Australia's biggest plastic packaging manufacturer Pact reported a profit of $67.63 million for the year to June 30, up more than 17% on the previous year. Revenue grew by 9.3% to $1,249 million, underpinned by new sales from acquisitions and favourable currency movements in Pact International.
Pact Australia reported sales revenue of $890 million, up 8.2% on FY14, and EBIT (earnings before interest and tax) of $86 million, up 5.0%, driven by the contribution from the Sulo business and ongoing efficiency improvements, which were negated by the higher post IPO costs. The company listed on the ASX in December 2013.
Pact International also reported both growth in sales revenue and growth in EBIT. Sales revenue increased 12.1% 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.
In an ASX statement, Pact said the establishment of a joint venture in Thailand (with Weener Plastics) and construction of the new facility in Indonesia to support multinational customers businesses in Asia, were both expected to deliver benefits next year:
Through the year Pact acquired Sulo and four smaller bolt-on businesses, providing access to new markets and greater diversity within its customer base. The Sulo business, acquired in August 2014, has been performing above expectations. The remaining acquisitions were mostly completed towards the end of the financial year, with benefits to be delivered in FY2016.
In June, Pact announced the $80 million acquisition of Jalco, a contract manufacturing business with operations in New South Wales. The deal is expected to be completed on 1 September 2015.
“Pact continues to build on its very long history of successfully acquiring and integrating businesses to deliver growth in earnings,” said Brian Cridland, Pact MD and CEO. “These acquisitions have and will broaden our business into new markets, increasing the scale and diversity of our business and opening up growth opportunities for the future. We remain committed to our strategy which is to focus on resilience, innovation and growth. The Board and management continue to assess a range of M&A opportunities focussing on adjacencies, geographical expansion, and acquisitions that will bring about transformational change and deliver long-term shareholder value and returns.”
Pact will pay a final dividend of 10c per share, 6.5c of which will be franked. Combined with an interim unfranked dividend of 9.5c, Pact’s total dividend comes to 19.5c per share.