Pact Group has announced its financials for the year ending 30 June, saying that “strong organic growth” in packaging and sustainability has brought in $93.5 million in NPAT.
According to the company, this is an increase of 28 per cent from the same time last year.
Its underlying EBIT was up 10 per cent to $182.9 million, while its EBIT margins were up 1.2 per cent to 104 per cent.
Pact Group managing director Sanjay Dayal said, “The resilience of our portfolio was demonstrated once again in the face of significant challenges from the ongoing COVID-19 pandemic, volatility in raw material prices and disruption to international freight.
“Our packaging and sustainability business delivered strong organic volume growth in closures, supported by the consolidation of our platform in Asia and despite the challenges of the COVID-19 pandemic in the region.
“The business also benefitted from improved demand in the agricultural and industrial sectors in Australia and New Zealand and contract wins supported by our circular economy and sustainability credentials. Margins were well managed despite increased input costs in the second half.”
Dayal mentioned that the group’s materials handling and pooling business achieved strong organic growth in hanger reuse services along with continued robust pooling volumes as it continued to increase penetration in the fresh produce sector.
In its contract manufacturing segment, the demand for nutraceutical products in the health and wellness sector improved, according to the company, and it benefited from continued improvement in platform efficiency.
However, Dayal said earnings were lower as volumes in the hygiene category normalised, cycling out elevated COVID-19 related demand in the prior period.
Strategy update
Dayal also provided an update to the company’s strategy.
“We have made good progress on these initiatives in FY21, stabilising operations and increasing margins in our Australian packaging business, announcing plans to construct two new recycling facilities, which will complement our new Albury plant and lift recycling capability in Australia by a further 40,000 tonnes, and completing the acquisition of Flight Plastics in New Zealand,” he said.
“This acquisition provides access to local, high-quality food-grade recycled PET for use in food packaging. In addition, our recycling capability has enabled us to win contracts in the dairy and beverage sector and supply noisewalls with 70 per cent recycled content to a major Victorian infrastructure project.
“Our closures business has also delivered strong organic growth in FY21 and we saw continued momentum in the growth and diversification of our pooling and reuse solutions.”
In respect of its outlook, Pact Group expects further progress in the delivery of strategy and earnings resilience in FY22.
Dayal said in its first quarter, demand is expected to be generally in line with recent trends, though margins will be impacted by higher raw material and international freight costs.
“COVID-19 continues to create market uncertainty. The group has delivered a solid financial performance in FY21 and a strengthened balance sheet, both underpinned by the delivery of our strategy. Our strategy has provided us clarity in vision and a pathway to deliver significant long-term value for all stakeholders. I am proud of the industry leading position Pact is taking in this exciting period of change,” he added.
