Pre-close Trading Statement

29th March 2012

RPC Group

Pre-close trading statement

RPC Group, Europe's leading supplier of rigid plastic packaging, today issues its pre-close trading statement for the financial year ending 31st March 2012 ahead of its preliminary results due to be published on the 12th June.

Trading performance

Activity levels in the fourth quarter have generally been encouraging and revenue for the financial year 2011/12 is expected to be well ahead of last year due to the inclusion of the Superfos business and higher like-for-like revenues with overall sales volumes (as measured in polymer tonnes converted) at similar levels despite the continuing trend towards light-weighting. The sales mix has improved significantly towards higher added value products such as coffee capsules, long shelf-life packaging, personal care and pharmaceutical products.

After a relatively benign raw material price environment from June to December 2011, polymer index prices have risen circa 20% since January 2012 reaching near record levels in March which has impacted margins in the last quarter of the financial year. The increase in polymer prices will be passed through to the customer base in the subsequent quarters.

The operating profit (before exceptional items) is projected to be well ahead of last year due to the inclusion of Superfos, the realisation of the associated synergies and the improving sales mix. Despite the recent polymer price developments, the operating profit (before exceptional items) in the fourth quarter and for the full year is anticipated to be in line with management's expectations. The financial position remains robust with a good cash flow development in the fourth quarter and significant headroom under the Group's debt facilities.

Other developments

The integration of the Superfos business is reaching its conclusion with the closure of the Runcorn site and the subsequent transfer of business to other RPC sites expected to be completed by the end of June 2012.

The previously announced withdrawal from the loss making market segments of automotive components in Germany and vending cups in mainland Europe is progressing well with consultations ongoing. Exceptional costs associated with this strategic exit are currently anticipated to be circa £15m, which includes significant non-cash impairment costs and asset write-downs. The proceeds from asset sales together with the release of working capital are expected to be more than sufficient to fund any redundancy costs.

Ron Marsh, RPC's Chief Executive said:

"The Group's performance in the fourth quarter has been encouraging despite the rising polymer prices as appropriate cost measures were taken and the growth in higher added value products continued. With the Superfos integration approaching completion, I am confident that RPC will deliver further progress towards achieving a 20% ROCE despite current macro-economic uncertainties."

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