Crate washing, pooling and new acquisition boost Pact Group shares

Andrew Stanley

Ralton Asset Management Limited

Shares in Pact Group (ASX:PGH) were boosted by two significant announcements during the June quarter both of which focused on ‘crate washing’, which involves end-to-end management of a customer’s container network. While the ‘pooling’ network is similar to Brambles (CHEP pallets), whereby PGH controls the logistics, maintenance, repair and resupply of new containers as crates are damaged or lost. Firstly, PGH announced a new agreement for crate wash and pooling services with an unnamed customer. The agreement remains subject to final approval between PGH and its customer, although once signed, we expect the scope of the deal to be material to PGH, requiring a reasonable amount of capital, and hence incremental returns. Secondly, PGH announced the acquisition of the Fruit Case Company (FCC), a NZ-based crate pooling and hire business for NZ$21m. Clearly, PGH is keen on growing its presence in crate pooling – it is clearly within its manufacturing capability but also adds an annuity-style income stream as PGH is managing a network. PGH expects the FCC acquisition will meet its 20% investment hurdle (ROI) by year three. (VIEW LINK)

1 stock mentioned

Andrew Stanley
Andrew Stanley
Head of Australian Equities
Ralton Asset Management Limited

Andrew has been with Ralton since its inception in 2006 and leads the investment management of Ralton’s managed accounts. He brings over 25 years of funds management and investment banking experience having held senior positions with major...


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment