Amcor bullish on new look to bolster growth
Amcor is counting on a restructure to boost the earnings of its Australasian and packaging distribution business, which will be spun off into a separate listed entity by the end of the year.
The company, which reported an 8.6 per cent rise in underlying profit for the year to June, said the division was well placed to reap between $30 million and $40 million in cost savings for the current financial year, and $81 million over three years. The savings would come from plant closures, a new paper machine and exiting certain markets.
The company said earlier this month it would demerge the $2 billion business and form a separate listed entity, AAPD.
Chief executive Ken MacKenzie said the restructure would underpin growth in the new business, which will focus on supply and distribution of glass bottles, beverage cans and cardboard packaging in Australia and the US. "Over the next few years, we expect an $81 million cost reduction to be delivered by the business, and that's an important value driver," he said.
Amcor, the world's biggest packaging company, reported full-year net profit of $689.5 million, excluding significant items. It posted a final dividend of 20.5¢ a share, to be paid on September 6.
Mr MacKenzie said the company was on track to deliver continued earnings growth.
"Each of the business segments is expecting to deliver increased earnings in the current year and the strong cash-flow generation will ensure there is the opportunity to deliver further growth in shareholder value," he said.
He said the company would continue to push into emerging markets as conditions in the US, Australia and Europe remained subdued.
"We have expanded our exposure to these markets over the past 12 months through new capital projects and acquisitions."