Analysts have upgraded 2019 earnings forecasts for RPS (RPS), after the consultancy group outlined better-than-expected pre-tax profits for 2018 and an earnings-enhancing acquisition. Pre-tax profits of £50.2m were down on £53.9m in 2017, but slightly ahead of forecasts by brokers Numis and Liberum, which had expected £49.8m and £50m, respectively.
Net borrowing reduced to £73.9m from £80.6m, which analysts at Liberum attributed to success in reducing lock-up days – faster billing and improved collection has helped boost cash conversion.
The group has also acquired Australia-based transport consultancy business Corview for a maximum cash consideration of AUD$32m (£17.7m). The Corview deal marks the first acquisition made under RPS chief executive John Douglas, who assumed his role in September 2017.
