Pact Group, whose shares have plunged 49% in the past year and a third since early February, has found a new CEO, hopefully, to lead the Melbourne based company out of the wilderness.
Former BlueScope Steel executive Sanjay Dayal was announced yesterday as the new CEO to revive Pact’s fortunes that were badly damaged by a high write down and other losses than collectively cost the company $320 million in the first half of 2018-19.
The company – which makes rigid plastic and metal packaging for groceries and produces cosmetics and cleaning products – said the appointment of Mr. Dayal as chief executive would be “invaluable as we execute the optimisation of our network”.
“Importantly for Pact, he has led and managed complex major integration and restructuring initiatives,” executive chairman Raphael Geminder said in a statement to the ASX on Thursday.
Besides the big loss from the writedowns, Pact’s underlying profit down by close to a third amid cost pressures and weaker demand for its products. Because of weak demand for its products, Pact has been unable to recover higher costs (such as for energy and resins) via price rises.
Competition for the limited business is simply too intense to allow cost recovery price rises.
The shares ended up 3.6%, at $2.76, and a long way from regaining the hundreds of millions in lost value in the past year which have seen the company lose almost half its value.
A year ago Pact was worth more than $1.8 billion – yesterday it was worth little more than $925 million
Mr. Dayal is currently the chief executive of building products, corporate strategy, and innovation at BlueScope, where he has worked for nine years after a decade-long stint at explosives and chemicals group Orica.
Mr. Geminder will revert to being chairman of Pact on April 3 when Mr. Dayal takes over.
Mr. Geminder, who owns 39% stake in Pact, took over the day-to-day running of the business last year when former chief executive Malcolm Bundey left suddenly as the financial performance deteriorated.
