Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
In this morning's report whilst reviewing Amcor there was a comment made at the end "NB: This is not an encouraging read-through for our position in Orora (ORA) across two portfolios." My question is - can you please elaborate further on this comment. Thanks Geoff
Hi Geoff,
Back in 2013, Amcor (AMC) spun out their Australasian packaging and distribution business into a separate entity called Orora (ORA). The rationale for the spin off was to hive off the lower margin parts of the Amcor business that were weighing on the multiple being applied to the combined group. More recently, ORA has purchased Saverglass which is a high-end European bottle producer that we think will prove to be a solid acquisition, potentially company changing. Their history and similar businesses prompted that comment i.e. if we see downside for AMC, it is not a positive read though for ORA in the short term. That said, we like ORA more than AMC and we intend to hold the position, comfortable with our entry levels around current prices.
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