Bloomberg News

RPC Shares Rise on ‘Significantly Higher’ First-Half Forecast

September 30, 2011

Sept. 30 (Bloomberg) -- RPC Group Plc, a British maker of plastic containers for consumer goods, touched its highest in almost two months after saying first-half revenue will be “significantly” higher than a year earlier.

RPC rose as much as 24.4 pence, or 7.5 percent, to 351.4 pence, the highest since Aug. 3. It traded at 347.7 pence at 9:15 a.m. in London, rising for a fifth day, its longest winning streak since March. Adjusted profit before tax will probably beat management forecasts, RPC Group said in a statement today.

“The improvement in the first half year is encouraging and ahead of our expectations,” Chief Executive Officer Ron Marsh said. Revenue growth will come from the integration of Superfos Industries A/S and increased sales from stores open at least a year, the company said. RPC bought packaging-maker Superfos in February for 240 million euros ($324.9 million).

Operating profit will be higher than a year ago, driven by a “better sales mix, efficient cost base” and declining polymer prices, according to the statement.

“The pre-close statement has been good because of synergies from the Superfos acquisition, and savings from RPC’s 2010 restructuring program are actually showing, now that raw material prices are going down,” Craig Rachel, an analyst at Altium Capital Ltd. in London, said in a telephone interview. “Earlier, polymer prices were going up. And the impact on growth margins somewhat masked internal improvements.”

RPC Group posted revenue of 381.9 million pound and net income of 13.1 million pound in the first half of 2010. In June, Finance Director Pim Vervaat said the company is looking for additional acquisition opportunities.

--Editors: Tim Farrand, Peter Woodifield

To contact the reporter for this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge in London at Ckeatinge@bloomberg.net


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