The company reported a $4.7 million net profit for the six months to 31 December 2012 after posting a $2.2 million loss in the first half of 2011-12.

Revenue fell 10.7% year-on-year to $94.8 million, with 88% of revenue coming from Australia and 12% from New Zealand.

Debt in the first six months of the year dropped from $38.9 million to $33.2 million. Colorpak recorded a profit margin of 4.98%, better than the underlying margin of 4.48% recorded the year before.

The company signed a $30 million contract renewal with AstraZeneca in October. However, revenue fell due to "large volume losses" in Australia and New Zealand. That was mainly due to a "key longstanding customer" moving its manufacturing out of Australia and the loss of fast food customers on both sides of the Tasman.

[Photos: Colorpak rebrand event]

Colorpak added that its "cost base has been adjusted swiftly in response".

Colorpak said its Victorian plant rationalisations had made it a more efficient business. Further efficiencies are expected from the consolidation of two New South Wales sites into Regents Park, which is scheduled to be completed "early in the 2013 calendar year".

The company said it had a good underlying position, despite "cost and competitive pressures", and that it had now "passed the peak of the debt cycle and the bottom of the margin cycle".

"The second six months will continue to be heavily focused on completion of the rationalisation of the NSW operations… across the business and we will continue to drive for efficiencies from each production facility, including balancing of capacity between sites, in order to achieve optimal financial results."

[LinkedIn: Is it better to increase margins or revenue?]

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