• Marcus Bogdan

Portfolio Changes - Increased Amcor (AMC) | Sold Chorus (CNU)

Australian Equities Income Portfolio Change:


Increased Amcor (AMC)






We have added to our position in Amcor (AMC) a global packaging company supplying a broad range of rigid and flexible packing products into the food, beverage, health care, home & personal care, and specialty cartons packaging industries. Amcor offers a well-balanced global footprint across the developed markets (primarily North America and Western Europe) and emerging markets (including China and India).

Moreover, the Bemis acquisition (acquired 2018) has enhanced its position in flexible packaging and is delivering synergy benefits ahead of expectations. AMC is well placed to deliver total cost synergies of $180m by the end of FY22.

AMC’s 3Q21 reported a strong earnings uplift of +12% on a year-over-year basis. Despite the headwinds of rising raw material costs (primarily resin), AMC was able to deliver margin expansion through pass-thru contract mechanisms and improved product mix (higher value protein and pet food packaging).

AMC has uplifted its earnings guidance three times in FY21, with the most recent guidance lifted to 14-15% vs prior 10-14%. AMC provides exposure to solid defensive growth and an attractive 4% dividend yield.


Sold Chorus (CNU)



We have sold the small holding in Chorus NZ (CNU) to fund the buying of Amcor (AMC). The draft regulatory process for the period from 1 January 2022 has so far disappointed in the maximum allowable revenue outcomes forecast, as modeled by Chorus. Uncertainty over the impact on the company’s proposed dividend policy of a payout ratio based on free cashflow has weighed on the share price. Amid the current broad-based economic recovery, we favour growing dividend income streams generated by industrial and some materials company earnings.