Difficult trading conditions at home and overseas continue to impact on the performance of Pro-Pac, with sales in the June quarter down by 15 per cent on the same period last year.
The group is expecting to be in the red for the full year, to the tune of around $7.5 million (before significant and one off items), when it releases its results next month. It says it will be axing around 10 per cent of its workforce, and reducing its cost structures in the first half of the new financial year in response.
Pro-Pac's full year revenue of $295.2 million was $47 million lower than the previous year’s $339.1 million.
The company says the trading environment “continues to be challenging”, and says low consumer confidence is resulting in subdued volumes in its existing customer base, which was compounded with additional de-stocking in the lead up to 30 June.
In addition, the reverberations from Israel’s war on Palestinians have seen export sales to its major customers in the Middle East “materially reduced” since the first half of the financial year, as disruption being caused by the war is affecting logistics and customer sentiment.
Revenue for the three months to 30 June was $69.1 million, which was slightly higher than the previous quarter of $68.3 million, but down by $10.8 million from the same period in 2023.
In that fourth quarter, flexibles revenue decreased to $53.9 million from $63.1 million, while industrial declined by $1.6 million to $15.2 million, from $16.8 million in the same period last year.
As of 30 June, the company had drawn down $23.8 million from its $37.8 million credit facilities, leaving it with $14 million, although that includes $7.4 million from a government grant to be used for specific purposes.
During the quarter, Pro-Pac paid the final $800,000 payment on its new printing press, which is now fully operational. It also paid $200,000 on deposits for assets covered by its government grant as part of the establishment of a soft plastic film recycling plant.
There was also a change at the top for Pro-Pac as Jonathan Ling retired as director and chairman of the company, with
current CEO John Cerini also taking on the the role of executive board chairman.
