REACT Group (LSE:REAT) Gross Margin % : 26.85% (As of Sep. 2023)

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What is REACT Group Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. REACT Group's Gross Profit for the six months ended in Sep. 2023 was £2.76 Mil. REACT Group's Revenue for the six months ended in Sep. 2023 was £10.26 Mil. Therefore, REACT Group's Gross Margin % for the quarter that ended in Sep. 2023 was 26.85%.

The historical rank and industry rank for REACT Group's Gross Margin % or its related term are showing as below:

LSE:REAT' s Gross Margin % Range Over the Past 10 Years
Min: 21.03 Med: 29.64 Max: 41.65
Current: 26.75

During the past 13 years, the highest Gross Margin % of REACT Group was 41.65%. The lowest was 21.03%. And the median was 29.64%.

LSE:REAT's Gross Margin % is ranked worse than
61.83% of 985 companies
in the Business Services industry
Industry Median: 34.43 vs LSE:REAT: 26.75

REACT Group had a gross margin of 26.85% for the quarter that ended in Sep. 2023 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for REACT Group was 1.70% per year.

REACT Group Gross Margin % Historical Data

The historical data trend for REACT Group's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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REACT Group Gross Margin % Chart

REACT Group Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Gross Margin %

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28.52

33.23

30.76

23.82

26.75

REACT Group Semi-Annual Data
	Sep13	Mar14	Sep14	Mar15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Gross Margin %	Get a 7-Day Free Trial															26.02	22.56	24.58	26.65	26.85

Competitive Comparison of REACT Group's Gross Margin %

For the Specialty Business Services subindustry, REACT Group's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

REACT Group's Gross Margin % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, REACT Group's Gross Margin % distribution charts can be found below:

* The bar in red indicates where REACT Group's Gross Margin % falls into.

REACT Group Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

REACT Group's Gross Margin for the fiscal year that ended in Sep. 2023 is calculated as

Gross Margin % (A: Sep. 2023 )	=	Gross Profit (A: Sep. 2023 )	/	Revenue (A: Sep. 2023 )
	=	5.2	/	19.582
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(19.582 - 14.343)	/	19.582
	=	26.75 %

REACT Group's Gross Margin for the quarter that ended in Sep. 2023 is calculated as

Gross Margin % (Q: Sep. 2023 )	=	Gross Profit (Q: Sep. 2023 )	/	Revenue (Q: Sep. 2023 )
	=	2.8	/	10.262
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(10.262 - 7.507)	/	10.262
	=	26.85 %

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

REACT Group (LSE:REAT) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

REACT Group had a gross margin of 26.85% for the quarter that ended in Sep. 2023 => Competition eroding margins

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

REACT Group Gross Margin % Related Terms

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REACT Group (LSE:REAT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » REACT Group PLC (LSE:REAT) » Definitions » Gross Margin %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Holly House, Shady Lane, Birmingham, GBR, B44 9ER

Website

https://www.reactplc.co.uk

REACT Group PLC is engaged in providing cleaning, decontamination, and hygiene sector, including both contracted commercial cleaning and specialist emergency decontamination work. Its objective is to maintain and/or rapidly return its customers' property to safe, clean, operational use and do this through regular specialist cleaning and/or emergency response to potentially harmful incidents. The business operates through three divisions; commercial windows & cladding, hygiene & maintenance, and, emergency & decontamination. It has three operating segments; Contract Maintenance, Contract Reactive, and Ad Hoc work, out of which a majority of the revenue is generated from the contract maintenance segment.

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