Pro-Pac signals halt to M&A spree

Acquisition specialist Pro-Pac Packaging looks set to take a break from M&A activity after profits fell in 2012-13.

The Sydney-based group, which specialises in flexible and rigid packaging, bought 13 companies between October 2011 and June 2013.

"While the company will continue to assess synergistic and accretive acquisitions, focus for the first half of FY14 will be on reaping the benefits of the investments made in expanding and enhancing the company’s national capability and infrastructure and on maximising the opportunities presented by the recent acquisitions," said Pro-Pac.

Pro-Pac made eight acquisitions for the 12 months to 30 June 2013, with revenue growing 30.2% year-on-year to $173.1 million.

However, net profit fell 10.6% to $5.2 million, while profit margins declined from 4.3% to 3%.

"Despite the increased revenue, difficult trading conditions particularly over the final quarter of the financial year, combined with the impact of increased costs associated with the significantly enhanced infrastructure which was put in place during the financial year to cope with future anticipated growth, negatively impacted reported earnings," said Pro-Pac.

"The 2013 result included $1.7 million of relocation, restructuring and business combination costs relating predominantly to the integration of new acquisitions and the consolidation of the industrial division’s operations in Western Australia and New South Wales."

[Related: More M&A news]

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