Pact Group’s Underlying EBIT Rises 14.8% Ahead of Half-Year Results
Pact Group Holdings has responded to an ASX price query, confirming no undisclosed material information and previewing a modest earnings uplift for the half-year ending December 2024.
- No undisclosed information explaining recent share price rise
- Half-year revenue up 3.5%, underlying EBIT up 14.8%
- Underlying NPAT slightly down due to higher tax expense
- Sale of subsidiary Viscount Rotational Mouldings completed with $12.8m gain
- Company confirms compliance with ASX continuous disclosure rules
Context of the ASX Price Query
Pact Group Holdings Ltd (ASX: PGH), a key player in the Australian packaging manufacturing sector, recently faced an ASX price query following a notable increase in its share price from $0.81 to $0.995 within a short span. The ASX sought clarification on whether Pact Group was aware of any material, undisclosed information that could explain this trading activity.
Pact Group's Response and Earnings Preview
In its formal response dated 7 February 2025, Pact Group firmly stated it was not aware of any undisclosed information that would materially surprise the market. The company reaffirmed its commitment to transparency and compliance with Listing Rule 3.1. Importantly, Pact provided a preliminary snapshot of its half-year financial performance for the period ending 31 December 2024, ahead of the scheduled results release on 28 February 2025.
The figures indicate a 3.5% increase in revenue to A$929.5 million and a 14.8% rise in underlying EBIT to A$124 million compared to the prior corresponding period. These gains were attributed to higher sales volumes in select business units and ongoing cost savings from the Transformation Plan initiated earlier in FY24.
Profitability and Debt Position
Underlying NPAT, however, showed a slight decline from A$8.5 million to A$5.5 million, primarily due to an increased tax expense despite improved operating earnings and lower financing costs. Net debt rose by 10% to A$470.8 million, reflecting continued investment in capital assets.
Strategic Divestment and Market Implications
Adding to the financial narrative, Pact completed the sale of its wholly owned subsidiary, Viscount Rotational Mouldings Pty Ltd, for net cash consideration of A$21.2 million, generating a pre-tax gain of A$12.8 million. This gain is excluded from underlying earnings but will feature in reported NPAT, subject to audit review.
The company also confirmed it is not currently engaged in any material acquisition or divestment discussions, signaling a steady strategic stance amid market speculation.
Compliance and Market Confidence
Pact Group's clear affirmation of compliance with ASX continuous disclosure obligations and the absence of any hidden material information should reassure investors. The company’s proactive disclosure ahead of its half-year results release underscores its commitment to market integrity.
Bottom Line?
As Pact Group prepares to release its half-year results, investors will watch closely to see if the preliminary figures hold and how the recent subsidiary sale impacts future growth.
Questions in the middle?
- Will the final half-year results confirm the preliminary earnings outlook?
- How will the increased net debt affect Pact Group’s capital strategy going forward?
- Could the sale of Viscount Rotational Mouldings signal a shift in Pact’s portfolio focus?
