Overview
ACME manufactures flexible packaging, foils and printed packaging for Sri Lankan and export-oriented consumer industries. The key change in the latest filing is that operations returned to profit after a deeply loss-making comparable quarter, although finance costs and other charges still left the group in a net loss.
Price performance
At LKR 4.20 on 11 September 2026, ACME had fallen 54.4% over six months against a 6.3% ASPI decline. The price sits near the low end of its 52-week range, while 60-day volatility has cooled materially relative to its own one-year pace.
The three-year record includes four declines of 15% or more, with the deepest at 71% and not yet recovered. Median daily turnover was LKR 1.5 million; a LKR 1 million order is about 65% of what trades on a typical day, a large part of a day's trading. Returns are restated for the February rights issue, which changed the share basis, so adjusted and as-traded returns should not be read as the same measure.
Valuation
With trailing earnings negative, P/E is not meaningful. The share instead trades at 5.46 times P/B, meaning LKR 5.46 is paid for each LKR 1 of reported net assets, versus the manufacturing median of 1.70 times. Its P/B is higher than 93% of the 29 sector peers with comparable book-value data.
ACME is more expensive than 80% of days since January 2019 on P/B, despite a market-wide value score of 1 out of 100. There is no dividend on record in the last two years. The market-wide assessment also relies partly on book data flagged as more than 18 months old, which limits confidence in that comparison.
News and sentiment
Coverage was unusually quiet, with no company articles in the last 30 days against a normal monthly rate of 1.7. Of three material articles in the past 90 days, all were neutral in tone.
The April sale agreement for the Piliyandala factory to Singer was reported at LKR 630 million as part of restructuring, but the available disclosure does not state the profit effect or use of proceeds. A May proposal to reduce stated capital by LKR 1.6 billion was intended to offset accumulated losses and remained subject to shareholder approval in the reported article. The February rights issue was completed at a filed 6:1 ratio; holders who did not participate were diluted.
Financials
June-quarter revenue fell 29.8% year-on-year to LKR 196.5 million, yet operating profit improved by LKR 78.7 million and the net loss narrowed by LKR 85.3 million to LKR 6.9 million. Gross margin was 24.0% versus 4.4% a year earlier, operating margin was 11.3% versus -20.2%, and net margin was -3.5% versus -33.0%. The group still lost about 4 cents on every LKR 1 of sales, but the gap was far smaller than a year earlier.
The June operating margin and gross margin each ranked second among seven comparable June quarters, while net margin also ranked second among seven. A LKR 29.1 million gap between operating profit and net profit shows that finance costs and other below-operating charges absorbed more than the operating surplus. Equity was LKR 511.4 million at June, compared with negative equity a year earlier, while shares outstanding had increased from 95 million to 665 million after the rights issue; per-share comparisons across that change are largely mechanical.
Risks
The main risk is the still-stretched financing position. At the March year-end, debt was 161.5% of owners' equity, meaning borrowings exceeded the capital belonging to shareholders, and operating profit covered the interest bill by -2.01 times because the business was loss-making.
The current ratio was 1.58, meaning ACME had LKR 1.58 of short-term assets, including inventory and customer receivables, for each LKR 1 due within a year. Annual free cash flow was negative LKR 316.2 million and cash conversion was 0.78 times, showing that the operating loss was accompanied by cash outflow. Manufacturing conditions also face higher energy and transport costs and softer July export conditions, although these are sector conditions rather than company-specific results.
Outlook
As at 12 September 2026, the next material event is the filing for the quarter ending 30 September 2026, expected from 12 November 2026 to 2 March 2027. It will show whether the June return to operating profit persisted while revenue remained lower year-on-year, or whether the improvement was confined to one quarter.
The available data cannot establish the earnings or cash impact of the factory sale, nor whether the proposed capital reduction received approval. Those restructuring items matter to the balance sheet presentation, but neither disclosure quantifies a continuing improvement in packaging earnings.