The Share Centre adds RPC to its ‘buy’ list

Sheridan Admans, investment research analyst at The Share Centre, explains why RPC is attractive to medium risk investors looking for a balanced investment.

“Whilst RPC may not be a well-known brand for investors the names it supplies plastic packaging to certainly are, including Nivea cream and Dulux paint. The company’s recent move into the fast growing Asian markets, the streamlining of European operations and strong dividend policy are all attractive for investors looking for a mixture of income and growth. We have added RPC to our ‘buy’ list for medium risk investors seeking a balanced investment. The poor economic backdrop in Europe and imminent prospect of rising UK interest rates may weigh on the shares. However, we believe they offer good value at this level, having dipped from a recent record high-point in June.

“The most recent trading update showed trading slightly ahead of last year, although the strength of sterling against the euro and dollar has had an impact on profits. Investors will be interested to hear the recent acquisitions, in the UK, Europe and China, are all performing well, with integration on track.

“RPC's 2015 PE is 11.8, which is slightly lower than its main UK peer Rexam, although RPC's earnings and dividend are forecast to grow by 20% over the next two years. The market welcomed the group's acquisition of a Hong Kong-based packaging group in May, and some analysts have subsequently raised their earnings forecasts for this year and next. Consumer confidence is improving in the UK and US and the growing middle classes in emerging markets should boost growth.”