Alex Commins, managing director, Colorpak says “We are building a track record of executing on our strategy. We told the market that the CHH acquisition would be earnings accretive 2011/12 and we have delivered on this commitment to our shareholders.”
Despite the tough trading conditions, the company transformed itself during 2011/12 with a vision to build a profitable and sustainable future for the company. Soft retail spending, cautious behaviour from Colorpak customers and a strong local currency has coincided to limit the potential upside to its results. Underlying sales in 2012 reported $191m, a 53.7 per cent change thanks to the Carter Holt Harvey business
Commins says “The level of profitability is a solid achievement in the face of cost and competitive pressures in the current economic environment. The company remains conservatively geared at 36.7 per cent and maintains adequate cash reserves and undrawn bank facilities to meet its expected working capital and Capex requirements for the foreseeable future.”
Since taking possession of the Carter Holt Harvey (CHH) folding carton assets in Australia and New Zealand in March 2011, Colorpak has worked methodically to integrate and consolidate the businesses into one coherent operation. Since then there has been a rationalisation of operations in Victoria, the development of new company branding for Colorpak, and alignment of systems, operational practices, business disciplines and cultures.
“Whilst the upfront financial impacts of the CHH integration have been significant, they are in line with our expectations. Long run cost efficiencies have been implemented including the rationalisation of the manufacturing footprint in Victoria and the commencement of a similar process in NSW announced on June 18, 2012.”
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