RPC Group shares fall despite significantly beating forecasts

Plastics specialist RPC Group said on Thursday that its full-year revenue and profit is expected to be “significantly ahead” of last year when published on 7 June, after acquisitions and organic growth boosted the top-line. 

The Group said the acquisitions of GCS and BPI had integrated well and were performing ahead of expectations, which was boosting the results. As a result, adjusted operating profit for the year is expected to beat management expectations.

The firm confirmed the acquisition of ESE, which is reportedly going to make a contribution to the 2016/17 results after early purchasing synergies were realised.

It also confirmed the acquisition of Letica Group, which it paid $490m for. The firm had a 2016 EBITDA of $67m, meaning the deal valued Letica on a 7.3x EBITDA multiple. 

The group has good cash flow after the rights issue announced on 9 February was received, and it has "significant headroom" under its debt facilities.

CEO Pim Vervaat said the results showed the successful integration of the acquired business, adding that the Board would continue implementing its vision 2020, focusing on growth:

"...the Vision 2020 focused growth strategy, in which leading design and engineering capabilities create value in chosen market segments. At the same time the Group is looking to grow selectively in a consolidating industry whilst further enhancing its strategic buying position."

Despite the news, shares in RPC fell 3% shortly after 9 am on Thursday.