Shares in Pact Group Holdings (ASX:PGH) have displayed the type of price action that suggests a turnaround is underway. Looking at the fundamentals though, there are some key aspects of the business that need to be addressed this reporting season.
This is getting to be a regular event for shareholders in Melbourne based packager, Pact Group - bad news sees a fall in the share price… its been happening now, off and on for the past couple of years.
The company has provided a tour of its Pascoe contract manufacturing acquisition and investment in RPC. Macquarie observes the tour provided greater detail regarding the company’s ability to deliver on the growth strategy in these areas.
First half results revealed organic EBITDA erosion offset the new acquisition. Credit Suisse also notes that management has indicated that prior period contract losses have now been fully absorbed and dairy industry volumes are bottoming.