Australian packaging business Colorpak has reported a half year net profit after tax (NPAT) of $4.72m, a slight drop from the previous year’s $4.75m on sales which dropped by 10 per cent.
The profit figures come on first half sales which slipped to $94.2m from $104.1m.
Alex Commins, managing director of Colorpak says the result was strong, and expected in a challenging market.
Commins says, “On a smaller sustainable revenue base due predominantly to anticipated loss of low margin business that was taken on in the CHH acquisition, we have maintained profits by making timely adjustments to our cost base, generating increased margins and cash. We have also lifted shareholders dividends and reduced debt.”
The EBITDA (earnings before interest, taxes, depreciation, and amortisation) was up by 1.6 per cent to $10.7m and the EBITDA margin is also up from 10.1 per cent to 11.5 per cent.
Cash generation was $9.7m up by $1.6m from the previous comparable period. The debt (net of cash at bank) is down 14.7 per cent from $38.9m to $33.2m.
Earnings per share are 5.79 cents and interim dividend is up from 1.5 cents to 1.75 cents fully franked, payable April 2.
Commins says, “At the end of the financial year 2012 we noted that the company was at the peak of its debt cycle and bottom of its margin cycle. Just six months later and 22 months after the acquisition of the Carter Holt Harvey assets, we have turned it around, absorbing the acquisition costs, shedding low margin business and increasing production efficiencies to achieve a near record half year result. “
Colorpak recently announced a $30m five year supply contract extension with global pharmaceutical company, Astra Zeneca.
Commins says, “We are focused on the bottom line - targeting high margin sectors as well as those producing everyday staples - while at the same time continuing to reduce production costs.”
Comminsa says his other expectations include the underlying results of business to continue to track well, seasonality in revenues results in profit in second half being lower than the first half, a focus on improving EBITDA margins as integration activities continue, and business commitment to improving free cash flow and debt reduction.
