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RPC continues to experience challenging market environment

RPC Group, the European supplier of rigid plastic packaging, revealed sales volumes in the third quarter of the financial year 2012/13 were on a similar level to the corresponding period of the previous year, despite a more extended shut-down by many customers this Christmas.

RPC Group, the European supplier of rigid plastic packaging, revealed sales volumes in the third quarter of the financial year 2012/13 were on a similar level to the corresponding period of the previous year, despite a more extended shut-down by many customers this Christmas.

The group has seen generally good levels of activity in January, notwithstanding the challenging macro-economic conditions, and said the improvement in the sales mix towards higher added value products such as coffee capsules has continued.

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The group's recently launched "Fitter for the Future" business optimisation project has progressed well, and said other cost efficiency measures are also progressing to plan, while one of the redundant properties is anticipated to be sold this financial year.

Ron Marsh, RPC's Chief Executive said: "Activity levels have been encouraging in what continues to be a challenging market environment. The financial performance in the last quarter of the financial year is set to improve as selling prices are adjusted to reflect increased polymer prices. The continued growth in higher added value products and the cost savings from the Fitter for the Future programme give me confidence for the future."

The group experienced an anticipated decline in third quarter operating profit, but said when adjusted for the effect of an adverse time lag in passing through polymer price variations to the customer base, profitability during the period on a constant currency basis improved due to the enhancement of the sales mix and cost efficiency measures.

It added that it expects the polymer time lag effect will have a positive impact in the final quarter as selling prices will be increased to reflect the higher polymer prices experienced in the third quarter.

"The financial position remains robust with satisfactory cash flow development in the third quarter and significant headroom under the group's debt facilities," the company said.

The share price fell 1.89% to 420.10p by 08:37.

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