Update on RPC and Wolseley
City Index June 4, 2014 10:04 PM
<p>Shares of plastic packaging manufacturer, RPC, are up around 4% (at time of writing) on the back of its latest market update. For its year […]</p>
Shares of plastic packaging manufacturer, RPC, are up around 4% (at time of writing) on the back of its latest market update.
For its year ended 31st March, the company took revenue of around £1bn, marking a 7% increase over the same period last year.
The decent performance was partly thanks to increased demand for its packaging for personal care, pharmaceutical, food and beverage products.
Meanwhile, that, in addition to cost control measures, saw RPC post net profit for the period of some £44m, representing a healthy 28.5% increase over the prior year.
RPC’s acquisitive strategy also helped…
According to the company, recent acquisitions accounted for 3% of its growth – and the company isn’t about to stop there.
Indeed, RPC is on something of an expansion mission: it announced its growth plans (dubbed “vision 2020”) last November, following challenges that saw the company issue a profit warning last March partly on the back of rising costs.
RPC’s vision 2020 includes expanding in Europe via acquisitions, together with creating a meaningful presence outside of Europe. Since then it has embarked on a few deals, most recently was the company’s swoop on China’s Ace Corporation earlier this month for around £250m.
Of course, RPC’s shares have been on the rise, with the company’s shares having soared around 58% over the last year. Still, RPC looks to be positioning well to create further value.
Shares of Wolseley inched up yesterday (3rd June)…
That followed the release of its third-quarter trading update, which showed that the plumbing and heating products supplier performed relatively well despite a hit from adverse currency movements.
According to the company, adverse currency movements shaved £200m off its revenue and £12m off its trading profit.
That notwithstanding, for the quarter ended 30th April, it reported revenue in on-going businesses of around £3.1bn, up some 5% on a like-for-like basis – though down 0.8% overall.
Trading profit from the company’s on-going businesses came in at £155m, marking a 0.6% increase – at constant exchange rates the increase was around 9%.
All of that was thanks to decent growth in the US and the Nordics – sales were up 9% and 7.5% respectively on a like-for-like basis – which helped offset challenging conditions elsewhere.
For the next six months, Wolseley expects group like-for-like sales growth rate of around 4%.
All of that helped Wolseley’s shares close up 1.6% yesterday – they’re still off around 5% from this year’s peak in April.
Certainly, the company’s positive outlook, as well as the notably improving performance in the US – which represents the bulk of its business – provides reason for upbeat sentiment.
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