RPC Group revenue to be 'significantly ahead' of last year

Plastics company RPC Group anticipates that full year revenue will be “significantly ahead” of last year, due to contributions from acquisitions and organic growth.

Adjusted operating profit for the year ended 31 March is also expected to be ahead of forecasts.

The FTSE 250 company maintained that its financial position is “robust” with good cash flow development and that with the proceeds from last month's rights issue received and following the Letica acquisition it has “significant headroom” in its debt facilities, which include a new $750m loan.

During the past year RPC has made several acquisitions and has some in the pipeline. The company bought French bottle-top maker Global Closure Systems for £472m in March 2016 and Scottish packaging company British Polythene Industries for £261m in August 2016, which are both “integrating well” and performing ahead of expectations.

The company recently bought Dutch-owned storage solutions company ESE World for £218m and US packaging rival Letica for $640m and has is expected to buy South African plastic packaging firm Astrapak for about £79m later this year.

Chief executive Pim Vervaat said: "The board will continue to implement the Vision 2020 focused growth strategy, in which leading design and engineering capabilities create value in chosen market segments.

“At the same time the group is looking to grow selectively in a consolidating industry whilst further enhancing its strategic buying position."

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said there was little to surprise investors from RPC's announcement with steady underlying growth and progress on the integration of its many acquisitions.

"Following the rights issue that accompanied the North American Letica acquisition the group has re-loaded the war chest and looks prepared to return to the market.

"However, with several pretty sizeable plates already spinning we would prefer that the company sticks to smaller bolt-on deals for a while, at least until the newly enlarged group is properly settled," he said.

Shares in RPC Group were up 2.16% to 898p at 0801 BST.