Colorpak records 25% net profit growth
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- Published on Wednesday, 01 February 2012 00:10
AUSTRALIA – Packaging converter Colorpak has posted a 25% increase in half year net profits after tax to $4.75 million, as the first full six months of the acquired Carter Holt Harvey’s (CHH) folding carton business significantly lifted revenue.
Declaring it “a very pleasing and productive half year”, Colorpak recorded sales revenue of $104.1 million, up 139% on the previous period in FY2011, and underlying EBITDA growth of 32% to $10.53 million.
The company also reported that the integration of CHH is on track, with $6.98 million in after-tax restructure and business combination costs reducing reported net profit after tax to a loss of $2.23 million.
Colorpak took ownership of CHH assets on 1 March 2011.
“We are very pleased with the way the integration is progressing,” said Colorpak managing director Alex Commins. “Costs incurred due to the integration program 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 Reservior site, rebalanced the production load across the group’s full operations and implemented new management information systems,” Commins added.
“During this time, our legacy businesses have maintained momentum,” he explained, adding that Colorpak’s new paper cup forming and lid division delivered incremental revenue and customer retention across the business remains high.
For the second half of the year, Colorpak will continue to focus on the integration process of the “distressed” CHH assets.
“The acquisition has increased the seasonality in Colorpak’s earnings due to higher summer demand for packaging products,” said Commins. “Our earnings are now more weighted towards the first half of the financial year.”
According to Commins, the Australian packaging industry “remains highly competitive” with pressure continuing to grow from Asian producers. He noted that the local industry’s priorities remain the building of scale and efficiency into local operations and consolidation of less profitable manufacturers.
“Despite these pressures, Colorpak remains on target to deliver another solid result for the full year,” he declared.
Colorpak currently has five plants and 770 employees in Melbourne, Sydney and Auckland.
