$3.00? Is that the next level ?
I heard someone saying in an elevator ...or was it online? .....that it’s good to see where it all ends up ... and today’s volume is already close to yesterday’s
I am still curious as to how the Visy guy can be making money building plants in Australia while his brother in law here needs to move offshore.
The fund who already gave the boss ‘a talking to’ can’t be very happy
In case anyone’s interested, yesterday’s news was :
Here’s The Australian’s (updated) take today “Pact shares plunge as it takes $340m writedown Pact Group chairman Raphael Geminder. Picture: Aaron Francis
12AM FEBRUARY 13,2019
The packaging company controlled by Melbourne billionaire Raphael Geminder, Pact Group, has suffered a fresh blow after taking a writedown of up to $340 million as it counts the cost of challenging trading conditions.
Pact said a review of the carrying value of its assets had revealed non-cash impairment charges in the range of $310m-$340m for its first-half profit, which will be delivered to the market on February 20.
“The impairment charges reflect challenging trading conditions and a moderated long-term outlook for the group’s Australian businesses, resulting in the use of more conservative assumptions regarding growth and discount rates,” Pact said.
It expects full-year earnings in a range $230m-$245m, citing uncertainty “around the speed with which revenue and efficiency projects can be delivered and the rate with which input cost lags can be recovered”.
For the half year, earnings before interest, tax, depreciation and amortisation is expected to be about $110m.
Pact in November cut its 2019 earnings guidance to $245m, from a prior forecast of $270m-$285m, blaming the downgrade on lags in recovering higher than anticipated resin costs and higher charges for contract manufacturing materials.
Pact shares plunged 9.7 per cent to $3.55 yesterday.
Mr Geminder, executive chairman and 40 per cent-owner of Pact, said the earnings revision reflected tough conditions.
“It has been a challenging start to the year,” Mr Geminder said.
“Our results reflect significant input cost headwinds and weaker demand conditions in some sectors. These challenges have required us to reassess the carrying value of our assets and, disappointingly, has resulted in impairment charges.”
Credit Suisse warned in October that Pact would struggle to meet its guidance numbers with high Australian dollar resin prices potentially affecting volumes.
The price of resin — a raw material used to make plastic — could jump 28 per cent for Pact in the first half of 2019 compared with the same period last year, the broker estimated.
Pact shares have now fallen by 28 per cent in the last year and, although there has been a recovery in the last few months, the company’s stock remains nearly 7 per cent below its $3.80 IPO issue price in 2013.
The company’s shares plunged by 22 per cent on August 15 last year — its biggest ever decline — after its full-year net profit missed both analyst consensus estimates by 10 per cent and the company’s own indication that it would boost the prior year’s earnings figure.
That prompted the manufacturer’s second-largest shareholder, Investors Mutual, to write a letter to the company’s board calling for a stronger performance.
Mr Geminder — leading the company as executive chairman until a replacement for former chief executive Malcolm Bundey is found — vehemently rejected criticism from the market that Pact had been too focused on growing by acquisition at the expense of developing its core organic business.
Pact, the nation’s largest manufacturer of rigid plastic packaging, also threatened in November to move more of its operations offshore to Asia because of the soaring cost of doing business in Australia.
Pact has closed three local manufacturing sites over the past 12 months among its more than 60 plants across Australia, New Zealand, Asia and America.
Pact supplies a wide range of plastic and steel packaging to the food, household cleaning, pharmaceutical, personal care, agricultural, chemical and industrial markets.”
PERRY WILLIAMS
SENIOR BUSINESS WRITER
Perry Williams joined The Australian in 2018. Previously he was Asia energy reporter for Bloomberg News and prior to that held senior roles at the Australian Financial Review including resources editor and dep... Read more Share this article
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