This is generally a pleasing announcement. Trading conditions...

This is generally a pleasing announcement. Trading conditions for the industry have been very challenging, yet revenue is only slightly below the PCP, and unaudited Underlying EBITDA and unaudited Underlying EBIT are above the PCP.

Admittedly, I don’t tend to focus on EBITDA and EBIT, but we can only use the figures available until the full-year results.Pact continues to trade on a ~$290m market cap and the reported figures continue to highlight that the business is significantly undervalued.

As previously noted, H1 FY24 included $64m in capital expenditure, and the full benefits from these significant investments won’t be evident until FY25 and beyond:

• A new $50 million recycling facility came online in December 2023.
• A new HDPE resin recycling facility to be commissioned in calendar Q1 2024.
• A new Contract Manufacturing facility due to open in calendar H1 2024.

There has been a significant reduction in net debt (largely due to the crate transaction) from $699.0m to $507.0m as of 30 April. However, net debt at 31 December 2023 was $428.5m, and net debt at 30 June 2023 was $585.6m, so it’s very difficult to comment on the reported figures without seeing the balance sheet and cash flow statements.

It is positive to see that the cost savings program remains on track and that Pact continues to be actively recruiting for numerous roles.