RPC anticipates rise in H1 operating profits
By PRW Staff
Posted 28 September 2012
RPC Group told investors today it anticipated its first half operating profits to be up on the same period last year, thanks to factors including growth in higher added-value products and further synergies from last year's acquisition of Superfos.
In a pre-close trading update the rigid packaging specialist said overall trading levels were “generally anticipated to be on a similar level to last year”.
Despite what it called “general economic weakness” and a strengthening pound against the euro, RPC said operating profits were being driven up by growth in higher added value products, “the realisation of further Superfos synergies, cost efficiency measures and a less adverse impact from the time lag in passing through polymer prices to customers”.
Growth in higher added value products such as coffee capsules continued, the group said, “enhancing the overall sales mix, although some weaker market conditions such as industrial sales into the Spanish market were also experienced”.
What it called “significant investment” in its pharmaceutical operations was ongoing and enabling what it believed would be future higher added value growth in this area.
While operating profits would see a boost, RPC said revenue in the first half of the financial year as reported in sterling was projected to be lower than the corresponding period last year, "mainly as a consequence of the strengthening of the sterling versus the euro as a significant part of the group's turnover is recorded in euro”.
RPC noted that polymer prices had risen to record levels in April before reducing by more than 20% by the end of July. Subsequently they had increased again to near record levels by the end of September, it said.
Commenting on the first six months’ trading, RPC chief executive Ron Marsh said: “The improvement in the first half year is encouraging as it is achieved in a generally weak macro-economic environment.
“I believe RPC is well positioned to continue to deliver the performance necessary to achieve its stated aim of a 20% return on capital employed (ROCE) by March 2014.”
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