Packaging News

Rigid plastic packaging firm RPC Group has predicted that its full-year operating profit and revenue will drop, due to high polymer prices and adverse foreign exchange movements

The firm said that polymer prices rose to near record levels by the end of September, but reduced gradually towards the end of 2012 before rising again in the fourth quarter.

Revenue for the financial year 2012/13 is expected to be lower than the previous year, largely as a “consequence of the strength of sterling versus the euro, in which a significant part of the Group’s turnover is recorded,” the company said.

The currency conversion was estimated to have a negative impact on the operating profit of about £4m.

In its pre-closing trading statement, said: “The operating profit (before exceptional items) as reported in sterling for the twelve months to 31 March 2013 is therefore anticipated to be slightly below last year.

“When measured on a constant currency basis, the overall performance is anticipated to be similar to last year as the material adverse polymer time lag variance has been compensated by cost reduction measures (including Superfos synergies) and an enhanced sales mix.”

RPC said its financial position remains robust with satisfactory cash flow development in the fourth quarter and significant headroom under the Group’s debt facilities.

‘End of an era’

Elsewhere, RPC appointed Simon Kesterton, a member of the Chartered Institute of Management Accountants, as its new finance director replacing Pim Vervaat who is to step up to the chief executive position in May.

As previously announced, Vervaat is to replace Ron Marsh, who notified the group of his intention to quit in October. Chairman Jamie Pike said that the changes mark “the end of an era” after Marsh led the company for 24 years.

Pike said: “The board has concurred with Ron Marsh that the opportunity to appoint Simon Kesterton into the group finance director role permits the seamless transition of the executive directorate at this time.

“Ron has successfully led the company for 24 years growing RPC into a FTSE 250 business with a turnover exceeding £1 billion.

“Ron’s forthcoming retirement at the AGM in July will be a suitable occasion for the board to express its full thanks to Ron for his outstanding contribution to the success of RPC. The forthcoming promotion of Pim Vervaat into the role of chief executive marks the end of an era. The board wishes Pim every success in taking the company forward and has full confidence in his ability to do so.”

Europe

Elsewhere, Pike said: “The continuing lack of growth in Europe, which is expected to continue in 2013/14, has had an impact on the level of profitability. The overall performance in these challenging trading conditions remains however robust and the Group is well placed to benefit from economic recovery from a position of sound financial strength. The Board remains confident in RPC’s prospects.”