Rpc Share Discussion Threads

[midherts] 27/6/2018 15:14

Holdings RNS's can be boring but that is not the case with the two yesterday.Sizable activity by two large US institutions

Note also the rise today at the start of US trading today.


Disclosure - I hold RPC

[useless23] 26/6/2018 12:15

Bought in here yesterday. Looking good already.

[hatfullofsky] 19/6/2018 15:35

Guess more "War on Plastic", 4.5% down today.

[hatfullofsky] 18/6/2018 15:58

Very strange, not great volumes either

[dr_smith] 18/6/2018 13:35

General markets down re trade war concerns.

[hatfullofsky] 18/6/2018 13:21

Very strange, not great volumes either

[eentweedrie] 18/6/2018 13:19

7.14 to 6.92 in under an hour

[bouleversee] 15/6/2018 11:37

Multiple acquisitions doesn't seem to have impeded the phenomenal growth of VCP and they haven't paid any dividend at all since the new management did a special which was more than my purchase price which was only around £3k so my £65k+ is all profit in just a few years. I would love to know why they rocket and RPC falls. It's hard to believe that one PE shorter could influence the market to that extent when so many of us can only see a good story and he presumably understands the type of product they produce and their concern for the environment just as we do. We can't live without plastic and I doubt if their business will be much affected by the current anti-plastic mania.

[dr_smith] 15/6/2018 10:40

LOL :-)
I am retired too and use SIPP, ISA and dealing account, the last I use for drawings/income, typically sourced by holding some funds back when doing the occasional sell/buy.
I have been in/out of rpc since 2013 (currently in, but last buy was £7.97).

My only knowledge of the business is from their reports, so don't have the same affinity with it, than say housing where I am more in tune with the many influences.

I quite understand your view from other shares I have as a LTH, when share price far exceeds buy price, I tend to take a more relaxed view to let it ride.

[jeffian] 15/6/2018 10:06

Good morning, Dr. Dave.
;-)

Well I've always liked dividends but particularly so since I've retired and live off them! I suppose it depends where you are in life.

Regarding the true benefits of acquisitions only becoming apparent after a couple of years (the area on which Northern Trust attacked RPC) it may well be "a test of faith" but in my case that faith is assisted by the knowledge that RPC has a record of unbroken dividend growth and almost unbroken eps growth over the 25 years since it floated in 1993 and if it was disguising true profits by hiding behind 'exceptional' acquisition expenditure, I think it would have shown up by now.

[dr_smith] 15/6/2018 09:36

Quite true Jeffian, with a few variances in my view.
Not too fussed about divs, by which I mean I agree on share price growth and if that is easier achived by taking div money and putting that into business opportunities/acquisitions, then if that's the optimal strategy, then do it.
Aquisistions are always hoped to be earners, complimentery, and generate cross sales and Admin savings etc but you never know until 1-2 years later how beneficial they truely are, so perhaps more a test of faith.

Dave (middle name Russell not a Doc :-) ).

[jeffian] 14/6/2018 23:32

I'll be honest with you, Dr, I don't give a stuff about how companies achieve growth as long as they generate growing revenues, profit and cashflow and reward shareholders with a growing dividend. The result of that is that the share price will grow over time. RPC is not the only company to grow by acquisition - several of my more successful investments e.g Diploma (DPLM) and RWS follow a similar strategy - and but for the shenanigans of Northern Trust (who have a vested interest via their short position) I do not believe we would be where we are. All the RPC board can do is to go on delivering growing profits and dividends and the share price will take care of itself over the long term.

[dr_smith] 14/6/2018 17:17

Cheers Jeffian. Noted.
Market has guarded view of the aquisitions as hard to compare like for like progress.
I am not aware of what share restructuring may have taken place over past years (e.g. to raise capital for purchases, but also diluting future returns for LTH)..but note on p37 the basic EPS adjusted (I am guessing reflects such re-structuring) shows an increase from 28.4p 2012/3 to 72p 2017/8 commensurate with the 21-34% you recite.
Edit note.. actually cagr for eps will be approx 20%.

[jeffian] 14/6/2018 16:53

DR_SMITH,

My point was in response to those who have cited the comment "improve the adjusted operating profit of the core businesses, including the contribution from the recent Nordfolien acquisition, by at least £50m by the financial year ending March 2021" as a reason for the poor response to the results on the grounds that it doesn't show a great growth rate. But for many years RPC's low organic growth has been supplemented by acquisitions to produce much higher overall actual growth rates of both revenue and profit. Look at this presentation on the last results and particularly page 37; over the past 5 years annual growth rates of all KPI's has been growing at 21-34%



Only ROCE is down, as commented by someone above.

I expect this pattern to continue, so I am expecting overall operating profit to be considerably greater than £50m higher by 2021.

[dr_smith] 14/6/2018 14:29

Jeffian.
I assume the "growth" is referncing increased turnover and not adjusted for inflation.
In 2017 UK inflation was 2.56%, so more or less you could sale flat sales in real terms. I would expect any business to target organic sales growth of 10% plus, though this is a spurious figure from my head. I am a LTH expecting more.

[bouleversee] 14/6/2018 10:43

hxxps://www.rpc-group.com/media/product-news/2018/site-enhancements-underline-rpcs-sustainability-commitment

I still think they are undervalued.

[jeffian] 14/6/2018 00:06

18BT,

See my previous comments (#1852). RPC has for years grown from an amalgam of modest organic growth ("Organic revenue growth was 2.8% in the year and included growth of over 4% in the second half. The annual average organic revenue growth since the launch of Vision 2020 is 2.9%, well ahead of comparable weighted GDP growth of 1.9%.") supplemented by acquisitions ("We target through the cycle underlying organic growth ahead of GDP and to improve the adjusted operating profit of the core businesses, including the contribution from the recent Nordfolien acquisition, by at least £50m by the financial year ending March 2021. At the same time, within the overall capital allocation framework, the Group will continue to assess value-adding acquisition opportunities which meet our strict acquisition criteria"). The forecasts only relate to the current core businesses but I doubt the company will look the same in 2021.

[18bt] 13/6/2018 17:34

Finally trawling through the slide presentation. Looks a fairly convincing story on cashflows. Yes the conversion of cashflow (net of CAPEX) to Adj Op Profit is down, but the biggest element is "Growth capex". However there are a lot of adjustments before you get to these which is hard to unpick. What I can't get my mind around is the unambitious looking £50m of EBIT improvement by 3/2021. That's only 12%, i.e. 3.9% compound. The debt profile looks good and they could use c£100m of disposals in share buybacks which would be EPS accretive and worth doing now that the shares yield 4.4%, but from having been highly ambitious, it now looks lame unless they do indeed make some further acquisitions. Tempted to top up at these levels, but need to reflect.

[fez77] 11/6/2018 09:31

I think we're preaching to the converted here. We know the truth of the matter but try telling Lucy on the One Show!

[nocton] 11/6/2018 08:51

"... many of the most toxic and damaging plastics face extinction."
Very unlikely. It is plastic 'waste' not plastic that is the problem. Remember that most clothing fibres are 'plastic', i.e. synthetic polymers. A cotton bag to replace a plastic or synthetic fibre bag is much more environmentally damaging in terms of pollution, fertiliser/oil use and CO2 output. There is a danger of repeating the diesel saga - focus n just one aspect to the detriment of other aspects of pollution. Our regional BBC news had the story of a woman who regularly made a 30min drive to buy milk in glass bottles - and she thought she was being environmentally responsible!

[dr_smith] 10/6/2018 17:50

I don't know what goes on over pond - and why they would be more in tune to the subtleties of plastic types..but then article is referencing competetitors, not the investors.
Given that ft is a respected source, the rumour mill may respond and up the price tomorrow..maybe back to norm or higher...says me the optimist.

[oli12] 10/6/2018 14:58

The hunter could become the hunted. A larger rival or private equity could come in for this one. If you look at the price Advent paid for Færch Plast last year then RPC is undervalued. I can understand why the share price has dropped however fundamentally this is a good long term bet, plastics are not going to disappear over night.

[fez77] 10/6/2018 13:35

Let's hope it doesn't fall prey to a bid before the share price recovers!

[jeffian] 10/6/2018 12:05

This comment in the Sunday Telegraph today -

"Casualty of anti-plastic backlash

It doesn’t take a genius to work out that plastics manufacturing isn’t the best line of work to be in right now. Thanks to the groundbreaking work of BBC series Blue Planet, many of the most toxic and damaging plastics face extinction.

Still, you’ve got to feel sorry for RPC, the FTSE 250 packaging supplier. After an impressive ride, its shares crashed 12pc last week over fears it would fall foul of government and EU pledges to stamp out single-use plastic products.

Analysts have pointed out that RPC does not make any of the items covered by a ban, but that hasn’t calmed investor nerves. Yet City sources say big US rivals are fully aware of the distinction and have already begun circling. RPC has been a huge British success story. Let’s hope it survives an unfortunate blip."

[fez77] 08/6/2018 10:01

and Plaxit takes our minds off Brexit