Shares of global packaging giant, Amcor Limited (ASX: AMC), jumped 4% following the release of its annual report early this morning.
In the year to 30 June 2015, Amcor reported a 3.5% fall in revenues, to $US9.61 billion, but a profit after tax of $US680.3 million, up 35.3% over the prior corresponding period.
However, excluding the effect of the demerger of Orora Limited (ASX: ORA), Amcor's profit would be $US502 million.
"Earnings per share, on a constant currency basis increased 7.5% and the dividend, in Australian dollar terms, increased 23% to 53 cents," Amcor CEO, Ron Delia, said.
While the payment is lower year-over-year in US dollar terms, Amcor will pay a final dividend of US21 cents to shareholders. The record date for entitlement will be 9 September 2015.
During the year, Amcor made a number of acquisitions in emerging markets such as Brazil, South Africa, China and India.
"Amcor has a strong foundation to build on, and an excellent track record of ongoing improvement," Mr Delia said.
The company's Rigid Plastics division was the best-performing business line during the period, with divisional profit climbing 7.7%. "The Rigid Plastics business had a strong year with earnings up 8% and returns at a record 20%," Mr Delia added.
Outlook
In constant currency terms, Amcor expects to generate higher profits in the coming year.
Are Amcor shares a buy?
Based on today's share price, Amcor shares trade on a dividend yield of 4% and a price-earnings ratio of roughly 17x. While above the market's average valuation, given the likelihood of growth in both dividends and profits per share (as well as the benefit from foreign currency exposure), Amcor shares could be worthy of a closer inspection for long-term focused investors.
