Pre-close Trading Statement

24 March 2011

RPC Group Plc

Pre-close Trading Statement

RPC Group Plc, Europe's leading rigid plastic packaging supplier, today issues its pre-close trading statement and update on the Superfos acquisition synergies ahead of the announcement of the full year results due to be published on 21 June.

Performance 2010/11

This section refers to RPC's performance in the financial year excluding the impact of the Superfos acquisition.

Revenue in the financial year 2010/11 is anticipated to be well ahead of last year with higher selling prices and increased volumes. Selling prices have risen due to the pass through of increasing polymer prices to the customer base as well as an improvement in the sales mix as significant growth has been achieved in the higher added value sectors of pharmaceutical, personal care, long shelf-life and coffee capsules.

Polymer prices have risen throughout the financial year by circa 20% and reached record levels in the period January - March 2011. The Group is able to pass through these increases onto its customer base, albeit with a time lag which has had a significant negative impact on the full year margins. The Group is confident in its capability to pass through both the most recent and any future polymer price increases.

In spite of these polymer price developments, the operating profit (before restructuring and impairment charges) and adjusted profit before tax* for the full year are anticipated to be better than management's expectations. This has been driven by the improvement in volumes and sales mix as well the lower cost base achieved through the finalisation of the RPC 2010 restructuring programme.

Superfos acquisition

The acquisition of Superfos Industries a/s ("Superfos"), one of the leading European manufacturers of injection moulded plastic packaging, for €240 million (on a debt and cash free basis) was completed on 18th February. Superfos's results will be included in the enlarged Group accounts from that date forward.

The trading performance of Superfos in January and February has been better than the corresponding period last year and is ahead of management's expectations as sales volumes improved by circa 5%. Superfos is also able to pass through polymer price increases to its customers albeit with a time lag.

The cost and revenue synergy potential of the enlarged Group as a result of the Superfos acquisition has been reviewed further and is now estimated to be in the range of £15 million to £25 million per annum from the third full year after acquisition. At least £5 million is anticipated to be realised in the financial year 2011/12. In addition working capital cash synergies of £20 million have been identified, of which circa £10 million is expected to have been realised in the current financial year ending March 2011.

As part of the harmonisation of accounting policies and estimates for the enlarged Group, the depreciation period for production machinery will be aligned to 10 years. This is in line with the present Superfos depreciation policy as well as industry practice and, having evaluated the Group's existing plant and equipment, the harmonised depreciation period is considered to more accurately reflect its useful economic life. This change will be applied retrospectively from1st April 2010 and is anticipated to reduce the depreciation charge by up to circa £5 million for both the financial years 2010/11 and 2011/12. The Group's ROCE target is being increased to reflect this change.

Financial position

The acquisition of Superfos has been funded with a mixture of new debt facilities and a rights issue which raised approximately £85 million (net of expenses). The financial position of the enlarged Group following the acquisition is robust and will be enhanced by the early cash synergy projected in March 2011.

Commenting, Ron Marsh, RPC's Chief Executive Officer, said:

"It is very pleasing to see that the overall performance of the Group has improved and is ahead of our expectations despite the headwind we have faced this financial year in terms of rising polymer prices. Margins will be enhanced going forward as the sales mix continues to move towards higher added value products. The Superfos acquisition will further strengthen the enlarged Group as we continue the integration and benefit from the synergies that exist. I am confident in the Group's growth prospects based on leading market positions, good technological capabilities and exciting new product initiatives, supported by a strong financial position."

* adjusted profit before tax is operating profit before restructuring and impairment charges less net interest

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