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.
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