This share buy back is doing nothing, nothing at all for the share price which falls on an almost daily basis.The recent purchase hasn't helped either. It's made three attempts to climb and hold above the .236 = 820Will the next move up do it ?
RPC Acquisition of Nordfolien GmBH Not a huge acquisition (75 m) compared to previous deals, SP down very slightly on a down day suggests market is not concerned.Interesting that it is in Europe which RPC already have 75% of business and is lower growth than other regions (eg Asia) but Polish plant gives access to higher growth Eastern Europe and integration with bpi gives savings. Important in current climate that they have in-house recycling facilities.7x EBITDA pre-synergy, RPC well experienced in finding synergy benefits. Expect earnings enhancing in first year.The SP has been on the up for last couple of weeks after a long decline, it could use some encouragement.H2
Today's drop FTSE 250 up over 450 points, a director splashes out £80k on shares and the share price falls. Strange.
HL view "Plastic packaging manufacturer RPC has been under pressure to prove its long-running acquisition programme is creating value for shareholders, and not masking a lacklustre operating performance. Management have put a hold on acquisitions while it deals with those concerns. So far, we think the results are good. Organic growth is healthy and exceptional integration costs, the focus of much of the investor discontent, are falling. As a result cash generation catching up with headline profits. From an operations perspective the company looks healthy, and the group looks set to maintain its 25-year track record of dividend growth. But RPC is facing new pressures. This time from of regulation. Following the airing of popular TV show 'Blue Planet', the UK government has faced calls to tighten up rules on plastic waste. The EU has followed suit, and is already looking at tightening controls. RPC argues that it's well placed to weather the political turbulence, and could even benefit. The group is Europe's leading recycler of polyethylene film and the majority of its products are recyclable. Its focus on innovation should mean it can respond quickly to demand for more easily recyclable products. Innovation centres are reportedly actively researching bio-based polymers and compostable materials that break down completely when treated correctly at the end of their life. We tend to agree that RPC's scale and focus on innovation are significant advantages. However, it's unlikely the group would escape a crackdown on plastic completely unscathed. Nonetheless we remain upbeat about RPC's prospects. Plastics remain a key weapon in fighting that other environmental bogie man, carbon emissions, and RPC is well placed to benefit from the consolidation the sector as well as increased demand. The shares currently offer a prospective yield of 3.4%, and trade on 11.3 times expected earnings, slightly above their longer-term average."
Re: Trading Statement No - no idea apart from people shorting it.I waited till I thought it had turned for the day and topped up. I got just over 803. That makes it a major holding for me now.
Re: Trading Statement "Hard to see what the market doesn't like in today's update to give near 5% drop. "Yep I must agree 7% down as I write nothing in the statement as far as I can see? Anyone have any ideas (apart from the obvious turtle woes etc.)?Cheers
Re: Trading Statement Completely agree, H2, I read the statement, and everything seemed positive; and given that the price has been weak of late due to fears about Plastic legislation, I expected a good rise this morning.
Trading Statement Hard to see what the market doesn't like in today's update to give near 5% drop. Unusually, RPC will see a $10m positive impact this year due to tax change (most Co's are showing negative impact in Y1, positive thereafter)Other guidance all seems pretty positive. RPC's strength in recycling/bio-degradeables should mitigate Govt action.H2 Revenue for quarter ended 31 Dec 17 was £898m, 31% growth versus Q3 16benefitted from acquisitions, polymer price tailwinds and organic growth of over 4%.Year to date organic growth rate was 2.6%.Profitability in line with management expectations and grew significantly versus the prior year, aided by organic growth and the further realisation of synergies which offset an adverse polymer time lag impact. Cash generation in line with management expectations and the Group maintains a robust financial position.For the year to 31 March 2018 it is currently expected that the US reforms will have a small positive impact on the Group's adjusted effective tax rate, with a one-off non-cash tax credit of c.£10m resulting from the revaluation of US related deferred tax assets and liabilities.For the year to 31 March 2019 it is currently expected that the changes will reduce the Group's adjusted effective tax rate by approximately 1%, based on the existing mix of profits.
Re: in for less but into win But maybe a time to buy @ 770p rather than sell ? Depends how long you can tie your money up. Long-Term, Plastics won't be disappearing as long as they are biodegradeable and recyclable, etc... Consumers aren't on any mass scale going to start keeping every plastic container that might be useful for holding things in, like in the old days, so a lot of this political talk is to get all to be more responsible about manufacture and disposal (into recyclable areas rather than into the sea). RPC are very advanced on responsible treatment of plastics. But as always this is just my opinion and do your own research !
Re: in for less but into win "770 will probably mark the bottom --- WHY -well just 'cos I sold some at that price today!"You could be right, this usually happens to me.
Re: in for less but into win 770 will probably mark the bottom --- WHY -well just 'cos I sold some at that price today!
Re: in for less but into win I feel rather lucky. A week before Xmas I bailed at 871p, taking a decent profit (18% IRR) and forgot about RPC. I take a quick look today and they're 770p. With volatility i.e. risk like that, I'm glad to be out. Weird.
Downgrade Clued-in"Berenberg still has a 920p price target (15% above current price) even though they cut today their target from 1120p !"Interestingly 4-Traders indicate targets from 9 brokers, ranging from 1120p to 1250p mean 1182, so it looks like Berenberg were already the low-ballers and have now dropped further to 920p. RPC SP has been drifting further below mean target since early last year.[link] tend to pay more attention to EPS forecasts than SP targets, I see that the 2017 forecast was raised from 52p to 55p in December (2018 number also raised). On current EPS forecasts, RPC looks significantly undervalued, but of course the current anti plastics campaign could lead to some changes by Govts, customers and/or public which impact the forward business and cut future growth rates. It would seem any regs etc would take some time to implement, but even the threat is impacting SP.The current price now looks to be at the long term support, a further drop would be ominous!H2
Berenberg still has a 920p price target (15% above current price) even though they cut today their target from 1120p !! Plastics of RPC standards will still be needed in very large quantities. We're not going back to the glass milk bottle !!
Re: No idea I heard it on the radio, so it must be true...Jeremy Vine had the head of UK recycling association or somesuch on the other day.I think it's that it's difficult to recycle because it is either too small to be sorted by the machines and is low quality - I gather there's a lot more to plastic than the man in the street might think.I agree that local use of things like food containers is likely to be locally produced, but it's all the small nicknacks and excess packaging on everything made in China - toys, gadgets, household goods, tools etc etc that comes from China. They supply the world with this sort of stuff, we just buy our chicken pieces etc in supermarket packaging rather than loose from the butcher. (I know that's a generalisation.)We should all use less packaging - except that made by RPC obviously.Amcor, a Swiss-based Australian (and Aus listed) rigid plastics manufacturer, doesn't seem to have anything much over RPC but the share price hasn't taken a pasting, so perhaps it's just UK stocks being beaten up over the issue. SMDS (recycled paper packaging) is slightly down in the dumps, but not as much as RPC.