RPC optimistic despite full-year pre-tax loss

The rigid plastic packaging group this morning revealed sales of £769.1m for the financial year ending 31 March, an increase of 11% on 2007/8. The pre-tax loss of £4.5m compares to a £9.8m pre-tax profit in the previous 12 months.

RPC described the results as “satisfactory” due to the impact of the credit crunch and unprecedented polymer and energy cost pressures in the first half of the year.

Chief executive Ron Marsh told Packaging News the firm was pleased with the cashflow situation and net debt that was reduced by 22% to £117m.

RPC has benefited in the last year from its RPC 2010 restructuring plan that followed the strategic review, and five plant closures have already been announced, including Raunds in the UK. “Some of the other benefits from RPC 2010 have come through cost reduction,” added Marsh.

He said that while the UK had entered recession before other European countries, the DIY and building markets RPC serves had recovered quite considerably in recent weeks. “Paint containers, which were severely hit last year, have picked up significantly over the spring,” said Marsh.

Marsh expressed caution over short-term volumes but said the long-term outlook for RPC was extremely good. “I think rigid plastics continues to be a growth industry and the competitive situation is improving. The long term is excellent.”

RPC chairman Jamie Pike echoed Marsh’s confidence in the firm’s future performance.

“The new financial year has started satisfactorily in what continues to be a poor economic environment which may restrict our progress in the short term,” he said.

“I am convinced, however, that RPC has good prospects with improving industry dynamics and the successful completion of RPC 2010.”

· RPC has decided not to sell its German and eastern European distribution business at the moment, as previously announced, as it was not impressed by the offers it had received. The business recorded some £14m sales last year.

RPC FULL-YEAR RESULTS 2008/9

Sales £769.1m (11% increase on 07/08)
Adjusted operating profit £35.5m (-13%)
Pre-tax loss £4.5m (£9.8m profit in 2008)
Share price (as at 9am) £1.70