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On 1 April 2019, Asaleo Care Limited (ASX:AHY) notified the market about the selling of its $180 million Australian Consumer Tissue business to Solaris Pty Limited. AHY would retain its Australasian Personal Care and B2B operations, along with the Consumer Tissue business in New Zealand and the Pacific Islands.
AHY is into personal care and hygiene business. The company is a manufacturer, distributor and seller of Personal Care and Tissue products. It has thirteen manufacturing and distribution facilities across Australian, New Zealand and Fiji region.
Australia based Solaris Pty Limited is into manufacturing of tissues and concentrates on the markets, like Retail and Away-from-Home markets. Some of its products are paper towel and facial tissue etc. Two of its renowned tissue brands are LIVI® tissue and EMPORIA®.
As stated in ASX announcement, AHYâs Chief Executive Officer, Mr Sid Takla commented on the transaction, that the procedure of the sale would contribute mainly to strengthen the companyâs balance sheet, cause a reduction to the net debt and enhance its leverage ratio. Besides, the sale would allow the company to focus on its core, less capital-intensive businesses in the Personal Care segment, as well as Business to business section.
According to an ASX update on 6 December 2018, AHY had updated the market about the selling off its Australian Consumer Tissue Business to Solaris Paper Pty Ltd.
In its full-year report for the period ending 31 December 2018, the company recorded the Revenue from ordinary activities of $407,785,000, down by 1.8% from $415,392,000 in its previous corresponding period (pcp). The Net profit after tax for the period attributable to members stood at $108,679,000, down by 290.1% from $57,181,000 in pcp. The Basic earnings per share stood at 20.0 cents, down by 290.5% from 10.5 in pcp. The EBITDA was down by 35.1% to $80,626 from $124,287 in pcp.
During the year which ended on 31 December 2018, AHY made an investment in the development of the product, namely Sorbent for the enhancement of its strength, thickness etc. The company also prepared for installing converting equipment in Kawerau in 2019. The equipment aimed at the production of the enhanced quality of the product and augment the capacity of the new product. Also, the Treasures nappy manufactured at New Zealand facility centre saw an enhanced form of Treasureâs nappy design being launched. The enhanced nappy design had addressed the quality issues that it had been facing since its launch in 2017.
The stock of the company is currently trading at A$0.892 (as on 1 April 2019, 3:50 PM AEST), down by 0.335%. The company has a market capitalization of around A$486.09 million, with circa 543.12 million shares outstanding. Its 52-weeks high was noted at A$1.470, and the 52-weeks low was noted at A$0.620. In last one year, the stock had generated a negative return of 30.08%. However, in the last 6 months, the stock has generated a return of 21.77%.
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