RPC encouraged by profits despite polymer price pressures
The UK-based company said it had posted improved year-on-year revenues for the quarter ending 30 June thanks to increases in both selling prices and sales volumes. It acknowledged that its higher prices were “reflective of the increased polymer price level passed through to customers”. But it added there had been a jump in selling volumes - particularly in the cosmetics and personal care segments which had been hit last year by customer destocking.
Time lag
In an interim management statement, which gave no concrete figures, the firm described its operating profit (before restructuring and impairment charges) as “encouraging”, adding it had benefited from a lower cost base in the wake of its economy drive. This had entered its final phase - with the job cuts at its French plant in Marolles and negations with employee representatives at its Dutch thermoforming operations had been completed
The company said gross margins were under pressure as polymer prices had increased throughout the period and were now at record levels. These price rises would be passed through to the customer, “although with a time lag”, cautioned RPC.
The group said activity levels in new packaging designs appeared to be improving as a further sign that the recovery was taking hold.
“It is encouraging to see that the operating profit level achieved so far is in line with our expectations despite record polymer price levels,” said company CEO Ron Marsh. “Underlying activity levels appear to be improving with customers more active in developing new packaging designs. With a much improved cost base and a robust financial position, the Group is progressively turning its attention to achieving sustainable growth.”
