Pact Group
About the author:
- Author name:
- By Belinda Moore
- Job title:
- Senior Analyst
- Date posted:
- 18 July 2014, 8:52 AM
- Sectors Covered:
- Agriculture, Food & Beverage, Travel and Chemicals
Pact Group Holdings (PGH) continues to win awards for its innovative packaging and manufacturing excellence. This focus on innovation and technology is, in our view, a competitive advantage leading to stickier customers, increased sales and higher margins.
LightProof brand
Pact Group's high density polyethylene milk bottle design (LightProof) was judged best product from New Zealand at the World Tour by Sial product awards. The LightProof product preserves milk and cream's nutritional value and taste for longer by protecting the bottles' contents from sunlight and retailers' refrigerator lights. Fonterra Co-operative Group has been using the product since April 2013. Pact Group's LightProof brand bottles will now compete against other global products for major awards at the annual Sial exhibition in Paris in October.
Good Design Australia also awarded the bottles a good design selection award in the packaging and graphics category of its annual awards.
Fonterra was a finalist in the best dairy packaging innovation category in the 2014 World Dairy Innovation Awards for the Pack Group designed bottles.
Australian Manufacturing Team of the Year
Pact Group recently won the Australian Manufacturing Team of the Year in Acquisition International Magazine's 2014 Business Excellence Awards. Pact management said that "we believe that this has been achieved through our rigorous focus on results and the implementation of our company values".
The next results update
PGH will provide its FY14 result in late August, and we expect the company will achieve its FY14 prospectus numbers. PGH will pay a final dividend of 9.5 cps (65% franked given the company has overseas operations).
In our view, PGH is trading at an unwarranted discount to its peers and we reiterate our Add recommendation and A$4.31 price target. We expect the share price to move closer to this target as the company delivers on its prospectus forecasts and there is more clarity on the acquisition of Dynapak (Indonesia's leading packaging company).
More information
Morgans clients can access our detailed research on Pact Group Holdings (PGH). If you are interested in finding out more, please contact your nearest Morgans office.
Disclaimer(s): Analyst owns shares.
The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.