Exit from vending cup, automotive markets on course / Continuing Superfos synergies / Significant financial headroom
The exit of rigid plastic packaging leader RPC Group
(Higham Ferrers, Rushden / UK; www.rpc-group.com
) from the vending cups market in Western Europe (excluding the UK) and the supply of automotive components in Germany, announced in January 2012, is on course and progressing to plan, according to the company’s interim management statement of 18 July. RPC has said both businesses are loss-making, despite annual revenues of GBP 16m (EUR 20m), and that the exit from them would be by sale or closure – expected to be concluded by the end of 2012. Exceptional costs will be incurred, but the associated cash impact is anticipated to be positive. Meanwhile, the closure of the Superfos
plant in Runcorn / UK has been completed successfully within the expected timeframe, with business transferred to other sites - see Plasteurope.com of 15.05.2012
RPC Group's CEO Ron Marsh (Photo: RPC)
Reporting on financial performance in RPC’s first quarter (1 April-30 June), group chief executive Ron Marsh said operating profit was satisfactory and in line with management expectations. The business has been benefiting from the improved sales mix and further Superfos synergies. Gross margins had been hit by the time lag in passing through higher polymer prices, but this is expected to reverse in the second quarter, with selling prices adjusted upwards and raw material costs falling. Marsh termed cash flow performance as satisfactory and said the group’s financial position has improved from the same period last year.
Capital expenditure at RPC is continuing to run above depreciation level, with significant investments being made in growth areas such as pharmaceutical products and coffee capsules. This commitment to increasing the level of added-value products is sure to continue organically – and could be supplemented by acquisition, as RPC says it has significant headroom under the group’s financing facilities.
23.07.2012 Plasteurope.com [222901-0]
Published on 23.07.2012