RPC posts record profits, tables UK plant closure

By Rory Harrington

- Last updated on GMT

Related tags: Investment

RPC posts record profits, tables UK plant closure
RPC Group yesterday posted record year-end results thanks to growth in high end product sales, added revenue from the Superfos takeover and the completion of its wide-ranging efficiency programme.

However, the UK-based rigid plastic packaging company revealed that it wanted to close a UK site owned by Superfos after a post-merger review.

It also declared that it was in the market for more acquisitions

“There is a demand for a bit more sophisticated packaging in the emerging market, so we are looking to further increase our exposure,"​ finance director Pim Vervaat told Reuters.

Full year figures

Reeling off a list of good news statistics, RPC said its adjusted operating profit has soared 36 per cent to a record ₤56m, while net profits leapt 94 per cent to ₤25.6m.

Sales jumped by ₤99m to ₤819m, thanks to a 9 per cent like-for-like growth and a ₤37.5m contribution from Superfos since the takeover of the company in mid February.

“Driving the growth are sales of higher added value products into sectors such as coffee capsules, personal care, long shelf-life and pharmaceuticals”,​ said the company.

RPC said that record polymer prices had seen material costs rise to 36 per cent of company turnover by the end of March – compared to 30 per cent in the previous year.

Price rises and easing supply tensions

Price rises reaching 20 per cent in the 12-month period had been passed on to customers. However, RPC said the time lag in being able to do this had had “a significant negative impact of full year margins”. ​The company said it was confident it could continue to pass on future polymer rises.

It also said it expected supply tensions to ease.

“The underlying supply-demand dynamics of the polymer market are expected to be relatively favourable as significant additional polymer capacity continues to come on stream,”​ it said.

RPC hailed the positive effect of the acquisition of Superfos. As well as projecting the new asset would bring annual cost and revenue synergies reaching ₤25m from 2014 onwards, it added that working capital benefits of ₤12m had already been realised in the current financial year.

But the company said that in the aftermath of the takeover, it was proposing the closure of Superfos’ plant in Runcorn, England. The shutdown was expected to be completed by June 2012.

RPC pledged that innovation would continue in the next year as a result of the ₤198m acquisition from Denmark – with lightweighting a particular focus

“During the year several innovative designs have come to market, whilst process developments with the aim of producing lighter weight packaging continued to make good progress,”​ said the firm. “The trends for light-weighting and conversion from other packaging materials such as glass and metal continue as customers aim to reduce the weight of packaging in line with their sustainability policies.”

RPC sounded an optimistic note as it said it was bidding to see a return on capital investment next year of 20 per cent.

Related topics: Processing & Packaging

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