Pact Group's sales revenue grew by 9.3 per cent to $1249 million in the last financial year, with five acquisitions opening up new markets for the company.
Managing director and CEO Brian Cridland said favourable currency movements in Pact International also helped, with EBITDA totalling $209 million – 5.3 per cent higher than the previous year.
“Pact continues to work with its customers to find innovative solutions to aid them in dealing with challenging market conditions and ongoing price pressure,” Cridland said.
Pact Australia reported sales revenue of $890 million, up 8.2 per cent on FY14, and EBIT of $86 million, up 5.0 per cent, driven by the contribution from the Sulo business and ongoing efficiency improvements, which were negated by the higher post IPO costs.
Pact International also reported both growth in sales revenue and growth in EBIT. Sales revenue increased 12.1 per cent to $359 million, assisted by an increased contribution from Sulo New Zealand, the Asian businesses acquired at the time of IPO and favourable currency movements. These were partially offset by softer agriculture sales in New Zealand, and weaker demand from industrial customers in China in the second half of the financial year.
Establishment of a joint venture in Thailand (with Weener Plastics) and construction of the new facility in Indonesia to support its multinational customers' businesses in Asia, are both expected to deliver benefits in FY16.
During the year, operating cash flow improved by 8 per cent, excluding the impact of the securitisation program announced on 23 June 2015. With the benefit of the program, Pact delivered operating cash flows of $312 million, an increase of 57 per cent on the previous year.
IN A NUTSHELL:
- Sales revenue increased 9.3% to $1,249.2 million, EBITDA before significant items increased 5.3% to $208.7 million, and NPAT before significant items increased 42.7% to $85.2 million.
- Strong cash flow generation – underlying operating cash flow was up by 8.2% to $215 million, and cash flow conversion was 103%. A further $97 million was generated from the debtors securitisation program taking the total operating cash flow to $312 million (150% cash conversion).
- Acquisitions increased scale and diversity and opened up new markets – five acquisitions made in FY15, the Sulo acquisition delivered opportunities in new markets.
- Efficiency program underway to reduce excess capacity and align with customer requirements, expected to deliver benefits from FY16.
- Increased dividend to shareholders – final dividend of 10.0 cps, up 5.3% on the prior year and franked to 65%. Total FY2015 dividends were 19.5 cps.
In other news for the company, Pact Group board member Tony Hodgson will retire on 30 September after playing a key advisory role over many years with the packaging group.
Chairman Raphael Geminder said Hodgson has a strong history with Pact, and has been instrumental in keeping the executive team focused.
“With the release of the FY 2015 results concluded, Tony felt it was an appropriate time to step down from the board,” Geminder said.
“Tony has been a member of the board since shortly prior to Pact’s listing, and has been chairman of the audit, business risk and compliance committee. Prior to this, he was a longstanding member of the Pact advisory committee. Tony was also co-founder and senior partner of the chartered accounting firm Ferrier Hodgson, which he retired from in 2000 after 24 years. He continues to serve as a consultant to BRIFerrier Chartered Accountants.”
Hodgson is also a member of the advisory council of JP Morgan, non-executive director of the Board of Racing NSW.
“Tony’s guidance has successfully helped us navigate the transition to a listed public company and appropriately meet and manage our financial reporting obligations. We wish Tony all the best, and thank him for his commitment to making Pact an Australian manufacturing success story.”
