Rigid plastic manufacturer and packager Bowler Metcalf reported lower revenue for the six months to December as suppressed market conditions, supply chain issues and stock shortages weighed on business activity, coupled with cost pressures.
In its unaudited results, it reported revenue was down 4% to R316.6m in the half-year as its plastic packaging and related products segment took a knock in the uncertain economic environment.
Profit from operations also dropped, by 15% to R51.2m compared with the same period in 2020.
CEO Friedel Sass was at pains to outline that disruption in numerous supply chains, force majeure declarations, numerous and significant stock shortages, rocketing raw material prices, robberies and random load-shedding challenged even its seasoned and experienced operation teams.
“Brittle, anxious, non-linear and incomprehensible (Bani) aptly acronymises the past month’s challenges of the Bowler supply chain environment, both up and downstream right to the consumer’s front door,” said Sass.
He said riot and economic uncertainties dramatically affected demand that gradually recovered by December.
Cost pressures are likely to continue, Sass said.
Listed on the JSE in 1987, the Cape Town-based company manufactures and sells rigid plastic packaging for the toiletry, cosmetic, household, pharmaceutical, and food markets in SA.
The company, valued at R838m on the JSE, reported cash reductions due to a combination of increased working capital requirements, capital expenditure on property, plant and equipment and additional cash resources allocated to higher-yielding income funds.
Bowler Plastics proposed last year to acquire Skye Plastics, which specialises in product and mould design, accelerating the expansion of Bowler Plastics into the medical and agricultural packaging sectors.
Sass said operations remain focused on cost containment. The relocation of the blowing plant into the modern and enlarged Philippi site was completed on schedule.
Headline earnings is forecast to come in 12% lower 59.37c compared with the same period in 2020.
The company declared an interim gross cash dividend of 19.40c per share for the six months to December 31 2021. It will be paid out to investors on March 28.
Bowler Metcalf had already paid a special cash dividend of 84c per share to shareholders in January from historical profits, up from last year’s total dividends per share of 51c, paying out 40% of its profit last year.
Major shareholders of the business include Kagiso and Old Mutual.
Despite tough trading conditions under the pandemic, shareholders on November 8 2021 voted to re-elect numerous directors, with 75.42% voting in favour and 24.58% against the implementation report of the remuneration policy.
Total annual CEO compensation was reported as R4.8m for the year to June 2021, an 18% increase from the year before.
Bowler Metcalf’s share price was up 1.4% on Tuesday closing trade at R10.85, having dropped 6.96% over the past seven days’ trade.
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