Directors described this as a solid performance given the current turmoil in local and global economies. Unless there is a significant deterioration in trading conditions, then directors believe that the company can achieve at least the same level of profitability as last year.

In brief, the result for the half ending 31 December 2008 was:

Dividend

Directors have declared a fully franked interim dividend of 1.25 cents per share which will be paid on 1 April 2009. This is in line with last year’s interim dividend.

Commentary

Managing Director, Alex Commins, said Colorpak had achieved a record first half NPAT as a result of slightly stronger sales, tight cost controls and careful attention to quality and productivity.

“Operations were excellent – we achieved consistent delivery times and continued our superior quality and innovative packaging solutions for our customers,” said Mr. Commins.

“We expect the beverage sector to continue its resilience, particularly given the hot summer experienced on the eastern seaboard. And the pharmaceutical sector trades on despite the cycle – people still need medicine.”

“We also benefited from strong cash flows, well up on the prior comparable period. This was achieved due to a significant improvement in working capital, enabling a further $1.8 million reduction in net debt since June 2008 to $27.7 million. Debt to Debt+Equity has now improved to 33.7%.”

“Net capital expenditure in the first half totalled $4.2 million as a result of the acquisition of a new press and cutting machine for the Sydney operation,” he said.

Mr. Commins listed the year’s highlights as:

• Enhanced productivity and increased capacity at the Regents Park facility (NSW) through a newly installed printing and die cutting line.
• Achievement of ISO 14001, the international environmental management standard for organisations engaged in manufacturing and services
• The first specialist folding cartons business in Australia to receive ‘Chain of Custody certification’ from the Forest Stewardship Council and the Programme for the Endorsement of Forest Certification schemes
• The signing of a three-year Enterprise Bargaining Agreement for the Regents Park site following an earlier signing of a similar agreement at the Braeside (Vic) operations

Outlook

“Shareholders can be assured that we will be maintaining and enhancing the company’s disciplines that have underpinned our success to date,” said Mr. Commins.

“With reducing debt, ample headroom in our debt facilities and low capital expenditure requirements going forward, Colorpak is well positioned to ride out the worst of any potential softness in volumes. Cash flow will be tailored to debt reduction and we plan to allocate less than $1 million to capital expenditure in the 2nd half.”

“Our focus in the second half is to continue to provide our customers with solutions that will help them to maintain their competitive advantages,” said Mr. Commins.

“Unless there is a major deterioration in trading conditions then we believe that we can achieve at least the same result as in 2007/08,” said Mr. Commins.

For more information about Colorpak Limited, contact Alex Commins at (03) 9586 4720 or visit the website at www.colorpak.com.au.