Pact Group (PGH) rallies despite talking down earnings

Stock

Pact Group Holdings (PGH) $2.44 as at 27/06/2019

Event

Pact Group has rallied today despite guiding the market lower on earnings as the financial year draws to a close. PGH looks after a range of plastic and metal packaging for products in food & beverage, chemicals, agricultural industries among others.

Shares in PGH had traded down to all-time lows earlier this month on a combination of high input prices and debt concerns driving the price lower. In today’s announcement, Pact confirmed the softer earnings however maintained the guidance range expecting EBITDA “at the low end” of $230m to $245m. The market has taken a positive spin on it, with analyst consensus already sitting at $232m – and many in the market calling this conservative.

The other side of today’s rally has been driven by debt refinancing that has reduced the need for a capital raise. The company has secured $50m in unsecured funding for the next 6 years, while also extending $380m worth of loans by 2 years out to 2022.

Pact Group (PGH) Chart

Pact Group (PGH) Daily Chart

Market Matters Take/Outlook

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