The war on plastic wipes £375m off packaging firm
A CLAMPDOWN on plastic and fears over cash generation slashed nearly £375m off the value of packaging firm RPC.
The worries overshadowed otherwise solid full-year results, with a 36pc increase in revenue to £3.7bn and a 105pc increase in pre-tax profit to £316.6m in the year ending March 31.
Its results follow pledges from the Government and the EU to stamp out single-use plastic products including cutlery, drinks stirrers and straws in a bid to help the environment.
Analysts have pointed out that RPC does not make any of the items covered by a ban, although that did not make investors any less nervous.
RPC, which is listed on the FTSE 250, says it is focusing on developing recyclable and biodegradable plastics.
Brokers also raised concerns about RPC’s volatile cash flow, which dipped 4pc to £229.2m over the past year. Its shares fell 11.9pc, or 92.2p, to 681.8p.
The FTSE 100 edged up 0.33pc, or 25.57 points, to 7712.37, while the FTSE 250 notched up a 0.57pc, or 119.54 point gain, to 21,171.40.
Oxford Biomedica signed a deal with a US company to commercialise a gene-based therapy for Parkinson’s disease that could earn it up to £628m.
The biotech firm will receive £22m from Axovant Sciences, with the rest to come once certain milestones, such as getting regulatory approval and hitting sales targets, are hit. The announcement sent Oxford’s shares soaring 18.9pc, or 137p, to 861p.
Back on the FTSE 250, analysts at Liberum were feeling trigger happy, dishing out downgrades to transport group Stagecoach as well as property firms Rightmove and ZPG, the owner of Zoopla. The broker cut Stagecoach’s rating from ‘buy’ to ‘hold’ due to fears over its struggling bus divisions.
In a note, Liberum said: ‘ With little prospect of rapid progress in its bus divisions and significant doubts about the potential profitability of future rail franchises, a more cautious stance is warranted.’ Shares slipped 2.5pc, or 3.5p, to 139.2p.
Rightmove and ZPG were both cut to ‘hold’ over concerns their shares had peaked in the absence of any likely bidders. Rightmove shares dipped 0.3pc, or 14p, to 4946p, while ZPG edged up a tiny 0.04pc, or 0.2p, to 488.4p.
Investors were clearly feeling generous yesterday as they dished out millions of pounds to cashhungry firms. Struggling carpet seller Carpetright raised £60m as it continues its battle to stay afloat. The fund-raising is part of a turnaround plan that will see it close 92 shops. Shares dropped 4.6pc, or 1.6p, to 33.4p.
Plans to raise £1m caused shares in cake decorator Real Good Food to crash 15.8pc, or 1.5p, to 8p. The AIM-listed firm wants the cash to boost its working capital.
Chemical instruments maker Microsaic Systems also went cap in hand to investors to raise £5.5m. Shares fell 11.1pc, or 0.25p, to 2p.
Gambling software firm GAN reiterated its plans to launch internet sports betting in New Jersey and Pennsylvania in the wake of the US Supreme Court’s decision to lift a long- standing ban. Shares leapt 12.5pc, or 6.75p, to 60.75p. Savannah Petroleum shares ticked up 4.8pc, or 1.5p, to 32.5p after it said it had discovered oil at a well in Niger, central Africa.
Harvey Nash shares hit a fouryear high after the technology recruiter reported a 7pc increase in gross profit for the quarter ending April 30. Shares shot up 8.7pc, or 9.25p, to 115.25p.