Rpc Group Regulatory News (RPC)

1 February 2018

RPC Group Plc

Third quarter trading statement

RPC Group Plc ("RPC" or "Group"), a leading international plastic products design and engineering company, today releases its scheduled trading statement for the third quarter.

Q3 trading performance

Revenue for the quarter ended 31 December 2017 was £898m, representing 31% growth versus the third quarter last year, and benefitted from acquisitions, polymer price tailwinds and organic growth of over 4%.

As at the end of the third quarter the year to date organic growth rate was 2.6%.

Profitability (before and after exceptional items) was in line with management expectations and grew significantly versus the prior year, aided by organic growth and the further realisation of synergies which offset an adverse polymer time lag impact. Cash generation (before and after exceptional items) was also in line with management expectations and the Group maintains a robust financial position.

UK Government environment plan and EU plastics strategy

As Europe's leading recycler of polyethylene film, RPC recognises the importance of recent announcements to reduce plastic waste and promote the recycling of plastics across Europe, and will continue to work directly with the policy makers and industry bodies to best achieve these aims. The majority of the Group's products are recyclable and it is strongly placed through its numerous innovation centres to design and develop products that are more easily recyclable. Overall, RPC is well positioned to promote behavioural change and increased recycling. Additionally, the Group is actively researching bio-based polymers that avoid the use of fossil fuels in their production and compostable materials that break down completely when treated correctly at the end of their life.

Capital allocation

On 19 July 2017 RPC announced an inaugural share buyback programme of up to £100m. Under the programme to date, 7.93m million shares have been acquired for a total consideration of £69.4 million. In addition, in anticipation of re-financing elements of its capital structure and funding resources, the Group announces that it has obtained an investment grade rating of Baa3 (Stable outlook) from Moody's Investors Service and a rating of BB+ (Positive outlook) from S&P Global Ratings.

Executive remuneration review

As announced in the AGM trading statement in July 2017, the Remuneration committee is reviewing the performance metrics within both the annual bonus and long-term incentive plan with a view to clarifying and further emphasising returns on capital and cash flow generation. The outcome of this limited review will be confirmed at the Group's full year results on 6 June 2018. The review is being conducted within the current remuneration policy, which itself is scheduled for review next year.

Impact of US tax legislation

The recently enacted Tax Cuts and Jobs Act in the US, which will reduce the federal corporate income tax rate from 35% to 21%, is applicable from 1 January 2018.

For the year to 31 March 2018 it is currently expected that the US reforms will have a small positive impact on the Group's adjusted effective tax rate, with a one-off non-cash tax credit of c.£10m resulting from the revaluation of US related deferred tax assets and liabilities.

For the year to 31 March 2019 it is currently expected that the changes will reduce the Group's adjusted effective tax rate by approximately 1%, based on the existing mix of profits.

Commenting on the performance, Pim Vervaat, RPC's Chief Executive, said:

"I am pleased with the performance of the business in the third quarter and the further progress towards completing the European synergy programme. Through our focus on innovation, sustainability and operating in attractive end markets, we remain confident in continuing to grow through the cycle ahead of GDP and that our Vision 2020 strategy will deliver further value to our shareholders".

For further information:

About RPC Group:

RPC is a leading plastic products design and engineering company for packaging and selected non-packaging markets, with over 32 innovation centres and 194 operations in 34 countries, and employs c.25,000 people. The Group develops and manufactures a diverse range of products for a wide variety of customers, including many household names, and enjoys strong market positions in many of the end-markets it serves and the geographical areas in which it operates. It uses a wide range of polymer conversion technologies in both rigid and flexible plastics manufacture, and is now one of the largest plastic polymer converters in Europe, combining the development of innovative packaging and technical solutions for its customers with good levels of service and support.

For further information please visit: www.rpc-group.com

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