Integration costs put Colorpak into the red

The packaging giant’s $9 million assimilation costs of Carter Holt Harvey’s ANZ folding carton operations, has overshadowed its good underlying profit.

Colorpak had a record half-year with profits up 25 per cent to $4.7m. It had a 139.4% sales revenue jump over the previous period to $104m. However, the $6.98m cost of internal consolidation and integration made the half yearly result a $2.23m loss.
Nine months on from acquiring the distressed assets of CHH’s folding carton division, the manufacturing operations have been completely pulled from the Reservoir site. Colorpak split the packaging operations across its existing Melbourne sites, Braeside and Mt Waverley, and sold off the sheeting assets to BJ Ball.
The company expect the integration activities to continue for another six months.
According to an ASX report the CHH acquisition has increased the company’s exposure to seasonality with the first half of the year performing stronger than the previous period.