Rigid plastic package supplier RPC (RPC) overcame flat economic growth in its core European market and high polymer prices to post a 4 per cent increase in like-for-like sales in the first half. International expansion played a key role, as the group's increasing exposure to North American and Asian markets boosted sales of higher-margin products.
Thanks to two new sites, the US now accounts for 5 per cent of group sales, up from under 3 per cent. Meanwhile, the June acquisition of ACE Corp, a Chinese plastic packaging and parts manufacturer, brings the number of factories in China up to seven. Asia now accounts for 6 per cent of group revenues.
What's more, RPC announced the acquisition of Iceland-based Promens Group for €386m (£306m) alongside these results. Promens has factories in 20 countries spanning North America, Asia and North Africa, and also brings RPC's market share in the £32bn European polymer market up to roughly 5 per cent. The deal will be part-funded with the proceeds of a proposed £200m rights issue. Despite chief executive Pim Vervaat's eagerness to pursue organic growth outside mainland Europe, he is confident the European economy won't "fall off a cliff".
Broker Deutsche Bank upgraded its EPS forecast for the current financial year by 5 per cent to 46.6p, rising to 50.0p in 2016.
RPC GROUP (RPC) | ||||
---|---|---|---|---|
ORD PRICE: | 577p | MARKET VALUE: | £1.1bn | |
TOUCH: | 575-577p | 12-MONTH HIGH: | 673p | 488p |
DIVIDEND YIELD: | 2.8% | PE RATIO: | 21 | |
NET ASSET VALUE: | 199p* | NET DEBT: | 85% |
Half-year to 30 September | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2013 | 525 | 30.1 | 13.4 | 4.5 |
2014 | 589 | 34.9 | 13.3 | 5.0 |
% change | +12 | +16 | -1 | +11 |
Ex-div:04 Dec Payment:16 Jan *Includes intangible assets of £356.3m, or 190p a share |