RPC GROUP
Improved operational performance / Debt reduced / More rationalisation identified
Rigid plastic packaging manufacturer RPC Group (Higham Ferrers, Rushden / UK; www.rpc-group.com) managed to achieve a 19% improvement in its operating profit of GBP 19.1m (EUR 21m) in the six months to 30 September 2009. Sales were down 8% at GBP 351.9m, but a pretax profit of GBP 11.8m stood in sharp contrast to the loss of GBP 1.7m recorded in the first half of 2008. Strong cash generation provided a free cash flow of GBP 24.7m and net debt was reduced to GBP 102.8m compared with GBP 154m at 30 September 2008.
Chairman Jamie Pike termed it an encouraging performance in challenging market conditions. The RPD 2010 rationalisation programme, which included the closure of five sites (see Plasteurope.com of 02.10.2008, 05.12.2008 and 13.2.2009), had delivered its anticipated benefits, he said, adding that further cost-saving benefits, to the tune of GBP 4m a year, would be incorporated into the programme as well.
Despite lower volumes, operating profit increased 5.9% to GBP 9m in the RPC injection moulding business, although sales were down only 3% at GBP 143.4m. UK sales held up well year-on-year, but remain substantially lower than in 2007/08. The Bramlage-Wiko facility's operations suffered from extensive customer de-stocking early in the year and the economic slowdown is also taking its toll. The Bramlage DHS site in Ravenstein / The Netherlands was closed and business transferred to other sites.
Sales returns improved to 4.8% this year compared to 3.8% in the first half of 2008. As a result, operating profit in the thermoforming business increased to GBP 6.3m, although sales were down 10% at GBP 131.5m. Demand for margarine containers held up well, while PET sheet sales benefited from the development of new applications and there was good progress in oxygen barrier packaging for long shelf-life foods. RPC’s plant in the Czech Republic was closed and operating efficiencies improved at other sites, notably in the UK.
The blow moulding business did well, the company said, with operating profit increasing 90% to GBP 3.8m. Sales fell 11% to GBP 77.0m. There were signs of improved demand in the UK starting September, but activity levels remained low in mainland Europe. Production at Halfweg / The Netherlands ceased in October with the business transferred to Kerkrade / The Netherlands, while the closure of the Raunds / UK site is progressing, with more than half the machines already transferred to Rushden / UK.
Looking forward, Pike says that, “Prospects are good with strong market positions and an increasingly efficient cost base”. The group’s financial position is expected to remain “robust”.
Chairman Jamie Pike termed it an encouraging performance in challenging market conditions. The RPD 2010 rationalisation programme, which included the closure of five sites (see Plasteurope.com of 02.10.2008, 05.12.2008 and 13.2.2009), had delivered its anticipated benefits, he said, adding that further cost-saving benefits, to the tune of GBP 4m a year, would be incorporated into the programme as well.
Despite lower volumes, operating profit increased 5.9% to GBP 9m in the RPC injection moulding business, although sales were down only 3% at GBP 143.4m. UK sales held up well year-on-year, but remain substantially lower than in 2007/08. The Bramlage-Wiko facility's operations suffered from extensive customer de-stocking early in the year and the economic slowdown is also taking its toll. The Bramlage DHS site in Ravenstein / The Netherlands was closed and business transferred to other sites.
Sales returns improved to 4.8% this year compared to 3.8% in the first half of 2008. As a result, operating profit in the thermoforming business increased to GBP 6.3m, although sales were down 10% at GBP 131.5m. Demand for margarine containers held up well, while PET sheet sales benefited from the development of new applications and there was good progress in oxygen barrier packaging for long shelf-life foods. RPC’s plant in the Czech Republic was closed and operating efficiencies improved at other sites, notably in the UK.
The blow moulding business did well, the company said, with operating profit increasing 90% to GBP 3.8m. Sales fell 11% to GBP 77.0m. There were signs of improved demand in the UK starting September, but activity levels remained low in mainland Europe. Production at Halfweg / The Netherlands ceased in October with the business transferred to Kerkrade / The Netherlands, while the closure of the Raunds / UK site is progressing, with more than half the machines already transferred to Rushden / UK.
Looking forward, Pike says that, “Prospects are good with strong market positions and an increasingly efficient cost base”. The group’s financial position is expected to remain “robust”.
07.12.2009 Plasteurope.com [214982]
Published on 07.12.2009