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Orora shares surge as profit soars

AAP logoAAP 15/08/2016 Trevor Chappell

Orora shares surged more than 10 per cent after the packaging company lifted full-year profit by 28.3 per cent and predicted increased earnings for the year ahead.

Net profit for the 12 months to June 30 was to $168.6 million, up from $131.4 million a year earlier, boosted by organic growth, acquisitions in North America and the sale of land at Petrie in Queensland.

Orora said economic conditions were subdued and some costs were higher in Australia.

But the company's Australasian business generated higher pre-tax earnings thanks in part to favourable growing seasons in some fruit and produce markets in Australia and New Zealand, and higher sales to the grocery sector in Australia.

Orora also sold more glass bottles as it gained a greater share of the beer market and improved volumes in the wine sector.

The glass business experienced increased demand from the wine sector in the wake of the lower Australian dollar.

The Australasian business also benefited from cost cuts and operational improvements at the B9 recycled paper mill at Botany in NSW.

Orora's North American operations benefited from favourable currency fluctuations and the recent acquisitions of Jakait, a supplier of packaging to the greenhouse produce sector, and IntegraColor, a Texas-based provider of point-of-purchase retail displays.

Orora said the integration of IntegraColor was progressing well, and the business was performing in line with expectations.

Orora chief executive Nigel Garrard said the year ahead looked positive.

"It is expected the group will continue to drive organic growth and invest in innovation and growth during FY17, with earnings expected to be higher than reported in FY16, subject to global economic conditions" Mr Garrard said.

Orora shares were 30 cents, or 10.87 per cent, higher at $3.06 at 1415 AEST.

ORORA BOOSTS REVENUE, PROFIT, DIVIDEND

* Annual profit up 28.3pc to $168.6m

* Sales revenue up 13pc to $3.85bn

* Final dividend up one cent to five cents per share, 30 per cent franked

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