Second quarter trading results for Pro-Pac were below its expectations, with the company citing challenges coming from market conditions, and exchange rate movements.
Pro-Pac said the challenges will continue, and will impact expected results in the second half. However, it says its first half EBITDA, to be released 28 February, will show an improvement over the second half of last year.
The company is currently working with advisors to explore and execute on plans for longer term funding arrangements, and to assist with a strategic review of its businesses.
Revenue for the quarter to December was $73.1m, up by $4.3m on the previous quarter’s $68.8m. Flexibles account for three quarters of Pro-Pac revenue, with Specialty Packaging contributing the remaining quarter.
The company had $600,000 cash on hand on 31 December, and $8m in unused funding facilities available. It drew down $5m in a new asset facility from ScotPac during the quarter, on which it is paying 12.99 per cent interest.
It also entered into a new short-term financing facility with its major shareholder Bennamon, for $13m, on which it is paying 10 per cent interest. Of the $13m, some $3.75m is to be loaned at the discretion of Bennamon.
Of the $44.6m credit available to it as at 31 December, Pro-Pac had used $36.6m.
The Group has continued to work with identified potential founding partners to source additional funding required for establishment of a soft plastic film recycling plant. Negotiation of a trade waste agreement with Albury City Council (the approving authority) is ongoing.
