swiftbird
22 Jun 2017
Share price The last IC recommendation was to buy at 803 pence on 8 June."The 9 analysts offering 12 month price targets for RPC Group PLC have a median target of 1,135, with a high estimate of 1,175 and a low estimate of 1,119.92. The median estimate represents a 54.21% increase from the last price of 736.00."
petethenovice
22 Jun 2017
Re: ? A bit worried so sold out at a loss
oggs
22 Jun 2017
? This is getting out of hand now. The share price can't be described as a correction anymore; this is behaving like a share where the market believes there are very significant underlying problems.
Ripley94
21 Jun 2017
Re: ex rights date Back in today @ 735p.on today's fall back.Not my pick but fancied by O @ C after fall back on results7th June to 760p.Been trying and failing to buy @ that price since .So we will see again how it compares to my own picks.
bamboozled
12 Jun 2017
Re: RPC volatility good to see further director buying today..
Hugh Betcher
10 Jun 2017
Re: RPC volatility I stand corrected. There can't be many shares in sizeable companies which trade 15% above the close with no new information in between.
Ripley94
09 Jun 2017
Re: ex rights date **
sharegardener
09 Jun 2017
Re: JP Morgan Cazenove JefferiesPost recent de-rating, RPC trades at discount to both international plastic packaging rivals: Amcor, Aptar and Berry Global and traditional UK packaging peers: DS Smith, Mondi & Smurfit Kappa, despite offering 3% organic growth, full year contribution of recent M&A and synergies. Believe improved RPC disclosure and guidance on FY18 restructuring costs can catalyse re-rating. RPC trades on FY18 12.8x PE & 8.2x EV/EBITDA, for 8% FY17-20 EPS CAGR: a discount to both international plastic packaging rivals & UK packaging peers. Risks: 1) M&A execution/integration; 2) FX; 3) Polymer prices. With confidence in underlying trading and enhanced RPC disclosure: Reaffirm Buy with £11.50 PT (based on FY18F 10.2x EV/EBITDA), set by reference to global plastic packaging peers Amcor, Aptar, and Berry Global.PanmureIn recent years RPC management has been pushing the business hard, driving industry leading organic growth and a steady stream of acquisitions. FY17 results highlight both the benefits and shortfalls of this policy. Revenues and earnings are materially ahead (up 67% and 77% respectively). Indeed margins better than 33 basis points expected. However, non-recurring items remain high (£131m) and cash conversion remains weak (70% on PG basis). But it must be noted that cash generation is better than expected. Which set of metrics you choose to focus on will determine your view on the stock. Following the Letica acquisition the bears had clearly been winning. Though in recent weeks, a more balanced view had prevailed and the shares had begun to recover. This morning’s results provide something for both the bulls and the bears but overall we believe the shares will move higher.Previous Northern Trust comment:Management countered some of our points raised, especially on raw materials pass-through, which given our very limited data cf. management’s information, we concede management is in a far better place to judge trends than we are on this issue. However our points on falling returns, aggressive FCF definitions (and what seem to be errors), LTIP awards and cash provision leakage were not countered. After further work and comparison with other plastic packagers, there are two areas where RPC seems to stand out – a relatively high capex/sales ratio vs peers and consistent cash provision charges from its acquisitions – this is in addition to clear restructuring costs. These are two areas we believe deserve more scrutiny.Management has confirmed the cash provision charges will continue, with the majority of the balance of provisions on the balance sheet resulting in cash charges in future. Obviously, post the seven additional acquisitions that were closed since the Sep-16 balance sheet was published, we await an updated balance of provisions. With respect to capex/sales (7% average of last 3Y vs peers 3-5%) management explains this is investment in the plant in order to get higher growth. We don’t quite understand this rationale, i.e. a much greater capital intensity for a few percentage points of extra growth vs peers, especially when the growth mostly comes from acquisitions. We wonder if the plant is simply older v peers or if there is some capitalisation of cost occurring.In this regard, it was interesting to note in the rights issue prospectus associated with the acquisition of Letica (and other smaller businesses) there was no history of capex/sales given (usually given for acquisition targets), nor was a figure given when we asked for it. The (adjusted) EBITDA figure of $57M for the Jun-16 year for Letica included a significant amount of “capitalization of certain costs” ($21M, see prospectus for details), which meant the reported EBITDA after other items were taken into account was actually $38M. Two things became immediately apparent to us: given the cost capitalization, capex certainly is an important metric; and the headline EV/EBITDA multiple of 8.5x is actually 12.8x using unadjusted EBITDA.We thin
nk1999
08 Jun 2017
JP Morgan Cazenove "JP Morgan said investors risked overlooking the merits of RPC Group's 'equity story' amid the din of the negative share price reaction to the company's fiscal year 2017 results.RPC has an established trackrecord of extracting "meaningful and sustainable" cost synergies as it consolidates a fragmented packaging market, the investment bank explained."This is a strategy that we believe will continue to generate shareholder value in the years ahead."Changing hands on a price-to-earnings multiple of 10, that opportunity was not being captured in the share price, the broker said."From ADVFN.
nk1999
08 Jun 2017
HL view From Citywire:"Hargreaves: 'yo-yo' RPC drops on cost concerns not dividend growth Concerns have been raised about the integration expenses paid by acquisitive plastics manufacturer RPC Group (RPC) but Hargreaves Lansdown said the dividend made up for it. The company posted full-year results that were ahead of expectation, with operating profit up 77% to £308.2 million and a final dividend of 17.9p, resulting in a full-year dividend of 24p – up 50% on last year. The shares rose 4% in early trading before sharply reversing course to close 61.5p or 7.2% down at 788.5p. Analyst Nicholas Hyett said the group had become a ‘yo-yo to sentiment in recent months’. ‘Following the group’s announcement that it would be acquiring US packing group Letica early this year, concerns emerged that the group’s extensive acquisition programme was concealing poor underlying operating performance, with “exceptional” acquisition costs a regular feature of results,’ he said. ‘The group has tried to address these concerns with increased disclosure in these results but has clearly ailed to satisfy the market.’Hyett said the costs of acquisition ‘should come as no surprise’ and that he preferred to focus on the strong operating performance and the 24th year of consecutive dividend growth. "
The Dutchman
08 Jun 2017
Re: Shares magazine I'm sure that behind the scenes the senior non-exec and or the chairman will be being told by the big institutions to rein back the pace of the acquisitions , and "by the way old boy don't expect us to stump up for another rights issue next January". I recall they have had three rights issues at roughly 12 month intervals.I appreciate that acquisitions are an important element of growing businesses, but the accounting and financial reporting is so open to abuse.At least they aren't involved with long term contract accounting, which is potentially just as bad ( see the recently released FRC report into PwC auditors of failed Connaught).I think that RPC did all the right things by providing masses of information about the acquisitions, exceptional items etc, but of course in a way it just provided more ammunition to the sceptics.
nk1999
08 Jun 2017
Shares magazine "RPC results divide investorsThe market is struggling to make up its mind on results from plastic packaging business RPC (RPC). Initially the stock opened higher before a big slump and at the time of writing it has pared some of its heavier losses to trade down 3.9% to 817p.The volatility in the stock comes despite what look like fairly robust figures for the year to 31 March. A better-than-expected performance at recently acquired businesses helped to lift pre-tax profit by 105% to £155m. The company was also a beneficiary of weaker sterling as it generates 73% of its revenue from overseas. Free cash flow is up 95% to £239m and the dividend is hiked 50% to 24p per share.SHIFT IN SENTIMENTHaving been positive on the stock we changed our view in March amid a shift in sentiment as questions arose over the company’s accounting policies and frequent acquisitions.Looking at this set of numbers there is still a big disparity between adjusted pre-tax profit of £286.1m and the statutory figure of £154.7m.ARE THESE REALLY EXCEPTIONAL ITEMS?Exceptional and other non-underlying items for the year charged against operating profit amounted to £116.2m (2016: £79.1m) which included costs relating to bringing new businesses into the group of £84.2m (2016: £68.2m).We explored the issue of exceptional items and several other potential red flags at RPC in a recent article.The company goes into some detail on the nature of its exceptional items, which at least allows investors the opportunity to take their own view on whether they are genuinely ‘exceptional’.In our view the fact they recur so frequently implies the statutory number offers a better picture of the company’s performance.Valued on its adjusted earnings per share (EPS) of 62.2p the stock looks fairly cheap relative to its growth rate, trading on a price to earnings (PE) ratio of 13.3 times.But using the statutory EPS of 37.1p the shares trade on a trailing PE of 22 times. Little wonder the market is split on RPC."
MJS1234
08 Jun 2017
Re: RPC trade Well done!Know it went up initially and then fell back.I'm holding for my sinsGLTAMJS
Bobtheretiredbroker
08 Jun 2017
RPC trade Sold @ 861.83 at 0828 am on Tuesday according to my contract note.Maybe you should get up earlier, HB!
evenlongershot
08 Jun 2017
Re: RPC group Agree, I'm in as of yesterday. A nice entry point (I hope) with a divi to come and no signs of the hunger for packaging diminishing anytime soon. Could RPC even be a takeover target from one of the big international players?
