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