Update on RPC and Wolseley
Shares of plastic packaging manufacturer, RPC, are up around 4% (at time of writing) on the back of its latest market update.
For its year ended 31st March, the company took revenue of around £1bn, marking a 7% increase over the same period last year.
The decent performance was partly thanks to increased demand for its packaging for personal care, pharmaceutical, food and beverage products.
Meanwhile, that, in addition to cost control measures, saw RPC post net profit for the period of some £44m, representing a healthy 28.5% increase over the prior year.
RPC’s acquisitive strategy also helped…
According to the company, recent acquisitions accounted for 3% of its growth – and the company isn’t about to stop there.
Indeed, RPC is on something of an expansion mission: it announced its growth plans (dubbed “vision 2020”) last November, following challenges that saw the company issue a profit warning last March partly on the back of rising costs.
RPC’s vision 2020 includes expanding in Europe via acquisitions, together with creating a meaningful presence outside of Europe. Since then it has embarked on a few deals, most recently was the company’s swoop on China’s Ace Corporation earlier this month for around £250m.
Of course, RPC’s shares have been on the rise, with the company’s shares having soared around 58% over the last year. Still, RPC looks to be positioning well to create further value.
Shares of Wolseley inched up yesterday (3rd June)…
That followed the release of its third-quarter trading update, which showed that the plumbing and heating products supplier performed relatively well despite a hit from adverse currency movements.
According to the company, adverse currency movements shaved £200m off its revenue and £12m off its trading profit.
That notwithstanding, for the quarter ended 30th April, it reported revenue in on-going businesses of around £3.1bn, up some 5% on a like-for-like basis – though down 0.8% overall.
Trading profit from the company’s on-going businesses came in at £155m, marking a 0.6% increase – at constant exchange rates the increase was around 9%.
All of that was thanks to decent growth in the US and the Nordics – sales were up 9% and 7.5% respectively on a like-for-like basis – which helped offset challenging conditions elsewhere.
For the next six months, Wolseley expects group like-for-like sales growth rate of around 4%.
All of that helped Wolseley’s shares close up 1.6% yesterday – they’re still off around 5% from this year’s peak in April.
Certainly, the company’s positive outlook, as well as the notably improving performance in the US – which represents the bulk of its business – provides reason for upbeat sentiment.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
For further details see our full non-independent research disclaimer and quarterly summary.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.
City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.
City Index is a trademark of StoneX Financial Ltd.
The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.
© City Index 2024