RNS Number:7875S
RPC Group PLC
03 December 2003
3rd December 2003
PRESS RELEASE
RPC GROUP PLC
Interim results for the 6 months ended 30th September 2003
RPC Group Plc ("RPC" or "the Group"), Europe's leading supplier of rigid
plastics packaging, today announces its interim results for the six months ended
30th September 2003 with record turnover, profits and earnings per share.
Financial highlights:
* Group turnover increased by 8.5% to #218m (2002: #201m)
* Group operating profit up 6.9% to #14.0m (2002: #13.1m)
* Group pre-tax profit up 13.3% to #11.4m (2002: #10.0m)
* Earnings per share of 9.1p up 12.3% (2002: 8.1p)
* Gearing 93% despite an increase in borrowings (2002: 102%)
* Interim dividend of 2.15p (2002: 2.05p) per share up 4.9%
Commenting on the results, Peter Williams, Chairman said:
"It is once again pleasing to report record turnover, profits and earnings for a
first half. In the UK, turnover grew by 6.9% on volume growth of 3.9% which, in
view of the general state of the manufacturing industry here, indicated good
progress both in the underlying operations and with the new projects.
"Demand on Mainland Europe was initially strong but, as the half-year
progressed, it softened in the face of recessionary conditions. As a result
volumes increased by 1.7%, whilst turnover in local currency rose by just 0.3%
although when translated into sterling shows an increase of 9.2%. The resilience
of our business is in large part due to our success in bringing new products to
the market.
"The current trading environment is challenging, especially in the euro-zone,
but the Board anticipates that the Group will deliver progress for the year as a
whole."
- Ends -
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For further information:
RPC Group Plc 01933 410 064
Ron Marsh, Chief Executive
Chris Sworn, Finance Director
Merlin Financial 020 7606 1244
Tim Blythe 07816 924 626
Vanessa Maydon 07802 961 902
Tom Randell 07775 875 847
Attached: Interim Statement
Group Profit & Loss Account
Group Balance Sheet
Group Cashflow
Notes to the Accounts
RPC Group Plc Interim Statement
It is once again pleasing to be able to report record turnover, profits and
earnings for a first half. Turnover was up by 8.5%, volume, as measured in sales
tonnes, increased by 2.4%, operating profit by 6.9% and earnings per share by
12.3%.
In the UK turnover grew by 6.9% on volume growth of 3.9% which, in view of the
general state of the manufacturing industry here, indicated good progress both
in the underlying operations and with the new projects. Undoubtedly, the more
competitive euro-sterling exchange rate contributed to the improvement, but we
also launched new products and, at the same time, enjoyed a consistently high
demand for the margarine tubs that we began to produce at our Old Dalby facility
two years ago.
Demand on Mainland Europe was initially strong but, as the half year progressed,
it softened in the face of the recessionary conditions. As a result volumes
increased by 1.7%, whilst turnover in local currency rose by just 0.3% although
when translated into sterling it shows an increase of 9.2%. The resilience of
our business is in large part due to our success in bringing new products to the
market: in particular, our largest customer successfully re-launched the
market-leading German margarine brand in our tubs at the turn of the half year
utilising the new capacity at our Celle plant from August onwards. The core
operations in thermoformed packs and vending/drinking cups experienced strong
competition and suppressed demand as both consumers and industry cut their
spending.
Raw material prices were highly volatile in the half year; having peaked in
April, they fell for the next three months, and then once again rose during the
summer but were showing renewed signs of weakness as the period ended. This
degree of instability is unusual but we managed the impact on our business with
some success.
Finances
Borrowings increased by #12 million over the period. Creditors declined
substantially, partly because of a reduction in capital expenditure creditors of
#4 million, and partly because we took advantage of the wider availability of
beneficial prompt payment discounts with suppliers, which amounted to a further
#5 million. Even with the increase in our borrowings we remain comfortable with
the level of our gearing which stands at 93% (88% at 31 March 2003) despite the
level of capital spend in the period.
By September 2003 we had increased the proportion of our borrowings denominated
in euros to approximately two thirds in order to benefit from the lower interest
rates and to more closely reflect the split of our assets. Therefore, although
the average borrowings in the first half of this year were higher than those in
the same period last year, the interest charge fell by over #0.25 million
because of this switch and also because of the lower interest rates prevailing
in the market. The non-trading items shown in the profit and loss account, (the
profit on the sale of land and the loss on terminations) relate, respectively,
to the sale of surplus land at our Oakham factory, and the anticipated remaining
costs of disposing of our Oevel site together with those of terminating the
production of caps and closures at Celle.
The total capital expenditure for this half year was #8 million higher than in
the first half of last year. This year our capital spend is skewed towards the
first half but for the year as a whole we would expect the total to be broadly
similar to last year.
Operations
* The Bramlage-Wiko cluster benefited from the successful launch by our
customer Boehringer Ingelheim of their Spiriva (R) drug for Chronic Obstructive
Pulmonary Disease. This drug is delivered by the Handihaler (R) which is
produced at our Formatec facility in Mellrichstadt. Our output of Handihalers
(R) has nearly doubled between the first half of last year and the first half of
this year and is now manufactured in a newly constructed clean-room. Celle's
performance has also improved as margarine tub volumes have risen, and in order
to focus the operation on a clearly defined market sector, the decision has been
taken to exit from the site's cap and closure business; this has necessitated
the redundancy of a number of staff. A further, very substantial project has
been won at Bramlage and the equipment has been installed but the start-up has
been deferred by the customer so that there will be no financial return in the
current year. The rest of the cluster has suffered from depressed demand in the
latter part of the period under review but nevertheless offers very good
prospects for future growth.
* Against a generally difficult trading environment, particularly on the
Mainland, our Bebo Thermoforming cluster also benefited, at the end of the
period, from the start up in Germany of the final stage of the major margarine
tub project. Meanwhile, the UK and Polish operations have made significant
progress, whilst the Dutch factories have developed new business to reduce the
dependence on the fluctuating demand for long-life fruit packaging of their
major customer.
* The Injection Moulding cluster in the UK has taken full advantage of
the new competitiveness of sterling to restore its growth rates to levels not
seen in recent years. A number of new projects have been won - some , for
example, wide-mouth PET jars and vitamin packs, have launched fairly recently
whilst others commence in the coming weeks and months. Further growth is
confidently expected.
* Our Tedeco-Gizeh disposables business has been operating in an
environment of depressed demand. Nonetheless, we have begun to benefit from the
consolidation of our production operations into a new facility at Deventer and
we expect to see a further performance improvement in the second half.
* Some significant contracts have been won by our Blow Moulding cluster
and these assure us of continued expansion in the future whilst, in the first
half, we achieved modest growth despite the difficult trading environment.
* Our major investment programme at Cobelplast-Montonate, the
installation of a new PET line, came on stream towards the end of the first half
and we are now building our sales in this expanding market. Meanwhile,
Cobelplast-Lokeren has had some success in gaining new contracts in Europe but
is finding the prospects for the development of its world-wide sales limited by
the strength of the euro.
Dividend
The Board has declared an interim dividend of 2.15p (2002: 2.05p) per share,
representing an increase of 4.9%. This will be paid on 23 January 2004 to
ordinary shareholders on the register on 30 December 2003.
Prospects
The current trading environment is challenging, especially in the euro-zone, but
the Board anticipates that the Group will deliver progress for the year as a
whole.
J Peter Williams - Chairman
Ron Marsh - Chief Executive
3 December 2003
RPC Group plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover 218,000 200,997 407,060
Operating costs (204,029) (187,926) (379,325)
----------- ----------- ---------
Operating profit 13,971 13,071 27,735
Profit on sale of land 1,912 - -
Loss on terminations (1,760) - -
Net interest payable (2,762) (3,043) (6,190)
----------- ----------- ---------
Profit on ordinary activities
before taxation 11,361 10,028 21,545
Tax on profit on ordinary
activities (3,408) (3,009) (6,463)
----------- ----------- ---------
Profit on ordinary activities
after taxation 7,953 7,019 15,082
Dividends (1,883) (1,788) (5,498)
----------- ----------- ---------
Retained profit 6,070 5,231 9,584
=========== =========== =========
Basic earnings per ordinary share 9.1p 8.1p 17.3p
Diluted earnings per ordinary share 9.0p 8.0p 17.2p
RPC Group plc
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Profit for the period 7,953 7,019 15,082
Currency translation differences on
foreign currency net investments 1,274 2,167 11,541
Tax on realised and unrealised
foreign exchange differences - - 1,179
-------- -------- --------
Total gains and losses recognised
since last annual report 9,227 9,186 27,802
-------- -------- --------
All turnover and operating profit are derived from continuing activities.
RPC Group plc
CONSOLIDATED BALANCE SHEET
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Intangible assets 8,244 7,987 8,380
Tangible assets 191,293 168,867 187,781
--------- --------- ---------
199,537 176,854 196,161
--------- --------- ---------
Current assets
Stocks 63,828 56,996 62,568
Debtors 82,912 74,788 80,951
Cash at bank - 1,983 -
Creditors: amounts falling due within one year
Bank loans and overdrafts (9,933) - (1,015)
Obligations under finance leases (580) (1,072) (1,172)
Other creditors (96,309) (96,007) (109,532)
--------- --------- ---------
Net current assets 39,918 36,688 31,800
--------- --------- ---------
Total assets less current liabilities 239,455 213,542 227,961
Creditors: amounts falling due after
more than one year
Bank loans (98,816) (97,854) (95,526)
Obligations under finance leases - (528) -
Tax on unrealised foreign exchange gain - (600) -
Provisions for liabilities and charges (22,449) (18,820) (21,762)
---------- ---------- ---------
Net assets 118,190 95,740 110,673
========== ========== =========
Share capital and reserves 118,190 95,740 110,673
========== ========== =========
Aggregate borrowings 109,329 97,471 97,713
Gearing 93% 102% 88%
RPC Group plc
CONSOLIDATED CASH FLOW
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Reconciliation of operating profit
to net cash inflow from operating
activities
Operating profit 13,971 13,071 27,735
Profit on sale of land 1,912 - -
Depreciation 13,783 12,525 24,290
Goodwill amortisation 239 220 446
Profit on sale of tangible
fixed assets (67) (25) (564)
Movement in working capital (12,935) (5,095) (6,712)
Movement in provisions for
liabilities and charges (313) (650) (378)
----------- ----------- ---------
Net cash inflow from operating
activities 16,590 20,046 44,817
----------- ----------- ---------
Consolidated cash flow statement
Net cash inflow from
operating activities 16,590 20,046 44,817
Returns on investments and
servicing of finance (2,443) (2,614) (5,832)
Taxation (1,418) (1,714) (3,845)
Capital expenditure and
financial investment (20,544) (12,391) (29,271)
Equity dividends paid (3,712) (3,531) (5,320)
----------- ----------- ---------
Cash (outflow)/inflow before financing (11,527) (204) 549
Financing 2,468 3,003 (2,713)
----------- ----------- ---------
Movement in cash in the period (9,059) 2,799 (2,164)
=========== =========== =========
RPC Group plc
NOTES TO THE ACCOUNTS
1. Basis of Preparation
The interim results for the half year ended 30 September 2003, which are
unaudited, have been prepared in accordance with the accounting policies stated
in the accounts for the year ended 31 March 2003.
The financial information for the year ended 31 March 2003 has been extracted
from the published accounts which received an unqualified audit report and have
been delivered to the Registrar of Companies.
2. Segmental Analysis
The geographical analyses by origin of turnover and operating profit are as
follows:-
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Turnover
United Kingdom 70,714 66,133 135,023
Mainland Europe 147,286 134,864 272,037
------------- ------------ -----------
218,000 200,997 407,060
============= ============ ===========
Operating Profit
United Kingdom 4,212 3,561 9,425
Mainland Europe 9,759 9,510 18,310
------------- ------------ -----------
13,971 13,071 27,735
============= ============ ===========
3. Operating Profit
The operating profit is stated after charging #13,783,000 depreciation and
#239,000 goodwill.
4. Earnings per Share
Basic
The earnings per share figures have been computed on the basis of the weighted
average number of shares in issue during the period (half year ended 30
September 2003: 87,312,631; half year ended 30 September 2002: 87,189,551 and
year ended 31 March 2003: 87,225,662).
Diluted
Diluted earnings per share is the earnings per share after allowing for the
dilutive effect of the conversion into ordinary shares of the weighted average
number of options outstanding during the period. The number of shares used for
the fully diluted calculation for the period was: the half year ended 30
September 2003: 88,276,841, the half year ended 30 September 2002: 87,467,442
and the year ended 31 March 2003: 87,727,391.
5. Analysis of Net Debt
At
At 1 April Cash Non Cash Exchange 30 September
2003 flow changes movement 2003
#'000 #'000 #'000 #'000 #'000
Cash at bank/(overdrafts) (590) (9,059) - 96 (9,553)
Bank loans less than
1 year (425) 50 - (5) (380)
Bank loans greater than
1 year (95,526) (2,956) (81) (253) (98,816)
Finance leases (1,172) 607 - (15) (580)
--------- -------- -------- -------- -----------
Total (97,713) (11,358) (81) (177) (109,329)
========= ======== ======== ======== ===========
Copies of the interim report will be mailed to shareholders on 3 December 2003
and are also available from the Secretary, RPC Group Plc, Lakeside House, Higham
Ferrers, Northants NN10 8RP.
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