Pro-Pac Packaging reported a modest revenue increase to $62.8 million in Q4 FY25, secured a new $3 million loan facility from major shareholder Bennamon Ltd, and received a $3.5 million government grant for a recycling project facing delays.
- Q4 revenue rises slightly to $62.8 million
- Received final $3.5 million government grant for recycling plant
- Entered $3 million short-term loan facility with Bennamon Ltd
- Cash on hand stands at $3.8 million with $6.1 million unused facilities
- FY25 EBITDA loss of approximately $19.5 million; strategic review ongoing
Quarterly Financial Performance
Pro-Pac Packaging Limited (ASX – PPG) closed the June 2025 quarter with revenue of $62.8 million, a marginal increase of $0.3 million compared to the previous quarter. This steady performance reflects the company’s ongoing operations in flexible and specialty packaging segments across Australia and New Zealand.
Despite the slight revenue uptick, the company reported an EBITDA loss of approximately $19.5 million for the full fiscal year 2025, underscoring persistent profitability challenges. Operating cash flows remained positive for the quarter, supported by customer receipts and government grants.
Government Grant and Project Delays
During the quarter, Pro-Pac received the final $3.5 million installment from a Federal Government grant under the Modern Manufacturing Initiative. These funds are earmarked for establishing a soft plastic film recycling plant, a strategic sustainability initiative for the company.
However, the project faces delays due to regulatory and local council approvals, with the completion timeline currently uncertain. This regulatory hurdle highlights the complexities companies face when integrating environmental projects within manufacturing operations.
Financing and Liquidity Position
Pro-Pac strengthened its liquidity position by entering a new short-term financing facility of up to $3 million with Bennamon Ltd, its major shareholder. This facility, available until September 2026, complements existing financing arrangements, including debtor finance and asset finance facilities.
As of 30 June 2025, the company held $3.8 million in cash and had $6.1 million in undrawn financing facilities, providing a buffer amid ongoing operational and strategic challenges. The company’s total drawn debt stood at $45 million, with various secured and unsecured facilities in place.
Strategic Review and Outlook
Pro-Pac is conducting a strategic review aimed at improving profitability and reassessing capital allocation and funding arrangements. The review is in early stages and may lead to asset sales or other structural changes. The company has engaged advisors to assist with this process and has committed to updating the market as developments occur.
While no material changes to principal activities were reported this quarter, the strategic review signals a critical juncture for Pro-Pac as it seeks to navigate financial headwinds and position itself for sustainable growth.
Bottom Line?
Pro-Pac’s modest revenue growth and new financing provide short-term stability, but the strategic review and project delays underscore ongoing challenges ahead.
Questions in the middle?
- What specific outcomes will the strategic review recommend, and will asset sales materialize?
- How will regulatory delays impact the timeline and viability of the recycling plant project?
- Can Pro-Pac improve profitability and reduce its EBITDA losses in the coming fiscal year?