At Pact Group's 2016 AGM on 16 November, CEO Malcolm Bundey reflected on the year's successes against a backdrop of challenging market conditions.
A resilient business model, benefits of diversification and focus on efficiency were cited by Bundey as reasons for the company's strong performance in FY 16. Pact Group generated sales of almost $1.4 billion, up 11%, while net profit after tax and before significant items was also up 11% at $94.3 million.
Bundey said the group's growth strategy will remain focused on three core pillars:
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Organic growth
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Operational excellence and efficiency; and
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Disciplined M&A.
“We aim to achieve organic growth by protecting our core and growing with purpose,” he said, noting that organic growth in 2016 was “disappointing” due to market conditions and some lost customer contracts. To redress this, the group has made some changes to the management structure and introduced “disciplined sales pipeline management processes”.
A highlight this year was winning a long-term contract with Woolworths to provide crate pooling and washing services to its fresh produce providers, which Bundey said gave impetus to the group's diversification into the materials handling sector.
In terms of the second pillar, driving efficiency, he said the group is implementing lean manufacturing techniques across its manufacturing footprint.
“We have begun the implementation at 10 of our sites. I have been impressed with the way it's been embraced by employees, as well as the efficiency opportunities already identified.”
In regard to M&A, Bundey pointed to the group's successful acquisition of Jalco, marking its foray into co-manufacturing, as well as three bolt-on acquisitions.
Recent purchases include Fruit Case Company, a New Zealand crate pooling business bought in July, and in September, Australian Pharmaceutical Manufacturers, a specialty contract manufacturer servicing the growing nutraceuticals sector.
He said the group's acquisitions pipeline was strong.
Bundey said that in FY17 the group expects to achieve higher revenue and earnings, subject to global economic conditions.
