Reuters: Hot Stocks: UPDATE 1-RPC Group says strong pound to hit profit; shares fall

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UPDATE 1-RPC Group says strong pound to hit profit; shares fall Mar 28th 2013, 10:48 Thu Mar 28, 2013 6:48am EDT * Expects slightly lower full-year operating profit * Strong pound vs euro to reduce oper profit by 4 mln stg * Shares fall as much as 13 pct (Adds CEO, analyst comments; updates share movement) By Richa Naidu March 28 (Reuters) - Plastic packaging maker RPC Group Plc said it would likely report a slightly lower full-year operating profit due to higher polymer prices and the pound's strength against the euro, sending its shares down as much as 13 percent. The company also said revenue in the year ending March 31 would be lower than last year's. RPC, which makes jars for Heinz Beanz and Nescafe Dolce Gusto coffee-machine capsules, said polymer prices rose to near record levels in September. The prices fell towards the end of 2012 but started to rise again in the current quarter, it said. Finance Director Pim Vervaat said sales in RPC's paint-can business were significantly weaker. The paint-can business accounts for about 9 percent of RPC's overall revenue. "I wouldn't say (there were) any major downturns in any of the other market segments. It is just flattish," Vervaat, who will take over as chief executive on May 1, told Reuters. RPC reported an operating profit of 72.9 million pounds and revenue of 1.13 billion pounds in the year ended March 31, 2012. "Markets look increasingly difficult in growth terms, with little optimism across Europe that 2014 will show much cheer," Panmure Gordon analyst Paul Jones said in a note. Jones downgraded the company's stock to "hold" from "buy" and cut his price target on it to 466 pence from 491 pence. RPC said the strength of the pound versus the euro was expected to reduce operating profit by about 4 million pounds ($6 million). RPC shares were down 11 percent at 402 pence at 1039 GMT. ($1 = 0.6617 British pounds) (Reporting By Richa Naidu in Bangalore; Editing by Maju Samuel) Link this Share this Digg this Email Reprints

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