Pact Group Holdings, Australasia's largest rigid plastic packaging manufacturer, today announced a ten per cent increase in underlying profit to $45.9 million, compared to the prior corresponding period (pcp) of $41.8 million. Sales revenue $690.6 million was recorded in the six months to December, up 8.4% on the year before.
In his first results announcement since his appointment in August last year, Pact MD and CEO Malcolm Bundey said the strong result demonstrated the resilience of the company’s earnings and the benefits of diversification – notably the acquisition of Jalco which the company made in September last year and sees it entering the contract filling market for the first time.
The positive result has been achieved against a backdrop of global economic challenges, including volumes being impacted by lower demand from the agricultural and dairy sectors, due to unfavourable weather conditions and weak global dairy markets; lower demand in the industrial sector, influenced by weaker mining markets; and net contract losses in the period.
“We remain committed to our business fundamentals, particularly in our drive for efficiency and cash generation,” Bundey said.
“Critical to meeting the challenges of our external environment is our relentless focus on costs and delivery of the targeted returns from the Efficiency Program announced in 2015. This program is now well advanced and we are pleased to report $2.8 million in efficiency savings.”
The Group reported EBIT (before significant items) of $80.0 million, representing a 4.3% increase over the pcp. Growth in EBIT, generated by acquisitions and the benefits realised by the Efficiency Program, was partly offset by the impact of lower volumes.
Commenting on growth opportunities, Bundey said, “The [Jalco] acquisition illustrates our ability to enter adjacencies, leverage our core competencies and deliver shareholder value.
“We continue to look for other opportunities which are strategically aligned to our core sectors and competencies and which meet our disciplined assessment criteria,” he said.
Bundey said Pact is a company with very solid foundations. “Pact has extensive operational and functional capability. The company is strategically well placed with sector leading positions and world-class innovation. We are seen as a supplier of choice by our customers.
“Our product, industry and geographic diversity, our disciplined approach to value accretive acquisitions and our relentless focus on efficiency have enabled us to deliver revenue and earnings growth despite market challenges.
“We reaffirm previous guidance for the 2016 financial year. We expect to achieve higher revenue and underlying earnings in FY16, subject to global economic conditions,” Bundey said.
1H 2016 SUMMARY
$A millions 1H 2016 (1H 2015 Change %)
Sales revenue 688.2 (635.0 +8%)
EBIT (before significant items)1 80.0 (76.7 +4%)
NPAT (before significant items)1 45.9 (41.8 +10%)
NPAT after significant items 41.9 (41.8 +0%)
Interim dividend - cents per share 10.0 (9.5 +5%)
