Amcor (AMC) has reported a solid 1H result.

Key takeaways

  • 1H EPS $0.358 vs $0.360 expected, and +9% pcp
  • Sales +12%, slightly ahead of consensus, reflecting price increases to offset rising input costs
  • Buyback program increased by an additional $200m
  • Guidance maintained

For us, the key is that AMC are managing supply chain disruptions relatively well, with material cost recovery through higher prices, a pleasing outcome particularly in light of the ANN trading update earlier in the week.

Those price rises are effectively raw material pass-throughs, which is why AMC is often regarded as a good quality defensive with regard to inflation.

The pass-throughs generally operate on a quarterly in arrears basis, as such we regard the very modest group margin decline (11%, vs 12% prior) as a solid result, with further offsets to come over the 2H.

Overall, a solid result, with AMC performing well in a very challenging environment. Happy holders.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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