RPC GROUP
Acquisitions targeted following highest-ever operating profit / Good cash flow and reduced net debt / Cost base still going down
Opportunities for organic and acquisitive growth are being actively explored at RPC Group (Higham Ferrers, Rushden / UK; www.rpc-group.com) - Europe’s leading supplier of rigid plastics packaging - following a year that achieved strong cash flow performance, a record adjusted operating profit and good progress in its RPC 2010 improvement programme. The adjusted operating profit improved by 15% to GBP 40.9m (EUR 49.1m) in the year to 31 March 2010 with the ROCE (return on capital employed) increasing to 11.8% (2009: 9.1%). Sales were down 6% to GBP 719.9m, but the pretax performance improved dramatically, rising from a loss of GBP 4.5m in 2009 to GBP 19.2m. There was free cash flow of GBP 60.1m and the net debt was reduced from GBP 116.6m to GBP 80.2m
The Bramlage-Wiko and UK injection moulding operations achieved an adjusted operating profit of GBP 20.7m on revenues down 3% at GBP 303.5m. Volumes improved slightly in the UK, mainly as the result of recovery in the DIY retail sector, but Bramlage-Wiko suffered from an extended period of de-stocking in the first half-year and demand for cosmetics and high-end personal care products remained subdued throughout the year. The Bramlage DHS site in Ravenstein / The Netherlands was closed during the year and the staff level at the Marolles / France facility - now part of the Bramlage-Wiko cluster - is being reduced by 23% to realign its capacity with the underlying demand for cosmetics.
Revenue was down 9% to GBP 264.6m for the group’s thermoforming activities, mainly due to lower volumes. As a result, adjusted operating profit slipped from GBP 12.9m to GBP 11.7m, although the return on sales was steady at 4.4%. Both the thermoforming and barrier sheet operations are continuing to benefit from the trend to glass and can replacement, with continuing growth anticipated in the baby food segment in particular. Business for barrier packs for functional foods also continues to develop. Closure of the plant in Aš / Czech Republic was completed and further reorganisation is planned in The Netherlands, including closure of the Goor site - see Plasteurope.com of 29.03.2010.
In blow moulding the adjusted operating profit improved significantly, from GBP 4.9m to GBP 8.5m, even though revenues were down 8% to GBP 157.2m. The better profit performance was largely attributable to restructuring under the RPC 2010 programme. Production at Halfweg / The Netherlands ceased in October 2009 and was transferred to Kerkrade. In the UK, manufacture was halted at the Raunds site, ahead of schedule, with production transferred to Plenmeller and Rushden without any loss of business.
Chairman Jamie Pike is expecting further progress towards achieving a 15% ROCE in the current financial year as the group is emerging from its restructuring operations with a substantially lower cost base and an enhanced competitive position. The steady state structural benefits of RPC 2010 are currently estimated to be at least GBP 19m annually, of which some GBP 14m had been realised by March 2010. Other measures are reducing the cost base by a further GBP 4m. The opportunities for acquisition are being explored both in the European market and in less mature, higher growth markets outside Europe.
e-Service: RPC Group’s preliminary results for the year ended 31 March 2010 as a PDF document
The Bramlage-Wiko and UK injection moulding operations achieved an adjusted operating profit of GBP 20.7m on revenues down 3% at GBP 303.5m. Volumes improved slightly in the UK, mainly as the result of recovery in the DIY retail sector, but Bramlage-Wiko suffered from an extended period of de-stocking in the first half-year and demand for cosmetics and high-end personal care products remained subdued throughout the year. The Bramlage DHS site in Ravenstein / The Netherlands was closed during the year and the staff level at the Marolles / France facility - now part of the Bramlage-Wiko cluster - is being reduced by 23% to realign its capacity with the underlying demand for cosmetics.
Revenue was down 9% to GBP 264.6m for the group’s thermoforming activities, mainly due to lower volumes. As a result, adjusted operating profit slipped from GBP 12.9m to GBP 11.7m, although the return on sales was steady at 4.4%. Both the thermoforming and barrier sheet operations are continuing to benefit from the trend to glass and can replacement, with continuing growth anticipated in the baby food segment in particular. Business for barrier packs for functional foods also continues to develop. Closure of the plant in Aš / Czech Republic was completed and further reorganisation is planned in The Netherlands, including closure of the Goor site - see Plasteurope.com of 29.03.2010.
In blow moulding the adjusted operating profit improved significantly, from GBP 4.9m to GBP 8.5m, even though revenues were down 8% to GBP 157.2m. The better profit performance was largely attributable to restructuring under the RPC 2010 programme. Production at Halfweg / The Netherlands ceased in October 2009 and was transferred to Kerkrade. In the UK, manufacture was halted at the Raunds site, ahead of schedule, with production transferred to Plenmeller and Rushden without any loss of business.
Chairman Jamie Pike is expecting further progress towards achieving a 15% ROCE in the current financial year as the group is emerging from its restructuring operations with a substantially lower cost base and an enhanced competitive position. The steady state structural benefits of RPC 2010 are currently estimated to be at least GBP 19m annually, of which some GBP 14m had been realised by March 2010. Other measures are reducing the cost base by a further GBP 4m. The opportunities for acquisition are being explored both in the European market and in less mature, higher growth markets outside Europe.
e-Service: RPC Group’s preliminary results for the year ended 31 March 2010 as a PDF document
22.06.2010 Plasteurope.com [216555]
Published on 22.06.2010