Destocking over and restructuring to continue, says profitable RPC

In figures published this morning for the six months to 30 September, the group reported sales down 8% at £351.9m, while pre-tax profit stood at £11.8m compared to a £1.4m loss in the first half of its 2008 financial year.

The drop in sales was attributed to customer destocking in the first half of the year although RPC said that there was evidence that clients were now starting to restock.

The group said that its RPC 2010 restructuring programme, which has been led by chief executive Ron Marsh and was first announced in June 2008, was ahead of schedule and that it had identified further opportunities to “structurally reduce its cost base” that would save the company £4m per year. It said that details would be announced in the second half of the year.

The RPC 2010 programme has already led to the closure of four sites in Italy, Holland and the Czech Republic, while the closure of Raunds in the UK is expected to complete by the end of the current financial year.

Elsewhere, RPC said that the decline in sales was the result of customer destocking in the first half of the year, especially in the personal care and pharmaceutical sectors.

“It does appear that customer de-stocking in the majority of the end sectors that RPC supplies has now run its course,” the group said. “Nonetheless, activity levels continue to be substantially lower than those recorded in 2007/08.”

RPC chairman Jamie Pike said the group had “made good progress with an encouraging first half profit and cash performance in challenging market circumstances.”

He added: “Further cost savings opportunities have been identified and will be incorporated in the RPC 2010 programme which so far has delivered the anticipated benefits.

“Although short-term volume weakness persists, the board continues to believe that RPC’s prospects are good with strong market positions and an increasingly efficient cost base.”

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