The shares have more than halved in a year and the final dividend was cut, causing heartburn for 47pc stakeholder Raphael Geminder.
a 47 per cent stake in Pact. On paper, the value of his Pact stake has shrunk by about $390 million in the past 12 months.It is trading well below the $3.80 issue price of late 2013 when Pact listed on the ASX.in 2002 after Mr Geminder engineered the management buyout of several underperforming assets from the Pratt family’s Visy Industries. His wife, Fiona, is part of the Pratt family.
Pact imports resin, steel and chemicals from countries including the United States and China and has also been hit hard by soaring international shipping costs and higher freight costs.Pact on Wednesday announced write-downs and impairments in the contract manufacturing business of $68 million. The business also wrote off the value of $17.8 million in hand sanitiser inventory in the first half, and has completely exited from making that product.
Mr Dayal said the contract manufacturing division was not a natural fit for Pact, which is focusing on becoming a maker of recyclable packaging. But new management had been put in to engineer a turnaround, after which a renewed sale process was likely.One of the bright spots for Pact is an expected pick-up in orders from local councils for the group’s Sulo garbage bins used by households and emptied regularly in kerbside rubbish collections.
Orders for new bins were subdued by local councils looking to save money in the pandemic, but an increase by some councils in the number of household bins at each address augurs well for future demand.Mr Dayal was recruited in early 2019 to spearhead a turnaround after Pact suffered a string of profit downgrades after many of its factories in Australia and overseas were starved of investment under previous management.
writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Why 47pc of DIY super funds are having a great dayNearly half of self-managed super funds have exposure to mining giant BHP, analysis of the $892 billion SMSF sector has revealed, as the resources giant marks its second-biggest profit ever and a bumper dividend.
Read more »
Why businesses must not split on union dealsA key employer group has warned against big business splintering off to make side deals with unions on industrial relations ahead of the upcoming jobs and skills summit.
Read more »
Conservative bishops split from Anglican Church over same-sex marriageAustralia's Anglican Church splits, with a conservative group of bishops opposed to same-sex marriage forming a breakaway group.
Read more »
Steadfast Group raising $225m; JPM, UBS on ticketJPMorgan and UBS have launched a $225 million equity raising for Steadfast Group.
Read more »
Grocery prices in Great Britain rise 11.6% as inflation hits highest level since 2008Basics such as butter, milk and poultry show biggest increases in figures from market research group
Read more »