Colorpak Limited (ASX:CKL) FY13 results

Not too much as happened since we spoke last about Colorpak. The FY13 results came out last week and with a strong finish to the year, it came slightly ahead of what I was expecting.

FY13 ($000) FY12 ($000) Change
Revenue 171,676 191,661 -10.4%
EBITDA 18,206 16,735 8.8%
EBITDA % 10.6% 8.7%
NPBT 10,743 9,252 16.1%
NPAT 7,494 7,660 -2.2%
EPS (cps) 9.19 9.39 -2.1%

Revenues were down due to the cut of some unprofitable contracts and the loss of some customers. This was to be expected. However this was more than made up for with efficiency gains from the consolidation of operations, process improvements and re-negotiation of unfavourable contracts inherited from the Carter Holt Harvey (CHH) acquisition. As a result, the EBITDA margin was up and the underlying profit was up 16.1%. Overall EPS was down due to some once-off tax benefits in FY13.

For the next financial year, the company will be doing it's final plant rationalisation in Australia with the closure of the Mt Waverly plant in Victoria. This is expected to have an once off cost of $2.4m which will impact the reported earnings for FY14. But it will have an underlying benefit and an impressively quick payback period of less than 12 months.

Management is expecting flat sales but continued underlying growth from improved margins. Underlying earnings growth are expected for both FY14 and FY15.

Unexciting but predictable and management executing well to plan. Not many companies trading at a trailing P/E of 9 and staring down at earnings growth for the next two years at the moment.

There has also been speculation that with Amcor planned de-merger of its Australasia and Packaging Distribution (AAPD) business, there may be some corporate consolidation to follow.

CKL last traded at $0.82.

Disclosure: At the time of publishing I own shares in CKL.