RPC Group’s shares fell slightly this morning as the company admitted weak Christmas trading had impacted revenues.
The firm, one of Europe’s biggest plastic packaging makers, said Brexit stockpiling had also hit cash flow in the period as it looks to alleviate disruption from the UK’s exit from the EU.
RPC, which is currently at the centre of a tug-of-war between two prospective buyers and its shareholders who have thus far been disgruntled by the offers made, said revenues were £894m, 0.4 per cent down year-on-year.
Revenue was hampered by “sales growth moderating towards the end of the quarter due to weak trading around the Christmas period”, the firm said, but organic growth for the first three quarters ending 31 December was 2.6 per cent, leaving it in a “robust financial position”.
It gave no figure for operating profit, but only said it was “similar” to last year.
“The Group is finalising preparations to mitigate any disruption resulting from the UK's exit from the European Union. As a consequence manufacturing sites are building buffer stocks which has resulted in a negative impact on working capital and thus cash flow in the period,” it said.
RPC made scant reference to the offer to buy it by private equity giant Apollo, which rankled shareholders last week who felt they were getting a raw deal, only saying it had been agreed as before. But the group also mentioned the potential cash offer coming from US-based plastics supplier Berry Global, which announced it was considering entering the race yesterday. RPC said it would engage with Berry under its trading obligations.
The deal has vexed at least two of RPC’s top 15 shareholders – Aviva Investors and Royal London Asset Management said the payout was not high enough given RPC’s future growth prospects.
Today Craig Yeaman, fund manager at Royal London Asset Management, said: “We noted last week that another bidder entering the fray should not be discounted given the low valuation of the agreed deal. Apollo were always going to run this risk having pitched the bid at this level which has clearly given others encouragement.
“Berry Global, being a competitor to RPC, would have plenty of synergies to go after and the first casualties could include senior management who were so willing to accept Apollo’s offer.”
The firm, which has 189 operations in 33 countries and employs more than 24,000 people, saw shares nudge down in early trading 0.19 per cent to 793.50p – still 11p higher than Apollo’s current bid.