RPC Group achieves record half year profit

Plastic products maker RPC Group achieved record half year revenue and profit on the back of its so-called ‘Vision 2020’ strategy.

In the six months ended 30 September, revenue rose 53% to £1.2bn, boosted by the acquisitions of Global Closure Systems and British Polythene Industries along with about 3% underlying organic growth.

During the period, the company saw like-for-like sales rise 3%, with growth in packaging and non-packaging segments.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 65% to £198.5m and adjusted profit rose 65% to £136.3m with return on sales at 11.1%, compared to 10.3% the same period a year earlier.

Adjusted pre-tax profit gained 66% to £125.5m and adjusted basic earnings per share grew 45% to 30.7p.

Free cash flow surged 107% to £118.2m. The interim dividend was raised 35% to 6.5p.

“As we successfully execute our stated Vision 2020 strategy, further attractive opportunities to grow the group present themselves as the pace of consolidation in the industry accelerates,” said chief executive Pim Vervaat.

“Good opportunities exist for higher added value organic growth whilst at the same time consolidating certain market positions. The second half year has started well."

Under Vision 2020, the company has been undergoing selective consolidation in the European plastic packaging market through targeted acquisitions. The group is also aiming to create a presence outside Europe where growth rates in gross domestic product are considerably higher.

Shares jumped 8.78% to 1,090p at 0921 GMT.