Orora has come out strong with its half year results, with its net profit after tax increasing by 12.3 per cent, to $92.1m, on sales up 4.1 per cent to $1.97bn.
For EBIT the figures grew by 9.3 per cent to $149.6m. Orora has signed agreements to acquire two North American companies, The Garvey Group and Graphich Tech for $71m.
The company says these results came through improving group-wide operational efficiency and cost control initiatives, solid sales growth in Orora North America, from both Orora Packaging Solutions, and an on-target contribution from its point of purchase business bought last year, IntregraColor.
The result comes despite what the company says were average economic conditions and input cost headwinds, including escalating energy prices in Australia.
Nigel Garrard, CEO of Orora says, “This is a positive first half for Orora. We have delivered on our objective and delivered a strong result. Through continued financial discipline, Orora has been able to convert the growth in earnings into increased cash flow and improved returns, further strengthening the balance sheet and creating a strong platform from which to invest for future growth.”
[Related: Orora completes acquisition]
Orora Australasia EBIT increased by 3.3 per cent to $109m, this result came wuth $10m I earnngs growth but the cmpmany paid out an extra $7m in higher than expecte denegry costs.
Orora North America grew by 24.7 per cent in local currency EBIT to US$41.4m. This was driven by a 13.1 per cent growth in sales revenue to US$740m.
According to Orora, these acquisitions represent a multiple of 5.8 times of the last 12 month’s EBITDA. Orora has agreed to reimburse the vendors for recent growth capital investments totally US$5m. The acquisition is expected to be completed by the end of March.
Commenting on the new business in the US Garrard says, “The two acquisitions have a platform of a $300m sales base going forward. I am confident the company is well positioned to deliver for our shareholders. We expect earnings to be higher. The latest acquisitions are strategically important in growing the North American Point of Purchase business as they expand Orora’s coverage in the US, providing a national manufacturing and fulfilment footprint able to serve corporate customers across multiple locations.”
“Orora’s point of purchase business will now be generating approximately US$230m in revenue and will offer a value proposition in the US market, which we believe will be a compelling factor for customers seeking a full range of product and service requirements across multiple locations,” Garrard says.
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