Pro Pac Packaging : 26/08/16 Preliminary Final Report

PRO-PAC PACKAGING LIMITED (ASX: PPG) HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2016

• Profit after tax up 19% to $6.9 million

• Net cash from operating activities up 162% to $14.2m

• Earnings per share (EPS) up 16% to 3.01 cents

• Dividends per share of 2.75 cents, up 10%

Despite continued difficult general industry trading conditions, rising raw material input prices and adverse margin impacts from the significant downward movement in the A$/US$ exchange rate during the year, the business delivered a solid result for the 12 months to 30 June 2016.

Sales were down 1% on the prior year reflecting a sluggish Australian economy and competitive markets. As previously reported, demand from the manufacturing, distribution, resources and meat processing sectors was soft, particularly later in the first half and continued for the remainder of the financial year. However, the Company experienced good growth in the pharmaceutical, healthcare, retail and dairy sectors.

Despite hedging strategies, adverse forex movements due mainly to the ongoing decline of the AUD increased the cost of imported goods sold relative to the prior year, particularly during H1. Consequently, throughout the year the Company progressively increased prices to its customers to recover this cost increase. As a result, margins were maintained broadly in line with the prior year but sales volumes were adversely affected.

The maintenance of margins and the continued focus on cost out strategies yielded substantial savings in administration, distribution and selling expenses that enabled the Company to record a profit before tax of $10.1 million, an increase of 20% up on the prior year.

Rigid Division had an excellent year, with good top line growth and lower resin costs resulting in EBITDA increasing 18% on the prior year.

Industrial Division, which imports most of its products, was adversely affected by the declining AUD. As alluded to above, steps taken to stabilise margins within the division adversely effected sales which finished lower than the prior year. EBITDA for the division was however up 3% up on the prior year, largely due to effective cost control.

OUTLOOK

The Company expects the Australian economy and the Company's markets to remain subdued. Cost reduction initiatives and measures to stabilise margins will continue during FY17.

While FY16 was a year of consolidation, the Company has a current pipeline of acquisition opportunities which it is continuing to assess.

DIVIDEND

The Company has today declared a fully franked final dividend of 1.5 cents per share for H2 bringing the total dividend paid in respect of FY16 to 2.75 cents, up 10% on the prior year. The record date for determining entitlement to the dividend will be 8 September 2016 and the dividend will be paid on 22 September 2016. The Company's Dividend Reinvestment Plan will apply to this dividend. No discount will apply to the issue price.

Enquiries

For further information please contact Mr. Brandon Penn Acting CEO, Pro-Pac Packaging Limited on Tel [phone].

About PPG

Pro-Pac Packaging Limited is a diversified manufacturing and distribution company, providing innovative, flexible and rigid packaging solutions for a broad group of clients. PPG is headquartered in Sydney with a national footprint including operations in all mainland states. PPG's securities are listed and quoted on the ASX. For further information on PPG visit www.ppgaust.com.au.

Appendix 4E Preliminary Final Report Company details

Name of entity: Pro-Pac Packaging Limited

ABN: 36 112 971 874

Reporting period: For the year ended 30 June 2016

Previous period: For the year ended 30 June 2015

Results for announcement to the market

Revenue from ordinary activities

down

1% to

$000's 240,774

Profit from ordinary operations after tax attributable to

the owners of Pro-Pac Packaging Limited up

19% to

6,938

Profit for the year attributable to the owners of Pro-Pac

Packaging Limited up

19% to

6,938

Dividends

Amount per security Franked amount per security

Final dividend for the year ended 30 Jun 2015 paid on 24 September

cents cents

2015 1.5 1.5

Interim dividend the year ended 30 Jun 2016 paid on 19 May 2016 1.25 1.25

On 26 August 2016, the directors declared a fully franked final dividend of 1.5 cent per ordinary share with a record date of 8 September 2016 to be paid on 22 September 2016.

The Company's Dividend Reinvestment Plan will apply to this final dividend. No discount will apply to the issue price. Under the Plan, shareholders can acquire shares in the Company at the volume weighted sale price during the four trading days up to and including the Record Date for determining entitlements. The last date for

elections to participate in the Dividend Reinvestment Plan is 9 September 2016. During the year, 8,629,936 shares were issued under the Dividend Reinvestment Plan.

Net tangible assets

Consolidated Year Ended 30 June 16

Consolidated Year Ended 30 June 15

Cents Cents

Net tangible assets per ordinary security 16.41 15.68

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Control gained over entities

During the year, there was one minor acquisition by Pro-Pac Packaging (Aust) Pty Limited, a wholly owned subsidiary of Pro-Pac Packaging Limited.

Loss of control over entities

Not applicable.

Details of associates and joint venture entities

Not applicable.

Foreign entities

Details of origin of accounting standards used in compiling the report:

Pro-Pac Packaging Limited has a wholly owned subsidiary, PPG Services SDN BHD, which is a company incorporated in Malaysia. This company provides support services for all Group companies. The financial statements for this company are prepared under Malaysian Financial Reporting Standards, which are compliant with International Financial Reporting Standards.

Audit qualification or review

This report is based on financial statements which are in the process of being audited.

Attachments

Details of attachments (if any):

The consolidated preliminary financial statements of Pro-Pac Packaging Limited for the year ended 30 June 2016 are attached.

Signed

Ahmed Fahour Director Sydney

Date: 26 August 2016