DAVY VIEW

IPL Plastics reported a good (+25%) year-on-year improvement in Q2 adjusted EBITDA, boosted by self-help measures and an initial contribution from Loomans. The stand-out feature in Q2 was the much better than expected increase in the adjusted EBITDA margin, which rose 410 basis points to 16.9% compared to Q2 2018. The securing of the largest sales contract ever by the Consumer Packaging Solutions division in the US also hints at the group’s medium-term opportunity and potential. The stock is trading at a discount to its peers, but as the group establishes a track record it has the potential to bridge this gap.