What: International packaging giant Amcor Limited (ASX: AMC) delivered its impressive FY2014 report to the market earlier this morning.
Highlights:
- Profit after tax up 24.6% to $737 million
- Earnings per share up 24.7% to 61.1 cents, or up 9.2% on a constant-currency basis
- Returns (profit before interest and tax) on average funds were 19.4%
- Annual dividend increased by 26.5% to 43 cents (more than a 4.2% yield at today's prices)
- Amcor announced a switch to US-dollar reporting in June (commencing FY15) to reduce the impact of exchange rate movements – less than 5% of the company's earnings now come from AUD-denominated sales
- A number of packaging innovations that reduce costs throughout the supply chain
So What?
In addition to the highlights, a number of acquisitions and the demerger of Orora Ltd (ASX: ORA) throughout the year put the company on a good footing to deliver further growth going forwards.
Amcor stated in its report that it expects ongoing growth in developing markets while demand in developed economies will remain subdued. The company expects to grow most product lines, with overall earnings to increase next year.
Now What?
Amcor is a great long-term purchase particularly after its recent acquisitions, demergers and restructures.
Although blue-chip companies of its type are barely ever sold at a discount, at today's prices Amcor still pays a reasonable 4.3% dividend with considerable potential for growth.
Exposure to growing economies in Latin America and Asia – including the recent purchase of an Indonesian packaging business – is valuable beyond price, with those regions expected to be the fastest growing world economies over the next decade and beyond.
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