IVE CEO Matt Aitken shared the next stage of the company’s packaging strategy after announcing its half-year results.

Aitken told ProPack that IVE intends to build on the recent JacPak acquisition.

“It’s early days with our move into folded carton packaging through the acquisition of JacPak and everything is going well.

“Our near future focus in the packaging space is to fill the available capacity at JacPak and organically build a packaging capability into our Silverwater site in Sydney to complement the JacPak acquisition,” Aitken said.

Speaking about the half-year results, Aitken said it was a “very solid result”.

IVE reported revenue of $506 million, up 0.6 per cent from $502.8 million for the six months to 31 December 2023.

The group delivered a solid first half performance with EBITDA and margins up on a strong prior corresponding period (pcp).

EBIT included a non-recurring Ovato (Warwick Farm) loss of $5.6 million, while NPAT was also impacted by higher net finance costs.

“Given the more uncertain economic landscape, I am pleased with the first half result which was up relative to a record prior period that was partly buoyed by the post Covid-19 recovery,” Aitken said.

In October 2023, IVE acquired Melbourne-based folding carton player, JacPak, which currently generates annual revenues of around $45m.

The total purchase consideration for JacPak was $35m including $28 million paid on completion, $4 million payable as deferred consideration (subject to 12-month performance hurdles) and the assumption of $3 million of equipment finance leases.

During the two months since acquisition, JacPak contributed revenue of around $7 million which according to the group, was broadly in line with expectations.

By the end of FY24, IVE expects to unlock annual cost synergies of around $2.4 million across procurement, operational efficiencies, finance, and administration, after which the business is expected to contribute annual EBITDA of around $8.4 million and NPAT of around $3 million.

JacPak currently has $15 million of available capacity for potential organic revenue growth. Over the near term, IVE said it is confident of utilising that capacity through new or expanded customer relationships which would increase JacPak’s annual revenue to around $60 million, EBITDA of around $11.9 million and NPAT of around $5.5m.

In addition to organically growing JacPak’s standalone revenues, in FY25 IVE intends leveraging the operational footprint of the group’s Silverwater commercial printing operation (via the addition of new finishing equipment) to support up to $30 million of annual packaging revenues.

Over the medium term, investment in additional equipment would add a further $60 million to capacity resulting in the group achieving its stated ambition of building a packaging business with annual revenues of around $150 million.

Aitken told ProPack earlier this year that he will pursue a ‘growth mindset’ either ‘organically or by acquisition’ towards the folding cartons space following the JacPak purchase.

“We are in a growth mindset towards the folding carton sector, and this can happen organically or through acquisition,” Aitken told ProPack at the time.