Even well-managed companies with the best plans can hit a tough spot. It’s a fate that has struck Mpact. The packaging group came unstuck in its year to December. Sharp raw material input price increases, increased market competition and start-up problems at a new recycling facility were among factors that sent headline EPS (HEPS) diving 33% and precipitated a 13.6% dividend cut. Following two years during which HEPS jumped 71% in total it was a big setback for Mpact. Since its unbundling by Mondi in July 2012, its share price trebled in less than four years. Having peaked in April 2016, the share price has since all but halved. The biggest profit damage in 2016 was caused by Mpact’s core paper division, which accounts for about 75% of group revenue and 85% of operating profit. Faced by growing competition from three significant unlisted rivals, Corruseal, Golden Era and Neopak, Mpact’s paper division’s revenue growth came in 5.2% up at R7.4bn. Growth would have been even lower if n...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.