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RPC reports third quarter revenue growth as takeover battle heats up

The FTSE 250 plastic products maker reported revenues for the quarter ended 31 December of £894mln, ahead of the same period a year ago

Plastic bag globe
RPC also said it was in discussions with US rival Berry after it gatecrashed a takeover offer on Thursday

RPC Group PLC (LON:RPC) has reported revenue growth for the third quarter, while in the background a takeover battle continued to rage over the firm’s future.

The FTSE 250 plastic products maker reported revenues for the quarter ended 31 December of £894mln, ahead of the same period a year ago and reflecting organic growth of 1.4%, however, it added that sales had moderated towards the end of the period due to “weak trading around the Christmas period”.

READ: RPC shares jump above Apollo’s offer price as US packaging giant Berry enters the fray

Organic growth for the first three quarters to the end of 2018 stood at 2.6%.

Meanwhile, RPC said its operating profit from continuing operations was “similar” to the same period a year ago, while a time lag in passing polymer price increases through to customers resulted in a temporary headwind of £10mln at the end of the first six months of the year.

However, RPC said its financial position was “robust” with “significant headroom available under existing debt facilities”, adding that it was finalising preparations to mitigate any disruption from Brexit.

The preparations, which included manufacturing sites building up “buffer stocks”, had resulted in a negative impact on working capital and cash flow, RPC said, while net finance costs in the quarter were higher than a year ago due to increased net debt, LIBOR increases and margin rachets.

The firm also said it would engage with Berry Global regarding a possible takeover offer after the US rival gatecrashed a £3.3bn bid from asset manager Apollo Global on Thursday.

RPC also said during the quarter it had completed the disposal of its non-core spirits closures business for a consideration of £19mln while also acquiring German thermoforming business Neluplast Tiefzieh-Technik for €9mln.

In early trading Friday, RPC shares were down flat at 794.6p.

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