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At around 700 this would be a very attractive investment.The very low oil price will be a helping the company increase its profits as oil is the raw material used in the plastics industry in which RPC is the leader.
Patience. Remember Warren Buffet's advice about holding good shares for the long term.
Couldnt agree more,one that Questor got spot on.And i think will hit 800 in no time.Wish i had held longer,but sold out too soon.
What a terrific share. Wish all my portfolio performed in this manner.
RPC shares for long term growth: RPC’s shares are looking cheap after the plastic packaging group reported better-than-expected profits and said it would make larger savings from a recent acquisition. The FTSE 250-listed company is seeing higher sales from new products such as disposable coffee capsules and plastic paint containers, as the U.K. housing boom boosts DIY. Total group revenue increased by 17% to £1.22 billion in the 12 months to the end of March, while pretax profits increased by 14% to £67.1 million. Because RPC has a March financial year end, next year’s results should benefit from a whole year of trading following the Promens deal. Market consensus is for group revenue to increase by 40% to £1.7 billion, and adjusted pretax profits to jump 28% to £153 million. In the long run RPC is able to pass these price rises onto consumers, but in the short term it will drag on profits in the first half. Questor thought the shares looked cheap following the Promens deal (580p, November 28) and since then investors have enjoyed gains of 10%. The savings from the deal are ahead of schedule and we are comfortable retaining our initial advice. RPC at 634.5p +16.5p. Questor Says “Buy”.
RPC cheap after biggest ever deal: RPC shares look cheap after the plastic packaging group agreed its largest ever acquisition, sending shares more than 5% higher. The FTSE 250-listed plastics company makes lightweight rigid plastic products. RPC’s fastest-growing markets is coffee capsules for machines. The company said it is buying Icelandic-owned rival Promens for €386 million (£306 million), and part of the deal will be funded through a £200 million discounted rights issue. That means investors are being asked to dig deep into their pockets, but in this case it looks like a sensible deal. The completion of so many acquisitions in such a short period of time brings risks for investors. However, RPC has an excellent track record, having successfully integrated the Superfos acquisition from 2010. Net debt is expected to increase to about £460 million by the end of March 2015, up from £216 million a year earlier. The company is cash generative, which should allow it to quickly reduce debt levels. The falling oil price will also help RPC as oil is the raw material for making plastic polymer. The company previously said profits took a £3 million hit when oil prices increased sharply, so the rapid fall in the oil price from June onwards should provide a boost to profits. Alongside these deals, RPC said revenue in the first half increased 12% to £588.9 million and pretax profits were up 16% to £34.9 million. The total dividend payout this year is expected to be 17.2p, a 10% year-on-year increase, rising to 18.3p next year. This will represent the 22nd consecutive year that the company has increased its payout, and the prospective yield is 3.1%. The group trades on a forward earnings multiple of 12, falling to 11.3, but that doesn’t even fully include the recent acquisition. Questor thinks that looks cheap given the rapid growth of profits at the company. Questor advised buying the shares last year (407.7p, June 6) and since then investors have enjoyed gains of 42%. The recent acquisitions look well priced and we are comfortable retaining our initial advice. RPC at 580p+33p. Questor Says “Buy”.
Got out a year ago doh! That's shares for you GLA.
There's clearly support in the City for RPC - we hear that a £75m placing at 600p to part-fund the ACE deal, due to complete soon, was more than two times oversubscribed. A programme to save £12m of costs is entering its final phase, too, and results out on 4 June will meet forecasts. Broker JPMorgan has already upgraded EPS forecasts for the year to March 2015 by 4 per cent, and by 7 per cent for the year after. That means roughly double-digit growth for the next three years, poorly reflected in a forward PE ratio of under 13 and an enterprise value-to-cash profits ratio of seven. That discount to peers should really be a premium
Annual savings should reach £1m and RPC's blue-chip customer base is already opening doors for ACE. Organic operating profit has rocketed from just HK$94m (£7.2m) in 2011 to HK$245m last year on revenue up from under £58m three years ago to £104m in 2013. And both growth and margins have accelerated every year. First-quarter sales were "materially higher", too, although lower demand from the US motor industry due to bad weather and launch costs for a new iPad Air product meant profitability was flat. But those issues are one-offs, and demand, especially in Asia, is high. More rigid plastic containers are used there than anywhere else - about 30 per cent of global volumes - and consultancy Pira International forecasts a compound annual growth rate (CAGR) of about 10 per cent for the five years to 2018. And ACE management is obviously comfortable signing up to that earn-out which demands cash profit CAGR of at least 15.6 per cent out to 2017, weighted to year four. ACE does 30 per cent of its business in China, 38 per cent across the Americas and 13 per cent elsewhere. Less than a fifth of sales are to Europe. RPC already makes two-thirds of profits in euros and translating that into sterling hits earnings, which is why RPC wants to build a big presence elsewhere. Since launching its Vision 2020 plan last November, it has paid £103m for UK-based Maynard & Harris (M&H), which has a growing US business, and bought a Bosnian company called Helioplast with sales in eastern Europe. Both will boost earnings this year. (Global growth should be double the rate in Europe, says Pira.)
Things could get a bit messy without RPC Group (RPC). Its rigid plastic packaging houses everything from margarine and Ragu pasta sauce to Nivea sun lotion and hair care products for L'Oréal. Business is growing fast and a series of clever acquisitions could drive earnings up by 25 per cent next year. But with RPC's shares still trading at a big discount to peers, we feel the substantial benefits are yet to be priced in. Management has always bought well. Since paying £205m for Danish company Superfos at the bottom of the market in 2010, underlying earnings per share has surged by more than a third and RPC's share price has doubled. Now, it has snapped up China's ACE Corporation, one of the Far East's biggest manufacturers of plastic injection moulded components and injection moulding tools, for £255m - £178m upfront and the rest on earn-out over four years. ACE has been around for 25 years and is clearly very good at what it does. As well as traditional plastic packaging, it makes remote control car keys, engine parts, waterproof iPhone cases, syringes, golf tees and power switches. Half the business is home accessories and consumer electronics work for giants such as Philips, Unilever and P&G, and a fifth is automotive, both fast-growing sectors. And a multiple of 7.4 times cash profit on the initial consideration looks fair for the growth on offer.
Still very reluctant to move.Hurry up.
It isn't moving
RPC
need over 400p here
quicker progress needed here
into here,was impressed with results,seems quiet here tho.
It added that it expects the polymer time lag effect will have a positive impact in the final quarter as selling prices will be increased to reflect the higher polymer prices experienced in the third quarter. "The financial position remains robust with satisfactory cash flow development in the third quarter and significant headroom under the group's debt facilities," the company said.
Ron Marsh, RPC's Chief Executive said: "Activity levels have been encouraging in what continues to be a challenging market environment. The financial performance in the last quarter of the financial year is set to improve as selling prices are adjusted to reflect increased polymer prices. The continued growth in higher added value products and the cost savings from the Fitter for the Future programme give me confidence for the future." The group experienced an anticipated decline in third quarter operating profit, but said when adjusted for the effect of an adverse time lag in passing through polymer price variations to the customer base, profitability during the period on a constant currency basis improved due to the enhancement of the sales mix and cost efficiency measures. It added that it expects the polymer time lag effect will have a positive impact in the final quarter as selling prices will b
RPC Group, the European supplier of rigid plastic packaging, revealed sales volumes in the third quarter of the financial year 2012/13 were on a similar level to the corresponding period of the previous year, despite a more extended shut-down by many customers this Christmas. The group has seen generally good levels of activity in January, notwithstanding the challenging macro-economic conditions, and said the improvement in the sales mix towards higher added value products such as coffee capsules has continued. The group's recently launched "Fitter for the Future" business optimisation project has progressed well, and said other cost efficiency measures are also progressing to plan, while one of the redundant properties is anticipated to be sold this financial year.
RPC’s H1 results in November continued to show the benefits of actions taken over the last year, but also saw a more restrained view of prospects manifesting itself through a less expansionary capex programme and a new ‘Fitter for the Future’ targeted business improvement plan. We have reduced earnings estimates modestly, but RPC remains solidly positioned with manageable net debt and good cash credentials that will enable it to take advantage of attractive opportunities as they arise to sustain a ROCE approaching 20%.
After their fall, RPC's shares now trade at nine times forecast earnings. That looks cheap for a company that has delivered impressive growth. In the period 2007-12 growth in basic earnings was 21 per cent a year compound and in dividends it was 17 per cent. Sure those rates will be tough to maintain and analysts only forecast dividend growth of 4 per cent a year from here. But dividends are well covered by earnings, so RPC should not have to do anything special to hit that target. Packaging is a cyclical business and RPC has flagged that it is going to have a tough second half, but that looks fully in the share price..........gl all.
However, while RPC's sales volumes are falling - down 3 per cent in the first half - management is shifting the focus towards higher-margin products where there is better growth. Think of moving from making margarine tubs to making capsules for the fast-growing market for s****y coffee-making machines. So, despite the tough backdrop and the one-off costs, the underlying business is improving; adjusted operating profits rose 4 per cent to £47m and margins climbed from 7.7 per cent to 9.1 per cent. RPC also announced a new two-year cost-saving plan, 'Fitter for the Future'. Management says that, even if trading volumes stay flat, the programme will deliver £4m profit improvement this year, £10m next year, reaching £12m per year in two years' time. This won't come cheap - there is a price tag of around £30m in exceptional costs, including £15m of cash costs, with the majority coming in the second half of this year.
Shares in RPC (RPC) plunged 11 per cent as the company announced a sharp fall in profits and investors fretted about its exposure to the eurozone. But, underneath the headline figures, operating profitability is improving and, as the plastics packaging group announces another two-year cost reduction plan, we think the sharp correction could present a good opportunity to buy the shares. For a company with a strong track record of exceeding the City's expectations, the results for the half-year to end September were a shock. Revenue fell 12 per cent to £518m and reported pre-tax profits were down from £35m to £22m. Stockbroker Panmure Gordon responded by reducing forecasts for the full year from £86.3m to £83.5m (giving EPS of 37.9p) and for 2013-14 from £92.5m to £90.1m (EPS of 40.9p). There is no doubt conditions are tough for RPC as it makes 64 per cent of its money in Europe and the value of the euro slumped between last year's first half and this year's, hitting profits reported in sterling. RPC is also pushing through a major restructuring plan to adapt the business to reduced volumes. A site at Runcorn in the north-west was closed, but further restructuring was needed to integrate its £205m acquisition of Superfos, which makes injection-moulded containers. As a result, exceptional costs were up sharply from £4.1m to £18.5m
Panmure Gordon maintained its "buy" recommendation on RPC Group (RPC), with a target price of 491p, on the back of the company's recently published interim results. The broker believes that the results show solid progress, despite ongoing macro pressure and the significant impact of FX given the size of European revenues. The broker is particularly impressed with the company's proposed efficiency plan to be launched next year, which should add 12 million pounds in steady state benefits to the bottom line by 2016.
"The ROCE target set following the Superfos acquisition has been largely achieved but with the prospect of prolonged macro-economic weakness the group has embarked on the 'Fitter for the Future' optimisation programme to ensure that this level of performance can be sustained. Opportunities to grow the business from a position of financial strength through innovation and acquisitions continue to be explored." The Fitter for the Future programme if focused on optimising the group's mainly European product market combination and includes a range of further cost efficiency measures such as the proposed closure of the Antwerp (Belgium) and Beuningen (Netherlands) sites, medium-term Superfos synergies and the disposal of redundant properties.