A great result and increased dividends, up 13.8% due to AUD v USD.
A great share to own if Billy Shorten wins Government. There is more gas in the tank with the Bemis T/O. Australia's Amcor closes in on takeover after US government shutdown By Nick Toscano
February 11, 2019 — 1.15pm
Australian manufacturing giant Amcor is in "advanced discussions" with regulators in the United States, Brazil and Europe to secure approvals for a multibillion-dollar buyout of a major American rival after the original time-frame blew out due to the US government shutdown.
Amcor, a $16 billion packaging manufacturer, had initially hoped to complete its $9 billion all-stock buyout of Wisconsin-based Bemis by the first quarter of 2019 – a combination that would make Amcor the largest plastic packaging company in the world. But the expected date was pushed back to the second quarter of 2019 due to regulatory delays caused by the partial US government shutdown.
Amcor is poised to become the world's largest flexible plastic packaging manufacturer.CREDIT:THE AGE
The shutdown, affecting nine federal departments and hundreds of thousands of employees, came amid deadlocked negotiations over funding for US President Donald Trump's proposed border wall with Mexico.
Amcor on Monday told investors the process of securing required antitrust clearances and other regulatory consents in all jurisdictions had "either been completed or is progressing in line with expectations".
Price hikes hit profits at packager Amcor
"In each of these regions, discussions are at an advanced stage," Amcor chief executive Ron Delia said. "In fact, we expect a decision to be announced by the European Commission in the coming days."
Melbourne-based Amcor manufactures flexible and rigid plastic packaging for food, drinks and cigarettes, employing 35,000 workers across 200 plants in 40 countries. Bemis employs 16,000 people and runs 57 plants globally, also supplying flexible and rigid plastic packaging. Its customers include major consumer products companies such as Unilever and and Johnson & Johnson.
The update on the takeover of Bemis was delivered as Amcor released its financial results on Monday for the six months to December 31. Its underlying after-tax profits increased by 3.4 per cent to $US328.5 million, excluding the impact of currency swings, the company said.
Its net profit of $US267.6 million for the half-year was down from $US329.7 million for the same period a year earlier.
"We remain on track to deliver against the full-year outlook we provided in August 2018, which has not changed," Mr Delia said. "In the 2019 financial year we expect both the flexibles and rigids segments to achieve solid underlying earnings growth in constant-currency terms, and cash flow is expected to be strong."
Amcor has extended its multi-year relationship with coffee giant Nespresso for the supply of coffee capsule packaging.CREDIT:JEFFREY CHAN
Following the release of the results, Amcor's stock price jumped 1.9 per cent, to end the day trading at $14.56.
Amcor lifted its interim dividend by half a US cent, or 2.4 per cent, to 21.5 US cents. But following the fall in the Australian dollar, the interim dividend for Australian shareholders will be 29.78¢ – an increase of 13.8 per cent on the previous year – to be paid on April 1.
Worldwide, manufacturers of plastic packaging such as Amcor have been battling substantial increases in the cost of materials including resin, aluminium and liquids. Price spikes damaged Amcor's full-year profits in 2018 by $58 million.
John Purtell, an analyst at Macquarie Wealth Management, on Monday said it "feels like the range of headwinds" that Amcor faced over the past 12 months had now "started to abate".
Mr Delia said Amcor, in the past six months, had extended its multi-year relationship with coffee giant Nespresso for the supply of coffee capsule packaging, and had opened a new factory in the high-growth market of India, dedicated to manufacturing packaging products for global grocery giant Unilever.
AMC Price at posting:
$14.56 Sentiment: Buy Disclosure: Held
(20min delay)
