at leverage levels above 7x, there is a good level of headroom against financial covenants.

“At the end of FY22 we had leverage around 6x, so I’m very satisfied with the financial security of the group.”

He identified finding and retaining staff as the group’s main challenge: “There is a real skills shortage in fields such as engineering and sustainability. We recognise that this is something which could hold us back, undermining the speed with which we can deliver changes in key sectors.

“It’s something we take very seriously. We’re encouraged by the fact that new entrants to the working world favour green jobs and careers in sectors where they genuinely can make a difference. All our efforts are focused on making it easy and attractive for them to do so.

“RSK works with universities to help shape what young people are learning so they are ready to enter careers with our businesses. We’re also developing more apprenticeships so we can help people develop the necessary skills while working on real projects.”

And he is mindful of the role ESG (Environmental, Social and Corporate Governance) plays across the group, and with clients. He said: “RSK supports clients around the world in being more sustainable, so it’s essential we demonstrate best practise through our own activities.

“I was very pleased to be involved in the largest ever sustainability-linked private credit backed financing package with Ares. Through this arrangement we’ve tied ESG directly to our finances and will receive interest rate savings for achieving our ESG KPIs.

“To date, we’ve met all targets and have committed to reinvest 100% of the interest savings into sustainability projects and initiatives, creating further positive impact in communities and for the environment.  We’ve recently published our FY22 sustainability report which highlights several of our internal initiatives and achievements, including a 41% reduction in emissions intensity.”