|Borrowings rise to fund stock build up.|
RPC itself reports a 16% increase in the cost of polymer from the first half of 2006/07 to the same period of 2007/08, together with higher transport, electricity and packaging costs. The company raised its borrowings by £22m, primarily because of both the cost of polymer and the tighter payment terms being imposed by producers in a sellers’ market.
Restructuring charges associated with recently announced rationalisation measures amounted to £10.2m, effectively halving the operating profit for the period to £8.4m against £16.2m for the equivalent period of last year.
However before taking the charge into account, the operating profit was slightly up at £18.7m (versus £18.4m). Pre tax profit totalled just £3.7m compared with £12.9m for the first half of 2006.