Pro-Pac hits investors with profit downgrade

About Latest Posts Motley Fool StaffThe articles listed on this page are compiled by our team of Foolish Writers and …

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Pro-Pac Packaging Limited (ASX: PPG) share price will be in focus this morning after the packaging business warned that soft trading conditions over the six months to 30 June 2019 have adversely affected revenues and margins. As a result it now expects FY19 EBITDA before significant items to be around $28 million. This compares to $16.1 million in FY18.

However, investors should note these numbers are before one-off costs, with the company booking huge write downs over the first half of the financial year that took it to a statutory net loss of $144.3 million. Pre-tax operating profit before significant items came in at $9.3 million for the first half of the financial year.

Pro-Pac has also completed the acquisitions of Polypak Plastics Limited for $6.3 million and Perfection Packaging Unit Trust for $49.3 million over the period. As at 31 December 2019, the group's balance sheet gearing stood at 3.4x.

Other leading packaging businesses on the S&P/ASX 200 (INDEXASX: XJO) such as AMCOR PLC/IDR UNRESTR (ASX: AMC) or Pact Group Holdings Ltd (ASX: PGH) may also come into focus for investors today on the back of Pro-Pac's profit warning. 

For a stock that's on an entirely different trajectory, check out this little-known ASX company set to profit of the coming marijuana boom…

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »