Revenue at Pact Group was up by 3.5 per cent in the first half of the financial year, but net profit after tax was down by 76.3 per cent for the company, whose share price has risen by 50 per cent this month.
Pact is still dealing with the effects of the closure of resin producer Qenos in Australia, which it says is adding volatility, cost and complexity to the supply chain.
Revenue for the half year from continued operations rose to $929.5m, up from $897.8m (that figure excluding the Crates business which was sold) in the prior corresponding period. The bulk of revenue, $623m, came from its Packaging and Sustainability segment.
The Materials Handling and Pooling segment saw growth of 22.4 per cent to $141m, with underlying EBITDA up by 75 per cent. Its Contract Handling and Manufacturing segment revenue was up by one per cent to $180m.
For the group as whole its net profit after tax fell to $14.1m from $59.3m. Underlying EBITDA from continuing operations rose by 4.6 per cent to $124m.
Pact attributed the growth in sales to an improved performance in the Materials Handling & Pooling segment, coming as a result of volume growth and increased capacity from investments in mobile garbage bin platforms over the past two years.
Underlying earnings for continuing operations before interest and tax for the first half of FY25 was up 11.8 per cent on the prior corresponding period, with five months of trading from the Crates Business exclude. Pact says this result reflects the improved revenue performance and the ongoing impact of Transformation Plan cost savings, which were initially implemented in the first quarter of FY24.
Underlying net profit after tax for the continuing operations is $14.8m, up from a profit of $8.5m last time.
The company completed the sale of 100 per cent of its wholly owned subsidiary, Viscount Rotational Mouldings (VRM), to CRH Infrastructure Products Australia at the end of the year, for which it received a net cash consideration of $21.2m, which was a gain on sale before tax of $12.8m. The VRM business was not a major line of business for the group.
Reflecting on the results, Pact managing director and group CEO, Sanjay Dayal, said, "I am satisfied with the financial results we are reporting today, which have been achieved at the same time as we have progressed our vision of leading the circular economy with further upgrades in our packaging platforms and concluding the sale of VRM."
The Pact Board resolved to not pay an interim dividend in relation to the half-year ended 31 December.
Pact's share price rose by 50 per cent earlier in the month, prompting the ASX to ask the company if it knew why. Pact replied saying it was unaware of any reason why that would be so.
