Friday Nov 15, 2024
Friday Nov 15, 2024
Tuesday, 7 September 2021 02:04 - - {{hitsCtrl.values.hits}}
ACME Printing and Packaging PLC said yesterday that multiple external factors were making it difficult for the company to operate profitably, as they called for an infusion of funds.
In a filing to the Colombo Stock Exchange, the company said the company has a high level of interest-bearing debt as reflected in the financial statements for 30 June 2021.
“Increasing raw material prices, the difficulty in importing raw materials and the constraints on working capital are making it difficult for the company to operate profitably without an injection of funds,” it said.
The company is currently looking for investments into the company and/or its fully owned subsidiary, Acme Packaging Solutions Ltd., as well as exploring other options such as to dispose/sell assets to raise money for working capital and reduction of debt.
ACME’s share price gained by Rs. 1.20, or 13.6%, to Rs. 10. Company analysts welcomed ACME’s proactive disclosure.
Clovis Company Ltd. owns a 27% stake and Richardson Holdings owns a 19.4% stake in ACME, which has 1,739 shareholders with a public float of 49%.
Though ACME saw 19% growth in Group revenue to Rs. 337.9 million in 1Q of FY22, cost of sales rose by 23%, leading to gross profit of Rs. 3.6 million, down by 66% from a year earlier. Loss from operations rose by 182% to Rs. 37.7 million and loss before taxation was Rs. 70 million, as against a Rs. 48 million loss in 1QFY21. Accumulated loss at ACME stood at Rs. 915.4 million as of 30 June 2021. It had non-current liabilities of Rs. 83.4 million and current liabilities were Rs. 1.26 billion.
In FT21, Group revenue increased by 18% and the gross profit margin improved from 5.8% to 8.7%. However, the Group reported a loss of Rs. 100.6 million before tax and a loss of Rs. 97.9 million in the company compared to Rs. 183 million loss and Rs. 100 million loss respectively in the preceding year.
The results of the Group were unexpectedly impacted by the increase in the cost of imported raw material due to shortages in the international market, as well as due to high shipping charges across the globe as a result of supply chain disruptions. Depreciation of the rupee also contributed to the escalation of the cost of raw material. ACME was able to pass only a fraction of the increase to the customers due to the price competitiveness in the market.
