A 30 per cent increase in RPC Group’s (RPC) adjusted operating profits reflects how well recent acquisitions have bedded in at the plastics packaging specialist. But chief executive Pim Vervaat maintains that "RPC is committed to growing its core business" through the ongoing implementation of the Vision 2020 growth strategy - a point borne out by a 4 per cent increase in organic sales.
Aside from internal growth, the strategy is focused on consolidation in the European packaging market. To this end, the group acquired Promens Group last November for €386m (£298m). The deal not only increased the scale of RPC’s European operations and improved its technical capabilities, but it has also already delivered much greater cost synergies than originally anticipated. And just prior to the March year-end RPC gained access to the fast growing PET (polyethylene teraphthalate) packaging market in mainland Europe through the acquisition of Dutch blow-moulder PET Power.
Trading conditions in many of RPC's European markets remain subdued. Yet the group has taken steps to increase its presence in markets outside Europe where growth rates are higher. These include last year’s $301m (£195m) deal to buy Hong Kong-based ACE Corp, one of the Far East's leading manufacturers of plastic injection moulded components.
Panmure Gordon expects adjusted EPS of 46.5p for the year to March 2016, against 40.9p for FY 2015.
| RPC GROUP (RPC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 623p | MARKET VALUE: | £1.6bn | |
| TOUCH: | 623-624p | 12-MONTH HIGH: | 645p | Low: 433p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 230p* | NET DEBT: | 74% | |
| Year to 31 March | Turnover (£bn) | Pre-tax profit ($m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 † | 0.82 | 34.6 | 17.9 | 10.6 |
| 2012 † | 1.13 | 59.6 | 25.5 | 13.2 |
| 2013 † | 0.98 | 48.2 | 19.0 | 13.7 |
| 2014 † | 1.05 | 59.0 | 23.5 | 13.8 |
| 2015 | 1.22 | 67.1 | 20.8 | 15.4 |
| % change | +16 | +14 | -11 | +12 |
Ex-div: 6 Aug Payment: 4 Sep *Includes intangible assets of £565m, or 224p a share †Restated with per share figures adjusted for the bonus element of the 1-for-3 rights issue. | ||||
