After a pretty wild 2017, which saw the stock plunging 33% in the first 6 months of the year, before recovering to £8.50 by the end of the year, 2018 has been rather sedate in comparison. Though it has moved lower, to a current trading price of £7.87, it has broadly ranged between £7.50 and £8.25, lacking any reason to break out at either end.
Back in March the company released a pre-close statement that failed to really shift the needle in terms of its market performance. In that report RPC Group said that the ‘positive trading trends’ outlined in January’s Q3 update – where it saw organic growth of 2.6% and an acquisition-boosted 31% surge in revenue to £898 million – had continued.
This led the company to claim its revenue for the full year would be ‘significantly’ higher than in 2016/17, driven by ‘organic growth and aided by acquisitions, polymer price and foreign exchange tailwinds’. Profits and cash generation, meanwhile, are on track to arrive ‘in-line with management expectations’.
As for the push to end, or at least dramatically slash, the use of plastic packaging, RPC highlighted the fact that it is Europe’s ‘leading recycler of polyethylene film’, and will continue to ‘develop products that have minimal environment impact and that can be easily recycled at the end of their life’.
In terms of the reaction to Wednesday’s annual figures, RPC has set a lofty target to reach with March’s comments, with investors now looking for a hefty increase on last year’s £2.747 billion revenue.
RPC Group (LON:RPC) has a consensus rating of ‘Buy’ alongside an average target price of £11.36.
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