RPC Group
27th January 2012
Interim Management Statement
RPC Group, Europe's leading supplier of rigid plastic packaging, today issues its interim management statement for the period from 1 October 2011.
Trading performance
Revenues in the third quarter of the financial year 2011/12 (1 October 2011 - 31 December 2011) were significantly ahead of the corresponding period of the previous year due to the inclusion of the Superfos business and increasing like-for-like revenues. The improvement in the sales mix towards higher added value products such as pharmaceutical devices and coffee capsules continued. Overall like-for-like sales volumes, in terms of polymer tonnes converted, were at a similar level to last year as the growth in higher added value packaging was offset by the continuous light weighting trend and lower activity levels in the surface coatings and vending cup markets, which were affected by the macro-economic slowdown.
Operating profit (before exceptional items) in the third quarter was significantly ahead of the corresponding period last year. This was achieved as a result of the contribution of the Superfos business, the realisation of the associated synergies and improving like-for-like profitability as the Group benefitted from the enhanced sales mix and a more benign polymer environment. As anticipated, the adjusted profit before tax* in the third quarter was ahead of the corresponding period of the previous financial year.
The financial position remains robust with satisfactory cash flow development in the third quarter and significant headroom under the Group's debt facilities.
Other developments
The integration of Superfos continues to progress well with key senior management retained. The closure of the Runcorn site and the subsequent transfer of business to other RPC sites is proceeding to plan with completion expected by the end of June 2012. Best practice and technology exchange is ongoing and the Group is on course to realise £9m of synergies in the financial year 2011/12 and steady state synergies in the range of £15m to £25m.
In the Group's strategy certain product market combinations have been identified as sectors to de-emphasise as their market positions are not deemed strong enough to meet the Group's return requirement of 20% ROCE. In this context Bramlage Verschlϋsse (wines and spirits closures manufacturing - revenues of circa £6m) was sold in August last year. RPC now announces its intention to withdraw from the loss making market segments of automotive components in Germany and vending cups in Western Europe (excluding the UK). The annual revenue in these segments is circa £16m. The strategic exit through either sale or closure, subject to consultation, is anticipated to be concluded at the latest by the end of 2012. Whilst exceptional costs will be incurred, the associated cash impact is anticipated to be positive.
Ron Marsh, RPC's Chief Executive said:
"The Group's overall performance for the period was in line with our expectations. During the period the integration of the Superfos business has been largely completed with the realisation of the synergies well on track. Looking forward, I am confident that growth in higher added value products will continue and that RPC is on track to deliver further progress despite the current macro-economic uncertainties."
* adjusted profit before tax is operating profit before restructuring and impairment charges less net interest
For further information:
RPC Group Plc Ron Marsh, Chief Executive Pim Vervaat, Finance Director | 01933410064 |
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Kreab Gavin Anderson Robert Speed James Benjamin | 02070741800 |
