MENU

Results in: Orora Ltd shares climb higher

In morning trade the Orora Ltd (ASX: ORA) share price has climbed 4% to $3.32 following the release of the packaging company’s half-year results.

Here are key takeaways from the release:

  • Half-year sales revenue increased 6.2% on the prior corresponding period to $2,097.8 million.
  • First-half EBITDA came in 10.7% higher at $227.3 million.
  • Net profit after tax before significant items was $105.7 million, up 14.8% on the prior corresponding period.
  • Earnings per share increased 14.7% to 8.8 cents.
  • Interim dividend of 20 cents per share has been declared, 20% higher than a year earlier.
  • Outlook: Constant currency earnings expected to be higher year-on-year.

Overall I felt this was a strong result from the Amcor Limited (ASX: AMC) spin-off and far better than its former parent company’s own result earlier this week.

Orora’s growth was balanced across the company with both its Australasian and North American operations putting in a solid six months.

Sales revenue in the Australasian segment rose 5% to $1,042.4 million, with earnings before interest and tax (EBIT) growing 11.1% to $121.1 million.

Its North American segment delivered sales revenue growth of 7.4% to $1,055.4 million or 11.1% in constant currency terms. EBIT in the segment increased 9.4% on the prior corresponding period to $60.3 million.

A key driver of this growth came from higher volumes in Glass thanks to increased demand in the wine market. Treasury Wine Estates Ltd (ASX: TWE) is believed to be a major customer of Orora and its recent success will no doubt be a bonus for its Glass business.

Elsewhere, the company benefited from higher volumes in Fibre as a result of an improved season in certain fresh produce sectors.

Pleasingly, its increased earnings were successfully converted into cash, with operating cash flow of $155.9 million in line with the first-half of FY 2017.

Looking ahead, management expects to continue to drive organic growth and invest in innovation and growth during FY 2018. Subject to global economic conditions, constant currency earnings are expected to be higher than in FY 2017.

Should you invest?

I think this result demonstrates why Orora is regarded by many as the best packaging company on the Australian share market.

At the current share price Orora’s shares are changing hands at approximately 18x annualised earnings.

While I don’t think this is excessive based on the growth it exhibited in the first-half, I am slightly concerned by its soft outlook for the remainder of FY 2018. In light of this, I would class Orora as a hold.

And although I may class Orora as a hold, these top growth shares are definitely strong buys right now in my opinion.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. 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 Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!