Packaging specialist attributes growth to strong midterm trading period
28 July 2024 - 18:55
by Michelle Gumede
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The shares of Bowler Metcalf rose to their highest level in two and a half years on Friday after the packaging specialist advised shareholders to anticipate an up to two-thirds jump in earnings for the year ended June, thanks to increases in packing volumes.
Headline earnings per share (heps), a common profit measure in SA that excludes certain items, were set to rise between 42.5% and 62.5% to as much as 167.3c, the small-cap group said in a short trading update on Friday, while earnings per share could rise as much as 67.8%.
The rigid plastic manufacturer and packager attributed upward growth to a strong midterm trading period which yielded volume increases in the packaging segment.
It said increased capacity utilisation in its packaging unit had allowed it to benefit from economies of scale in both its factory and distribution areas, which helped offset the costs of planned maintenance expenses in its property division.
The market welcomed the news and Bowler shares closed 11.21% higher at R12.40 on Friday, the highest since December 2021 when it touched the R13 mark.
Listed on the JSE in 1987, the Cape Town-based firm manufactures and sells rigid plastic packaging for SA’s toiletry, cosmetic, household, pharmaceutical and food markets.
The packaging specialist flagged the anticipated rise in profits as it continues to recover from the negative effects of the Covid-19 pandemic, lower activity and high cost pressures for energy, transport and raw materials.
SA’s unstable power supply also hampered its energy-intensive plastic conversion activities, forcing Bowler’s management teams to build initiatives that integrated investments in intelligent energy management systems with suitable labour structures and smart production procedures.
This included pursuing an energy supply solution that incorporates a mix of municipal curtailment agreements and additional generating capacity alongside solar and storage solutions.
Despite taking hits over the previous two financial years, Bowler Metcalf has continued to distribute dividends to its investors, until returning to profitability in the six months to the end of December. Results for the year ended June are expected on September 10.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Packing volumes boost Bowler Metcalf profits
Packaging specialist attributes growth to strong midterm trading period
The shares of Bowler Metcalf rose to their highest level in two and a half years on Friday after the packaging specialist advised shareholders to anticipate an up to two-thirds jump in earnings for the year ended June, thanks to increases in packing volumes.
Headline earnings per share (heps), a common profit measure in SA that excludes certain items, were set to rise between 42.5% and 62.5% to as much as 167.3c, the small-cap group said in a short trading update on Friday, while earnings per share could rise as much as 67.8%.
The rigid plastic manufacturer and packager attributed upward growth to a strong midterm trading period which yielded volume increases in the packaging segment.
It said increased capacity utilisation in its packaging unit had allowed it to benefit from economies of scale in both its factory and distribution areas, which helped offset the costs of planned maintenance expenses in its property division.
The market welcomed the news and Bowler shares closed 11.21% higher at R12.40 on Friday, the highest since December 2021 when it touched the R13 mark.
Listed on the JSE in 1987, the Cape Town-based firm manufactures and sells rigid plastic packaging for SA’s toiletry, cosmetic, household, pharmaceutical and food markets.
The packaging specialist flagged the anticipated rise in profits as it continues to recover from the negative effects of the Covid-19 pandemic, lower activity and high cost pressures for energy, transport and raw materials.
SA’s unstable power supply also hampered its energy-intensive plastic conversion activities, forcing Bowler’s management teams to build initiatives that integrated investments in intelligent energy management systems with suitable labour structures and smart production procedures.
This included pursuing an energy supply solution that incorporates a mix of municipal curtailment agreements and additional generating capacity alongside solar and storage solutions.
Despite taking hits over the previous two financial years, Bowler Metcalf has continued to distribute dividends to its investors, until returning to profitability in the six months to the end of December. Results for the year ended June are expected on September 10.
gumedemi@businesslive.co.za
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