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- Printing and packaging group Caxton has booked record revenue in its year to end-June, helped by new products and customers, as well as in part by load shedding.
- Load shedding weighed somewhat on fast-moving consumer goods, but did boost takeaways, and Caxton is up-sizing its footprint in the beverage container market.
- But although its confident about its strong cash position, it is expecting a difficult environment in its 2024 year due to pressure on consumers.
- For more financial news, go to the News24 Business front page.
Publishing and printing company Caxton says a strong packaging performance as well as advertising demand among liquor traders and grocers helped it generate record revenue in its year to end June.
Revenue grew by 16.6% to almost R7 billion on the back of price increases to recover the large raw material input cost increases and volume increases in the packaging business, the group said on Friday.
Volumes in the newspaper and commercial printing plants remained largely unchanged, but its national advertising grew by 7%, largely driven by grocery and liquor retailers.
Valued at about R3.6 billion on the JSE, Caxton generates just over half of its revenue from packaging and stationary, and just under half from publishing, printing and distribution.
The group’s varied packaging operations had another record year driven by approximately 28% increase in revenue, it said, reporting market share gains in existing customers as well new products.
Its folding carton divisions delivered double-digit volume growth, helped by increased levels of load shedding, which benefitted the quick-service-restaurant (QSR) market as consumers seem to prefer to buy takeaway meals as the solution to the inability for home cooking.
But some of this growth can also be attributed to new products and being able to secure volumes from an existing customer base, it said, more specifically cold cups, referring to cups often used in takeaways. The group added that it has also entered the coffee cup market and is confident of growing that sector.
The fast-moving consumer goods sectors showed no overall volume growth as certain customers were affected by load shedding, it said, but this was offset by growth in the agriculture market, some market share gains and new customers.
Caxton said it had also focused heavily on cost containment, with profit for the year jumping 38% to about R752 million. The group upped its final dividend 20% to 60c per ordinary share - about a R215.5 million payout.
It said its focus in the year ahead will be on cost containment but was fortunate to be in a strong cash position, which would enable it to consider acquisitions. It grew its cash by about 13% to R1.89 billion in the year, when forked out about R145 million on acquisitions, most of this for the Amcor Flexibles - which includes bag-in-a-box bladders. The company has said this is a natural fit with its operation that produces bag-in-a-box cartons - referring to beverage boxes.
It said on Friday:
"In the packaging markets we are fortunate to service those sectors that often are less affected, being the alcohol, QSR and cigarette sectors," the company added.
The group's shares were up marginally on Friday afternoon but have gained almost 7% on a one-year basis.
