Half year revenues at Pact Group, currently the subject of a takeover bid by majority owner Raphael Geminder’s Kin Group, fell by 4.7 per cent in the six months to 31 December.
Pact says the reduction in its revenues was due to reduced demand across the Australian industrial, health and personal care packaging businesses, as well as a late start to the New Zealand dairy season. Subdued demand in China also contributed to the Pact downturn.
It also says the sale of half its Crates business on 30 November meant lower input form that segment, but the downward trends were partially offset by “solid” sales performances in Materials Handling & Pooling, and the Contract Manufacturing segments.
The company achieved revenue of $951.2m compared with the $998.2 for the same period in the previous year. Its underlying EBITDA slipped by 2.9 per cent or $4m to $137m, while its underlying EBIT rose by 3.9 per cent or $2.9m to $78.3m.
Pact says the uptick in EBIT reflects the impact of its $20m a year Transformation Plan cost savings, as well as reduced pricing volatility across the supply chain.
EBIT in its Packaging & Sustainability segment fell by 15.5 per cent to $48.4m, but in Materials Handling & Pooling it almost doubled, up by 91 per cent to $10.1m.
Net profit after tax fell by 20 per cent to $21.1m, while reported net profit after tax was up by 148 per cent to $59.3m. Shareholders will not get a payout for the period and the company will continue with a suspended dividend.
Sanjay Dayal, CEO and managing director of Pact Group, said, “Market conditions were challenging in the first half, as de-stocking continued and cost-of-living pressures impacted on consumers, particularly in Australia, New Zealand and China.”
During the half year, Pact sold half its Crate Pooling and Manufacturing business, which meant 50 per cent of the figures kicked in from 1 December. The new joint venture crates business has been rebranded as Viscount Reuse.
Pact continued with building its national network of plastics recycling infrastructure with a new Melbourne facility opening in December, it will be able to recycle up to one billion 600ml PET bottles a year. Another facility, also in Melbourne, capable of recycling HDPE resin, is due for commissioning by the end of March.
As for the takeover bid, Geminder’s protracted bid to buy the whole of Pact will run until at least the beginning of March, with the offer to acquire all shares now extended.
