Weaker sterling boosts RPC in first quarter

The FTSE 250 firm said revenues in the three months to 30 June were significantly higher than the same period last year, due to underlying growth and the contribution of acquisitions.

Adjusted operating profit at constant currencies was also significantly ahead of both 2015, and management expectations, driven by increased sales volumes, the “realisation of synergies”, a reversal of last year’s polymer headwind and a better-than-expected contribution from Global Closure Systems.

RPC completed the acquisition of Global Closure Systems at the end of March.

The group said its results also benefited from a weaker sterling, as around 75% of its revenues are generated outside the UK.

“Good cash flow was achieved in the period and the group retains a robust financial position with significant headroom under its debt facilities,” the board said in its statement,

RPC said the organisational integration of GCS into its Bramlage division was progressing well and is now “substantially complete”.

It said the realisation of the anticipated €80m of total steady state synergies associated with the acquisition of GCS and Promens also remains on track.

During the period, RPC announced a recommended cash and share offer for the entire share capital of British Polythene Industries.

The board confirmed that BPI shareholders will vote on the proposal on 25 July and, subject to their approval, the acquisition - which has already received unconditional merger clearance from the European Commission - is expected to complete early August.

“The group's overall performance in the quarter was encouraging with GCS performing ahead of expectations,” said RPC chief executive Pim Vervaat.

“The anticipated addition of the BPI business will be another significant step in realising our Vision 2020 focused growth strategy.”

Vervaat said RPC is generally well-placed to operated in periods of macroeconomic uncertainty, including that which may be caused by the outcome of the Brexit referendum.

“The weakening of sterling enhances the competitiveness of the UK operations due to the higher cost of imports from mainland Europe, and the group's position as a modest net exporter from the UK may incrementally benefit its performance.”