Amcor Announces Dividend For March 2019 Quarter Prior To Completion Of Bemis Transaction

Amcor Announces Dividend For March 2019 Quarter Prior To Completion Of Bemis Transaction

The Amcor Limited (ASX: AMC) today announced a pro-rata Fiscal 2019 final dividend of US12.0 cents per share for the March 2019 quarter.

This unfranked dividend would reportedly be paid to the shareholders present on the company’s registry as on the record date of 29 April 2019. The payment date has been fixed to 13 May 2019 with the Ex-dividend date of 26 April 2019. Amcor told that the dividend reinvestment plan would be suspended in relation to the payment of this pro-rata FY19 final dividend.

The company further stated that the merged group of Amcor and Bemis, New Amcor, would declare its inaugural dividend for the June 2019 quarter after the Bemis transaction has completed. As stated earlier, Bemis transaction is anticipated to complete on 15 May 2019.

Amcor has recently received the antitrust clearance from Brazil Government to close its all-stock transaction with Bemis in order to become the global leader in consumer packaging. Under this transaction, Amcor will takeover NYSE-listed Bemis Company, Inc. at US$6.8 billion via a consideration of 5.1 Amcor shares for each Bemis share. This would lead to the shareholding of 71% to be held by Amcor and the remaining 29% by Bemis in the combined group, ‘New Amcor’.

The pro-rata final dividend follows the dividend announced by Bemis with respect to its normal quarterly cash dividend to be paid to Bemis shareholders prior to the combination of the two companies, as agreed in the Transaction Agreement.

Amcor stated that 100% of the dividend is sourced from the Conduit Foreign Income Account.

Outlook:

The merger transaction is stated to be EPS accretive withy run-rate cost synergies estimated to US$180 million. It is further expected to result in an EBITDA of US$2.2 billion, annual cash flow after capital expenditure of over US$1 billion and revenues of US$13 billion.

In the 1H19 report, Amcor stated that in constant currency terms, the Flexibles segment is expected to deliver solid PBIT growth in the 2018/19 financial year, compared with PBIT of USD 835.1 million achieved in the 2017/18 year.

For Rigid Plastics segment, the company expects to deliver solid underlying PBIT growth in Fiscal 2019 on the back of modest organic growth, net benefit from prior period acquisitions of approximately USD 5 million to USD 10 million after deducting costs to integrate and achieve synergies and about USD 5 million to USD 10 million of benefits from restructuring initiatives.

Further, Amcor’s guidance for Fiscal 2019 highlights net interest costs, expected to be between USD 200 million and USD 210 million, in constant currency terms. The effective tax rate is expected to be between 17% and 18%. Cash tax payments are expected to be between 85% and 95% of the profit and loss charge. Free cash flow, which is after deducting capital expenditure and dividend payments, is expected to be between USD 200 million to USD 300 million.

AMC last traded at $15.380 on 18 April 2019.


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