The Amcor Limited (ASX: AMC) share price has edged higher today after the packaging company released its full-year results.
At the time of writing Amcor's shares are up 0.5% to $16.07, bringing their year-to-date return to almost 8%.
Key takeaways from today's result include:
- Sales revenue down 3.4% to US$9.1 billion.
- EBITDA up 2.7% to US$1,447 million (4.2% in constant currency)
- Profit after tax up 4.5% to US$701.2 million (6.7% in constant currency)
- Earnings per share of 60.6 US cents.
- Annual dividend per share increased to 43 U.S. cents.
Overall I felt this was a solid result from the packaging company and can't say I'm too surprised to see its shares edge higher.
A strong performance from its Flexibles business was the driver of the solid result. Segment profit before tax rose 6.5% to US$804.7 million, more than offsetting a 2.8% decline in profit before tax from its Rigid Plastics business.
According to management, the Flexibles business benefitted from acquisitions and restructuring initiatives along with modest organic growth.
Pleasingly, management expects the segment to deliver strong constant currency growth in FY 2018. This is expected to come from incremental restructuring benefits, net synergy benefits, and modest organic growth across the segment.
This is certainly good news for shareholders as the segment provides 74% of the company's profit before tax.
Should you invest?
Based on today's result Amcor's shares are changing hands at approximately 21x earnings. Whilst I do like the company, I think this is a touch on the expensive side given its current growth profile.
As a result, I would class it as a hold and suggest investors take a look at industry peer Orora Ltd (ASX: ORA) instead.
Although its shares are changing hands at 21x earnings as well, unlike Amcor, I believe its growth prospects justify the premium.
