By Andy Young
Packaging manufacturer Orora has announced a strong result for the half-year ended 31 December 2015, with net profit after tax up by 27 per cent.
Orora said its Australasia delivered a 4.5 per cent increase in earnings before interest and tax (EBIT).
Orora’s Managing Director and CEO, Mr Nigel Garrard, said: “Orora’s first-half results reflect a positive period for Orora in which the Group delivered on its objectives and produced strong underlying earnings growth, cash flow and increased returns. The results also include the profit on the sale of land at Petrie, Queensland.
"Operationally the Group delivered underlying EBIT growth of 15.6 per cent despite muted economic conditions in both Australasia and North America. This was driven primarily by benefits from Group wide business improvement and cost control programs, North American organic sales growth and the September 2015 acquisition in Ontario, Canada.
"Through sustained financial discipline, Orora has successfully converted this earnings growth into cash flow, which further bolstered the balance sheet and enabled the Group to deliver a 19 per cent increase in underlying EPS.
"An interim dividend of 4.5 cents per share, partially franked to 30 per cent has been declared, an increase of 29 per cent over the prior year. This represents a payout ratio of approximately 62 per cent of NPAT, which is within the indicated range.”
In the Beverage business, sales and earnings were in line with the prior year, with improved operating cost control across the business partially offset by the impact of higher gas costs in the Glass division.
Garrard added: “Orora is continuing to invest in customer-focused innovation to underpin future growth.
“In the six months since launching the $45 million Innovation Initiative, approximately $12 million has been committed to projects across the Group focused on delivering new innovative customer led product solutions, modernising equipment, improving processes and productivity.
“With the Glass business seeing increased future demand from the impact of a lower Australian dollar on wine customer volumes, both from export demand and repatriation of offshore bottling, management is in the final phase of assessing investment options to increase the capacity of our glass forming lines.
“In conjunction with targeting profitable organic and market share growth, Orora continues to actively pursue acquisition opportunities in preferred markets to enhance our geographic footprint and customised product capability.”