Colorpak has delivered a record half year with profits up 25 per cent to $4.7m, however the packaging giant has had to fork out $6.980m in costs related to the integration of the Carter Holt Harvey business, resulting in a loss of $2.230m.
Despite the loss, Colorpak’s sales revenue reached $104m, a 139 per cent jump on the same period the year before. Meanwhile, underlying earnings (EBITDA) were up 32 per cent to $10.5m and the interim dividend maintained at 1.50 cents per share, fully franked.
Commenting on the result, Alex Commins, managing director of Colorpak says the legacy business has performed solidly during the half year as the company continues to successfully integrate the CHH assets since taking ownership in March last year.
He says, “We are pleased with the way the integration is progressing. Costs incurred due to the integration programme are on budget and employee commitment to the changes has been positive.
“In the half year we have consolidated the CHH operation sites by closing the Reservoir site, rebalanced the production load across the group’s full operations and implemented new management information systems.”
In a statement to the ASX, the company says that its legacy businesses have maintained momentum and the new paper cup forming and lid division delivered incremental revenue and customer retention across the business remains high.
Commins adds the focus for the second half of the year will remain heavily on the continued integration of the distressed CHH assets.
He says, “The acquisition has increased the seasonality in Colorpak’s earnings due to higher summer demand for packaging products. Our earnings are now more weighted towards the first half of the financial year.
“The Australia packaging industry remains highly competitive with pressure continuing to grow from regional producers in Asia. Building scale and efficiency into local operations and consolidation of less profitable manufacturers remains a priority for the industry.”
