Bowler Metcalf shows 45% growth in six months

Plastic packaging manufacturer and beverage bottler Bowler Metcalf reported a 45% growth in earnings for the six months to end of 2015.

Johannesburg - JSE-listed plastic packaging manufacturer and beverage bottler Bowler Metcalf reported a 45 percent growth in earnings to R44 million from R30.9m for the six months to end of 2015.

The group also saw its revenue jumping by 6 percent to R254.8m from R240.8m.

But the company’s share price traded lower on the JSE yesterday despite the positive news. It opened at R11.10 before extending the fall seen on Monday, to eventually close at R10.75 yesterday, down 3.15 percent.

The group has divided its business into two divisions: Bowler Plastics, which specialises in the manufacture of rigid plastic packaging for the toiletry, cosmetic, household, pharmaceutical and food markets; and Beverages, a division that manufactures and distributes carbonated soft drinks.

Group chief executive Friedrich Sass said despite the restructuring activities to implement the group’s realignment strategies, the business had posted a pleasing 45 percent earnings growth from continued operations, including profit from associates, on the back of a 6 percent revenue improvement.

In the plastic packaging unit attributable profit remained unchanged at R25.8m to the previous year.

Sass said the company was committed to the projects it had undertaken in the past.

Activity levels

“The capital expenditure of R52.8m committed during this period to signed contracts illustrates the unprecedented activity levels. Additional new PET (polyethylene terephthalate) bottle manufacturing capacity was commissioned in Johannesburg with more projects to follow.

“The weakening of the rand did not have a substantial impact on the performance of the business during this period,” Sass said.

He added, however, that the group expected the negative cost impacts to be felt from 2016 onwards as the economy continues to slow down.

Sass said in the meantime Bowler Plastics was entrenching and expanding its premiere niche position in the rigid plastics packaging field.

The group said a good contribution by its newly formed associate company, SoftBev, contributed R14.5m in profits especially rewarding in the light of considerable challenges resulting from the merger of Quality Beverages 2000 with Shoreline Sales and Distribution.

Sass said the amalgamation of the KZN, Johannesburg and Cape Town businesses into a national unit was well achieved on various operational and reporting levels in time for the summer season.

The group declared an interim gross cash dividend of 18.4 cents per share for the six months, which will be paid from income reserves.

BUSINESS REPORT