Rpc Share Discussion Threads

[alphabeta4] 02/1/2017 17:10

Tipped again in The Times today on their 2017 list.

[sogoesit] 22/12/2016 13:45

Thanks for that shauney2; interesting.

[shauney2] 19/12/2016 10:02

Tempus
December 16 2016, 12:01am, The Times
Nothing rubbish about this buyout

Martin Waller

RPC is one of those companies, like Bunzl to which it has been compared, that seems capable of finding endless value-creating acquisitions and cost savings. Its name stands for Rigid Plastic Containers and it tends to do large deals, unlike Bunzl, completing four in the past two years.

It is moving away from the sort of packaging required by supermarkets and into more specialist areas, with the proviso that purchases are big users of polymers and offer a return on capital of at least 8 per cent. Management have been making noises about another big deal recently and two duly arrived yesterday.

RPC is buying ESE World, which makes plastic waste containers such as wheelie bins for councils and waste management companies, at two centres in France and Germany. Though the announcement lacks detail, the deal ticks all the boxes.

ESE uses about 4.5 kilotonnes of polymers each year. Though some may be different sorts of plastics than RPC uses, there will be overlap and procurement savings. This was one rationale behind the acquisition in June of British Polythene Industries, which struggled to make headway because of the pricing power of suppliers over smaller customers.

Like BPI, which supplies farmers with films to wrap silage, for example, the acquisition takes RPC further beyond consumer packaging. The return is above 8 per cent and the €262.5 million price represents a multiple that may be a touch higher than RPC has traditionally paid but still seems reasonable.

It also announced yesterday its first move into Southern Africa, the Johannesburg-listed Astrapak for the equivalent of £79 million.

RPC’s half-way figures showed not only further improvement on return on sales but 3 per cent organic sales growth. The company again shifted upwards the expected synergies from earlier deals, a recurring theme. Consensus earnings forecasts were upgraded by about 7 per cent.

The share price graph speaks for itself — selling on 17 times’ earnings, which is about right for a consolidator of this type. The downside is if one of those deals goes wrong — but it hasn’t happened yet. Nothing wrong with taking a bit of profit, but the shares remain a buy.
MY ADVICE Buy
WHY Shares seem fairly rated for a strong business with an excellent record of making acquisitions and then extracting savings from them.

[philanderer] 17/12/2016 23:17

Telegraph

RPC expected to outperform the market with future of plastic looking bright

...RPC closed last week well below analyst target ranges of £12-£13. As its latest acquisitions are expected to complete next year, there is likely to be more revenue and profit growth to come. It could be a good time to buy.

article:

[broadwood] 16/12/2016 08:33

Jefferies International
RPC Group PLC
16/12/2016
Reiterates
Buy
Buy
0
1,180.00
1,220.00
1,051.00
40
2

[jeffian] 15/12/2016 10:57

Yes, another good deal. What happened to the rumours about them bidding for WestRock? I was hoping for another deep-discounted Rights Issue to fill my boots!

[mfhmfh] 15/12/2016 10:37

great acquisition. onwards to 1200p. IMHO.

[shauney2] 15/12/2016 09:22

Another good fit.

RPC acquiring ESE World BV, waste storage solutions E262.5M.

RPC would fund the consideration through its existing debt facilities. The proposed deal represented a strategic opportunity to enter into a high added value polymer consuming segment in a stable and growing European market, with good management and well-established market positions supported by industry recognised branded products. It also represented an excellent fit with RPC's Vision 2020.

Acquisition of a complementary business to RPC's existing materials handling business.

Enhances the Group's overall polymer procurement position.

Provides an enlarged platform to generate cost, purchasing and efficiency savings.

Acquisition expected to be earnings accretive from year 1 with ROCE in excess of WACC, whilst RONOA and return of sales levels are expected to be comfortably ahead of the minimum hurdle levels of 20% and 8% respectively.

[shauney2] 30/11/2016 15:16

Very pleasing results.

A couple of paragraphs caught my eye


" Given the recent growth in dividends paid and increase in number of shares in issue, the Group is evaluating a capital reorganisation to create further distributable reserves to enable the Group to continue its progressive dividend policy. This change in the capital structure will be a focus of work in the second half of the financial year.

Outlook

As we successfully execute our stated Vision 2020 strategy, further attractive opportunities to grow the Group present themselves as the pace of consolidation the industry accelerates. 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'


Good to see they want to continue the progressive dividend policy alongside adding to their growth.

They seem to have a target or targets in there sights.

As jeffian has said i would not mind if they did a discounted rights issue if it was as successful as the previous ones.


A summary from Shares magazine

[mfhmfh] 30/11/2016 13:18

Great results. I should have topped up in the mid 900s.

[affemoose] 30/11/2016 11:41

best performer this year for me

[sogoesit] 30/11/2016 10:00

Great results.
Accumulated today... near term £12 share price target (based on P/E 20 for EPS of about 60p)?
Maybe conservative...

[cheshire pete] 30/11/2016 09:02

ali47fish
The rise in the share price this morning answers your query, as results 'in line' with expectations usually sees the share price fall often due to profit taking. Jeffries target price £11 and Panmure Gordon's target price £11.56 would suggest that they won't be too surprised.
In for the long haul to see the benefits of the 2020 strategy.

[broadwood] 30/11/2016 07:53

- RPC Group has hiked its H1 statutory pretax profit by 79% to £72.5m, from £40.5m. Interim dividend was 6.5p a share, from 4.8p.

It said revenue was £1.23bn, from £800m.

"I am very pleased with the overall business performance in the first half year, leading to record profitability levels with solid underlying organic growth and strong cash conversion," said CEO Pim Vervaat.

"Both the GCS and BPI acquisitions, whose integration is well advanced, have performed well with additional cost synergies identified.

"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.

"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."

KEY DEVELOPMENTS:

- Revenue, profit and cash flow reached record levels driven by the successful implementation of the Vision 2020 growth strategy;

- Revenues grew 53% reflecting the contribution from recent acquisitions and c.3% underlying organic growth;

- Return on sales improved to 11.1% (2015: 10.3%);

- Adjusted operating profit of £136.3m with the adjusted EPS improving by 45% to 30.7p;

- Strong cash generation with free cash flow at £118m (2015: £57m);

- Significant acquisition (BPI) made during the period, with four further acquisitions completed after the half year;

- GCS organisational integration completed and BPI's integration well advanced. Overall acquisition related steady state cost synergy forecast increased from €92m to at least €100m per annum;

- Interim dividend of 6.5p up 35%.

[ali47fish] 30/11/2016 07:30

but we dont know is it in line or exceeds

[nfs] 30/11/2016 07:16

A huge wow£11 by the end of the week?

[from8to800] 30/11/2016 07:10

The word "wow"comes to mind when looking at these results.

[sellingtops] 29/11/2016 13:07

Divergence and Bearish price action on the daily timeframe, with daily value area at around 945.00.
On the hourly the price action is also bearish with price falling just before the 1030 level.

The value area is around the same level.
We are currently just under the 1000 level which could be a key psychological level.

Brokers and institutions look to be bullish on the Co. at the moment with ‘5.2% potential upside indicated by Credit Suisse’ on the 25th November.

Jefferies Group reaffirmed a “buy” rating and set a GBX 1,100 ($13.65) target price on shares of RPC Group PLC in a research report on Monday

Panmure Gordon reaffirmed a “buy” rating and set a GBX 1,156 ($14.34) target price on shares of RPC Group PLC in a research report on Friday

hxxps://uk.tradingview.com/chart/RPC/WP1XKsHv-RPC-ahead-of-half-year-earnings/

[nfs] 25/11/2016 17:11

USA action with Jefferies onboard?

[alphabeta4] 25/11/2016 14:45

Exactly what I was thinking Shauney.

Edit - position doubled :)

[shauney2] 25/11/2016 14:35

What to make of the appointment of Jefferies to act as its joint corporate broker alongside Deutsche Bank.A big acquisition maybe?

Nice breakout ahead of next weeks results.

[cheshire pete] 22/11/2016 12:32

The statement was very reassuring and the market obviously like it. The recent share price weakness may have been due partly to fears that the company may pay too much for future acquisitions and overstretch themselves. I can think of many examples of other companies doing this only to regret it later. Their strategy has worked well to date, so if they stick to it they should continue to prosper. I can remember them being tipped in Questor at about £2.30, some years ago with a few rights issues since as well.