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Fri 1 Aug 2025
Close: 187c 
Day's move: 1c (0.54%)
Volume: 2 210 499
Trades: 298
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KAP Ltd. - Interest payment notification - KAP025
The company has advised noteholders of the interest rate of the debt instrument.
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KAP - dispute and competition complaint
The Company, from a transparency perspective, advised shareholders that Safripol and Sasol are engaged in a dispute regarding the price of ethylene, which has recently progressed to independent arbitration.
In addition, the Company is in dispute with Sasol regarding the supply volume commitment in terms of the ethylene supply agreement.
On 30 June 2025 Safripol lodged a complaint against Sasol at the Competition Commission and requested the Commission to expeditiously investigate whether Sasol's conduct, as the monopoly ethylene supplier in South Africa, is in contravention of the Competition Act. Safripol further applied to the Competition Tribunal for interim relief under section 49C of the Competition Act for the preservation of the status quo in terms of the ethylene supply agreement, pending the final determination of the complaint.
The Company and its legal advisors are confident of the Company's prospects in the various matters. In view of the complex nature of these matters it is anticipated that the relevant resolution processes will be lengthy. The Company will update shareholders of material developments when appropriate.
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KAP - update, initial trading statement & meeting
Shareholders and investors were referred to the interim financial results for the period ended 31 December 2024, which were released on 27 February 2025 ('1H25'). KAP indicated in those results that the group had experienced a generally subdued operating environment and that performance was negatively affected by the following three issues:
• increased operating costs related to the start-up and ramp-up of PG Bison's new medium-density fibreboard ('MDF') line;
• higher finance costs, which were capitalised during the construction phase of the group's major capital projects completed in FY24, including the MDF line; and
• lower vehicle production by two major original equipment manufacturers ('OEMs'), which resulted in a weaker performance by Feltex.
Company focus areas and outlook
The group remains focused on the following material items, which we expect to underpin performance over the medium term:
• Value realisation from the major capital projects: We invested in future growth, of which PG Bison's new MDF line is the largest and most recent investment. The line resulted in a c. 33% increase in the division's total production capacity and offers compelling growth opportunities for the group.
• Addressing underperformance: We are making good progress in addressing areas of underperformance, the most material of which relates to Unitrans, where an operating profit of R700 million is targeted over the medium term.
• Reducing net debt: We expect a net debt reduction to be supported by lower capital expenditure following the completion of recent investments, cash flow contribution from these investments, and an improved performance from Unitrans. We anticipate that the lower net debt levels, combined with an expected cycle of interest rate reduction, will increase balance sheet flexibility and enhance earnings.
In line with the board's succession planning, Frans Olivier was appointed as the new CEO following Gary Chaplin's recent resignation that was announced on 29 May 2025. Gary will assist KAP to the end of October 2025 to inter alia ensure a smooth transition over the year-end and audit period.
Initial trading statement
While one month remains of the company's financial year, ending 30 June 2025 ('FY25'), a reasonable degree of certainty exists following the period covered by this operational update that, if current trading conditions persist:
• earnings per share ('EPS') is expected to decrease by more than 30% for FY25, which is a decrease of at least 13.1 cents per share, when compared to the EPS of 43.8 cents for the year ended 30 June 2024; and
• headline earnings per share ('HEPS') is expected to decrease by more than 30% for FY25, which is a decrease of at least 13.6 cents per share, when compared to the HEPS of 45.3 cents for the year ended 30 June 2024.
Pre close meeting
Management invites interested stakeholders to a virtual meeting for a discussion and question-and-answer session on the operational update on 10 June 2025, at 10h00 (SAST). Please join the meeting via this link or email christina.steyn@kap.co.za for further details.
The results for the financial year, ending 30 June 2025, are expected to be released on or about 28 August 2025.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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