transcontinental diversifies into plastic packaging to offset printing declines
Capri is buying Capri Packaging as it is entering plastic packaging under a diversified strategy designed to offset the decline in its traditional printing business and advertising softness in the media sector. The Montreal-
Beijing-based printing company announces $133
Millions of acquisitions in the United StatesS. -
Capri posted net profit growth of nearly 10 per cent to $17 on Tuesday.
Despite the decline in revenue, there were still 2 million in the first quarter.
CEO Francois Olivier said the acquisition of Capri, offering plastic packaging for cheese and fresh pasta, diversify interstate Holdings and will increase revenue.
\"Printing is not a growth business, media is a transformation business,\" Olivier said after the company\'s annual general meeting . \".
\"Food packaging is developing, but there is no such thing as digital transformation, and it is growing every year.
\"Transcontinental is Canada\'s largest printer, publishing more than 30 magazines including Canadian Life and Elle Canada, as well as books and flyers.
It has a network of community newspapers in Québec and Atlantic provinces, as well as online portals such as AutoGo. ca and JobGo.
Ca, owner of Metro weekday in Montreal and co-
Owner of Halifax Metro station
The company also prints newspapers such as the Montreal newspaper and the San Francisco Chronicle according to the contract.
Cross the continent is also the leading doorto-
Door distributors of advertising materials, such as grocery store flyers in Canada, publisher in Quebec and target in other parts of the country.
Olivier said the company\'s printing expertise will help it succeed in the printing plastic packaging business by putting \"ink on plastic instead of paper and finishing the product.
\"The only thing we need to learn over the next few months and years is raw materials.
There is a big difference between paper and plastic.
\"As the Internet disrupts the business model, consumers use less paper, and other companies such as Domtar offer a variety of products.
Pulp and paper companies now produce diapers and adult incontinence products.
Olivier said Transcontinental could eventually make more acquisitions in the packaging business, noting that the market is fragmented between big and small companies.
\"We are not in a hurry to do so.
\"We want to learn this business,\" he later told analysts on the conference call . \".
Capri Packaging is a division of Schreiber food, a US$5-
Billions of employees
Its own dairy products located in Wis Green Bay.
According to the agreement, Interstate will acquire two factories in Clinton, Missouri.
The company has about 200 employees with an annual income of about $72 million.
Schreiber Foods Inc.
I already signed 10-
The annual agreement with Transcontinental to use Capri Packaging as a strategic supplier of its printed flexible packaging accounts for about 75 of Capri\'s total revenue.
Olivier said the company recently signed a contract to publish the Calgary Herald and The Vancouver Sun.
In the media sector, the advertising market has been weak for the past five years, but the situation should start to improve next year, Olivier said.
Also on Tuesday, across the mainland (TSX:TCL. A)
It was announced that it would increase its quarterly dividend by 10 cents to 16 cents per share and raise its annual dividend from 58 cents to 64 cents per share.
The company\'s revenue fell to $499.
$3 million, $525.
6 million in the same year
The first quarter was mainly due to weak advertising market.
Net profit for participating shareholders rose nearly ten per cent to $17.
$15 per share, 2 million or 22 cents.
The same period last year was $7 million or 20 cents, thanks to lower spending, but partially offset by higher income taxes compared to 2013.
The adjusted net profit remained stable at $26.
4 million, 34 cents per share, adjusted operating income of $43. 5 million.
The company attributed these results in part to changes in the company\'s cost structure and the positive impact of loonie on the USS. dollar.
Haran Posner, an RBC Capital Market analyst, said quarterly results across the continent were \"a bit soft\", but added that the acquisition of Capri Packaging met its goal of diversifying and using manufacturing experience.
Shares on the inter-continental exchange fell 53 cents or 3.
Toronto Stock Exchange on Tuesday.