Cost containment pays off for Mpact

PACKAGING group Mpact said on Wednesday that its full-year results reflected a strong improvement in its plastics business as a result of good volume growth and cost containment.

In the year to December 31 2015, Mpact reported diluted headline earnings per share (HEPS) of 362.2c from 260.5c in the year-earlier period. Revenue was 10.8% higher at R9.5bn while underlying operating profit increased by 21% to R909m compared with the previous year.

The company declared a gross final cash dividend of 80c per ordinary share.

Mpact has operations in SA, Namibia, Mozambique, Botswana and Zimbabwe. SA-based customers accounted for about 90% of Mpact’s sales for the current year, with the balance of sales predominantly to customers in the rest of Africa.

The group said it remained difficult to predict developments in the South African economy in the year ahead.

“Suffice to say that we share the belief that the economic turbulence in which the group operates, possibly exacerbated by the effects of drought, will not abate.”

Mpact said investments in its recycling and corrugated businesses would advance its growth prospects.

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