# PGH - Pact Group Holdings



## System (16 December 2013)

Pact Group is a manufacturer of a wide range of packaging products with operations in Australia, New Zealand and Asia. 

Founded by in 2002, Pact has been transformed from a business with 15 manufacturing plants and $223 million of sales revenue in FY2003 to, on listing, a leader in the packaging industry with 62 manufacturing plants, over 4,200 customers, 22,000 SKUs and approximately 8 billion units produced annually generating pro forma forecast sales revenue of $1,197 million in FY2014.

http://pactgroup.com.au


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## SilverRanger (16 December 2013)

System said:


> Pact Group is a manufacturer of a wide range of packaging products with operations in Australia, New Zealand and Asia.
> 
> Founded by in 2002, Pact has been transformed from a business with 15 manufacturing plants and $223 million of sales revenue in FY2003 to, on listing, a leader in the packaging industry with 62 manufacturing plants, over 4,200 customers, 22,000 SKUs and approximately 8 billion units produced annually generating pro forma forecast sales revenue of $1,197 million in FY2014.
> 
> http://pactgroup.com.au




Looks like the packaging sector is havinga busy time with the PGH IPO and the AMC/ORA demerger. They are certainly going onto my watchlist


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## ROE (17 December 2013)

This one you get to buy cheaper than institution on market
This is another keeper I am in today on the drop woohoo -


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## McLovin (17 December 2013)

ROE said:


> This one you get to buy cheaper than institution on market
> This is another keeper I am in today on the drop woohoo -




Hmm...I'm intrigued ROE. What's the attraction here? Because on the face of it, the accounts don't look very healthy.


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## ROE (17 December 2013)

I like this sort of business, a bit more debt but it shouldn't be a problem like Collins Foods
Reliable revenue stream, reliable earner,  nothing Stella, will grow with economy and population
yield better than I get in the bank account.

and another Aussie Billionaire family business, to date I have not failed invest in the same business
as the Rich Aussie family ....they always deliver the result 

Down the track
this type of business scale will deliver better margin and cash flow
and that will go down well paying off debt ...


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## ROE (26 February 2014)

Result wasn't too crash hot, but that is ok Market may hate it a bit more and I may get a bit more as it beaten down...the curse of IPO 

I still like the long term out look.


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## ROE (25 February 2015)

Quiet achiever, as predicted good cash flow, decent earning, decent dividend
debt reduction is on the way, down 6.1%.
back to sleep for another year


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## galumay (25 February 2015)

ROE said:


> Quiet achiever, as predicted good cash flow, decent earning, decent dividend
> debt reduction is on the way, down 6.1%.
> back to sleep for another year




Mmmm...debt is still nearly 200% of equity, and interest coverage only 4.5, scary!


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## ROE (25 February 2015)

galumay said:


> Mmmm...debt is still nearly 200% of equity, and interest coverage only 4.5, scary!




understand the nature of this business and it not that scary at 4.5 times it beat most mining company earning at 3x times that coverage 

that why I got them cheap, most people too scare


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## ROE (26 August 2015)

what have we here 
profit before significant item up 42% after significant item up 17% and increase dividend .
Never under estimate these business, the reliable cash cow ALWAYS deliver


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## Votios (26 August 2015)

Hi ROE, are u not concerned about the drop of EPS? What do you think is the appropriate PE for this stock?


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## ROE (24 February 2016)

havent around here that often and when I do not that long, I am still holding this stocks and will be for a long time, steady as she goes as expected, good report as I said before this business should easily match inflation grow  and then some more.

In term of PE ratio and what price people pay I don't know each has their own criteria.
I bought them cheap and up a fair bit but I ain't selling any time soon.

another business I can rely on for un-interrupted dividend payment


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## ROE (27 June 2016)

I still  hold and haven't sold a single share if you want an update


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## galumay (27 June 2016)

One I missed out on ROE, I have never been able to get past the debt and interest coverage.


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## helpme (3 May 2017)

Anyone knows what the hell happened this morning? PGH is now 10% down. There is no substantial bad news recently. The latest news I found on ASX was this presentation which looks harmless.
http://www.asx.com.au/asxpdf/20170502/pdf/43hz5l104x5m0d.pdf

My heart is bleeding very painfully now. At least the brain wants to know why.

Usually, when a good stock dropped for no good reason, it is good time to buy. Did I miss out anything?


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## brisman (8 May 2017)

Slide 15 - The outlook for FY17 is weak/flat.


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## peter2 (13 May 2018)

A tempting chart for a break-out trader. There's a clear line of resistance at 5.80. 
The initial target is 7.00 which makes the reward 1.20. There's numerous levels to place an iSL. IMO the conservative one is 5.30. A RR > 2:1 is acceptable. 

However, the real interesting observation for me is the divergent volume indicators on the daily chart. I don't see this very often. The OBV is rising (accumulation, bullish) while the TMF is falling (distribution, bearish). 

I'll be watching to see what happens next.


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## rnr (14 May 2018)

peter2 said:


> A tempting chart for a break-out trader. There's a clear line of resistance at 5.80.
> The initial target is 7.00 which makes the reward 1.20. There's numerous levels to place an iSL. IMO the conservative one is 5.30. A RR > 2:1 is acceptable.
> 
> However, the real interesting observation for me is the divergent volume indicators on the daily chart. I don't see this very often. The OBV is rising (accumulation, bullish) while the TMF is falling (distribution, bearish).
> ...




Hi Peter,
Is the initial target of $7.00 a bit optimistic given the unfilled gap ranging from $7.23 - $6.69 in May 2017?
Rob


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## greggles (15 August 2018)

Pact Group Holdings smashed today after announcing disappointing FY18 financial results.






The PGH share price is currently at 36 month lows, down 15.82% from yesterday's close to $4.495.


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## barney (15 August 2018)

Ouch!!


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## galumay (15 August 2018)

One I looked at and gave it a miss, I tried to find a way to like it because @ROE had invested in the business and I always liked his style and analysis, but the debt just was a hurdle I couldn't get over.

Mind you, it was only a bit north of $4 when I decided not to buy in.

Maybe I should run my ruler over it again.

EDIT - Nup, I was right the first time!


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## peter2 (25 January 2019)

Price has formed a base and is now starting to go higher. 

The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread. 

Setup: Reversal, break-out of horizontal resistance   Grade A
Buy limit: 3.70, iSL 3.3, initial target 5.00


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## Miner (21 March 2019)

peter2 said:


> Price has formed a base and is now starting to go higher.
> 
> The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread.
> 
> ...



Hello @peter2  and other followers
Do you know or guessed what happens to PGH today ? Yes, it has incurred heavy losses but that was announced late February. Ralph Zeminder also invested couple of millions recently.
But without any announcment the priced has dived down more than 10% and probably would be more by COB ??


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## Miner (21 March 2019)

Miner said:


> Hello @peter2  and other followers
> Do you know or guessed what happens to PGH today ? Yes, it has incurred heavy losses but that was announced late February. Ralph Zeminder also invested couple of millions recently.
> But without any announcment the priced has dived down more than 10% and probably would be more by COB ??
> View attachment 93147



Unstoppable slide-home into plastic crate ??


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## peter2 (21 March 2019)

Thanks @Miner but I closed my trade in PGH after the first disappointing news in Feb19. I've learned to take the early loss (-0.6R) and to not let it get bigger.

It's been a volatile market with hits all over the place. The increase in volatility indicates that we're at a top just now and I'm anticipating a market dip soon.


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## Miner (22 March 2019)

peter2 said:


> Thanks @Miner but I closed my trade in PGH after the first disappointing news in Feb19. I've learned to take the early loss (-0.6R) and to not let it get bigger.
> 
> It's been a volatile market with hits all over the place. The increase in volatility indicates that we're at a top just now and I'm anticipating a market dip soon.
> 
> View attachment 93153



Hi Pete
For the holders, your analysis however disappointing, could be right.
I just read on Herald Sun, that the major share holder has shelved some $65 M worth shares through UBS at $2.50. He must have his reasons for market to bring down the price further
Regards


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## Trav. (28 July 2019)

PGH staging a nice recovery, looking for a close above $2.90 for BO then resistance @ $2.97 ( call it $3 )


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## Movendi (14 August 2019)

Shares of Pact Group Holdings Ltd fall as much as 17.6% to A$2.290, biggest intraday pct drop in a year 

Packaging product maker posts FY statutory net loss of A$289.6 mln ($196.78 mln) vs profit of A$74.5 mln a year earlier [nFWN25914G] 

Company expects EBITDA (before significant items) in FY20 to modestly improve 

Stock hits lowest since June 27 

About 2.4 mln shares change hands vs 30-day average volume of over 980,000 shares 

Stock biggest pct loser on S&P/ASX 200 index <.AXJO> 

** Shares have fallen 19.9% this year, as of last close vs 16.3% increase in Aussie benchmark index <.AXJO>


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## Trav. (14 August 2019)

good to revisit this. Failed to BO and as @Movendi highlights above market does not like loss. 

Support ?? well maybe $2.20 will hold


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## galumay (14 August 2019)

galumay said:


> EDIT - Nup, I was right the first time!




...aaand still right!


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## Miner (14 August 2019)

peter2 said:


> Thanks @peter2
> 
> It's been a volatile market with hits all over the place. The increase in volatility indicates that we're at a top just now and I'm anticipating a market dip soon.
> 
> [ATTACH=full]93153[/ATTACH]




With PGH result out, @peter2 you simply proved again that you have infra red camera which can see things much ahead cutting the cloud. Well done .


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## Smurf1976 (26 January 2020)

PGH closed at $2.92 on Friday, the day's high and the highest price since March 2019.

I don't hold this stock, just drawing it to the attention of those interested in it.


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## Trav. (26 January 2020)

Smurf1976 said:


> PGH closed at $2.92 on Friday, the day's high and the highest price since March 2019.
> 
> I don't hold this stock, just drawing it to the attention of those interested in it.




Good reminder @Smurf1976 - PGH found some support in late September @ $2.19 and has a couple of higher Lows showing a nice trend up to today's price of $2.92.

Can it break $3 this time ?


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## Trav. (8 February 2020)

Trav. said:


> Can it break $3 this time ?



Nope, failed to get past the $2.92 and all down hill from there. 

Closed $2.61 (~10% down from high) on Friday and SP looking very sick. Only good for a short trade from here.


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## galumay (8 February 2020)

galumay said:


> ...aaand still right!




ditto


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## Trav. (9 February 2020)

galumay said:


> ...aaand still right!



No doubt about it mate you were right


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## Dona Ferentes (7 March 2020)

> Pact Group Holdings Ltd (PGH) is a provider of specialty packaging solutions, servicing both consumer and industrial sectors. It is involved in manufacture and supply of rigid plastic and metal packaging, materials handling solutions, contract manufacturing services and recycling and sustainability services. The company has revenue segments in Australia, New Zealand and Asia




record lows, since listing.





...which is a reflection of pressures in the industry. Which is a sector where things have got to change.

Pact was a participant in a recent _*National Plastics Summit *_in Canberra, at which the company 







> _used [the occasion] to announce a $500m plan to invest in new and existing facilities for sustainable packaging, reuse and recycling. This builds on its earlier decision to partner with Cleanaway and brewing giant Asahi on a new recycling facility that will process almost a billion plastic bottles a year._



_



			However, so far plans such as those announce by Pact are few and far between. Pact’s executive general manager, Siobhan McCrory, [said] too many of the company’s peers have dragged their feet on real action. “We’ve seen a lot of talk; what we are really imploring of others now is to start to act." “We are finding that some of the brand owners are being quite slow to act against their own commitments. The big thing for us is to get action now.
		
Click to expand...


_Is this a good thing, or just being ahead of the curve, because when the consensus is: "_[a]rguably the biggest impediment to more plastic recycling is economic. Plastics are incredibly cheap and good at what they do_"?

When the conventional viewpoint, and where the political pressure will mount, is that as a community







> ... we have to address the price differential between plastic made from fossil fuels and plastic that is recycled. It’s just so cheap to produce fossil fuel-based plastic that even if you wanted to try and get recycling online, even with great waste collection systems in place, most of the recycling technologies and recycling companies aren’t in the money". “You have to address that price inequality that exists between these two products.”




The recycling challenge in Australia has become all the more pressing since China’s decision in early 2018 to stop taking Australia’s recyclable waste. Councils have been scrambling since then to come up with alternatives, and much of the waste carefully separated out by households has wound up as landfill.

Pact chairman Raphael Geminder believes this saga will be the wake-up call Australia needs to begin taking recycling seriously.







> “We are excellent at picking things up, we are pretty good at processing the material, but for a long period of time we’ve relied on export markets to take that material and value-add it,” he says. “The industry hasn’t really progressed because that’s been an easy out for Australia. The truth is, we’ve just simply taken our raw material, sent it off to Third World countries and prayed that it lands in the right hands and that it’s managed and recycled correctly.”


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## galumay (7 March 2020)

galumay said:


> ditto




ditto!


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## Dona Ferentes (14 October 2021)

shares in Melbourne packager *Pact Group* ended the day down 12.5% after the company surprised with news that a major asset sale has fallen over, thanks to the pandemic’s lingering effects.

Pact is controlled by Melbourne billionaire Raphael Geminder and the news that it had ceased the sales process of its Contract Manufacturing businesses came as a shock because investors had considered the deal as being ‘done.’

*But not so.* Pact said in the trading update said the division was suffering weaker demand and lower margins due to higher input costs while a number of its businesses were dealing with higher raw material and international freight costs.

So that seems to have made the business unsaleable for the moment.

The stock dropped more than 15% to a low of $2.90 after the announcement and struggled back to end at $3.10, off 10% for the day.



> “I have consistently advised shareholders we would sell the business if the sale process met our value hurdle. Continued market uncertainty and supply chain disruption arising from COVID-19 has created challenges in realising our expectation. At this time, we believe retaining the business delivers greatest value for our shareholders,” Pact’s CEO Sanjay Dayal said in Wednesday’s statement.




Pact says demand remained resilient in the Packaging & Sustainability and Materials Handling & Pooling segments for the first quarter, “with higher raw material and international freight costs well managed.”

Pact says the Contract Manufacturing segment demand was weaker than expected, impacted by COVID-19 lockdowns, and margins were lower due to higher input costs.

It will provide further trading update will be provided at the company’s AGM next month which has been put back two weeks to November 29.


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## Miner (25 December 2021)

Was debating to have ORA or PGH and did skimmed some info on PGH. DNH either of the two.

PGH has a large shareholder who is represented by a non-executive Chairman who has also put his own money - significantly. That makes the flow of exchange almost illiquid.
Vol of the transaction is rather low and I do not know how could the open trade was beneficial for ASX
PE is very low.
Insider purchase is very high compared to sell
https://cdn-api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4
https://cdn-api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4 - look at his three last purchases - volume and purchase prcice.


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## galumay (25 December 2021)

@Miner Its one I have looked at a couple of times, on most metrics I look at it certainly looks cheap, but the big problem for me is the debt is more than the equity, thats a big red flag for me. It is a business @ROE always liked and held, which was one of the reasons I looked at it pretty hard.

Edit - just looked back through my posts on PGH. Should have just posted "ditto" again!!


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## Miner (25 December 2021)

galumay said:


> @Miner Its one I have looked at a couple of times, on most metrics I look at it certainly looks cheap, but the big problem for me is the debt is more than the equity, thats a big red flag for me. It is a business @ROE always liked and held, which was one of the reasons I looked at it pretty hard.
> 
> Edit - just looked back through my posts on PGH. Should have just posted "ditto" again!!



Dear @galumay 
Merry Christmas.
Yes I noticed the big debt and agreed to have the same concern like yours.
However looking into Zeminder and Kin investment, get puzzled why they kept on putting their wealth instead of repaying the debt.
Either they are ignorant or know something which I don't read with the published numbers.
do not hold just part off my exploration.


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## galumay (25 December 2021)

Hey @Miner, same to you & yours. I guess with the cost of debt at the moment a lot of businesses figure its a magic pudding. 

A lot of investors a lot smarter than me reckon I am mad to worry about debt/equity and say that as long as the interest cover is reasonable then not to worry. Thing is I am not very smart, I have to keep my rules really simple and with a large margin of safety.


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## divs4ever (25 December 2021)

galumay said:


> Hey @Miner, same to you & yours. I guess with the cost of debt at the moment a lot of businesses figure its a magic pudding.
> 
> A lot of investors a lot smarter than me reckon I am mad to worry about debt/equity and say that as long as the interest cover is reasonable then not to worry. Thing is I am not very smart, I have to keep my rules really simple and with a large margin of safety.



   well i wonder about debt  when i ponder a stock purchase  , HOWEVER one tweak i have , is to consider if that  debt has been securitized ( used assets like property  as collateral for that loan )  lenders get nervous slower if they see  some industrial property as the consolation prize of a bad loan )

 being older than some members here  , i remember times when interest rates rose quickly , so i would consider you cautious  rather than 'mad'  ...

 now the balance of acceptable caution  vs.  the pursuit of profit/growth  is a very personal thing ( imo )


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## The Triangle (28 December 2022)

galumay said:


> @Miner Its one I have looked at a couple of times, on most metrics I look at it certainly looks cheap, but the big problem for me is the debt is more than the equity, thats a big red flag for me. It is a business @ROE always liked and held, which was one of the reasons I looked at it pretty hard.
> 
> Edit - just looked back through my posts on PGH. Should have just posted "ditto" again!!



Ditto?  Looks like PGH is now sitting on all-time lows.  At a share price of ~ $1

Market cap is about $350 million,
$660 million in long-term debt (And about $500 million in lease liabilities)
Net tangible assets are negative,
Forecasting: _EBIT in the range of $68 million to $73 million and Underlying NPAT in the range of $20 million to $25 million for the first half of FY23. _- Note they've probably had 5 straight years of underlying NPAT of greater than $70 million.
~$450 million in impairments since 2019
Major shareholder is also chairman controls ~ 50% of the company (having bought $8m more shares in September)
The noted target dividend is 40% of underlying NPAT, however that % is currently lower than that and they have said it will return to 40% when international markets return to normal.
There's usually a point at which these smaller caps are worth the risk, but not sure PGH is low enough yet for my liking.   They are looking at a substantial fall in forecast NPAT relative to the last 5 years and I am looking forward to the HY results to see exactly which costs have gone up or revenues down.   I thought most cost increases would have already been absorbed in FY22.  No doubt the interest expense on the debt would be hurting the profits.


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## galumay (28 December 2022)

"ditto", because I have been saying the same things about PGH for years! Still doesn't look anywhere near cheap enough to interest me. I agree with your summary.


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