RPC Group hikes divi but warns of tough environment

Plastic packaging firm RPC Group hiked its dividend after the successful acquisition of food packaging firm Superfos helped drive up profits.

Revenue increased by £311m to £1.13bn in the year to the end of March.

Pre-tax profits rose to £59.6m, compared to £34.6m the year before, with earning per share up to 37.3p from 29.9p last year.

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The company increased its final dividend to 10.2p, representing a full year increase of 25%.

RPC also said that it was ahead of expectations in its plan to hit a target of 20% return on capital employed, reaching 19.1% during the year.

It has been helped considerably by the successful integration of plastics and cardboard packaging business Superfos, which it bought at the start of 2011.

The company said the deal had been 'significantly earnings enhancing' and had delivered cost and revenue synergies of £10m in the first year of ownership, with more to come.

In addition it had benefitted from around £20m of cash synergies related to working capital management.

However, the firm noted that in the short term it was facing a difficult and uncertain macro-economic environment.

"The current weakness of the euro against sterling should be noted as a significant part of the earnings are made in the euro zone," said Chief Executive Ron Marsh.

"The new financial year has started satisfactorily with results in line with management expectations."

In January RPC said it was withdrawing from its loss making businesses of vending cups in mainland Europe and automotive components in Germany.