| Tue 26 Feb 2008, 14:53 | | TPC - Transpaco Limited - Unaudited interim group results for the 6 months ended |
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TPC
TPC
TPC - Transpaco Limited - Unaudited interim group results for the 6 months ended
31 December 2007 and dividend announcement
Transpaco Limited
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC
A leading manufacturer, recycler and distributor of plastic and paper packaging
products
UNAUDITED INTERIM GROUP RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2007 AND
DIVIDEND ANNOUNCEMENT
INTRODUCTION
Transpaco presents the unaudited interim financial results for the six months
ended 31 December 2007 ("the period"). The group enjoyed significant organic
growth with the Packaging Division capitalising on increasing demand and the
newly acquired Cape-based retail plastic bag factory ("the acquisition") coming
on-stream.
FINANCIAL RESULTS
Turnover increased by 41,8% to R353,4 million (Dec 2006: R249,2 million) as a
result of the acquisition and robust trading in the Packaging Division.
Operating income increased by 30,5% to R29,1 million (Dec 2006: R22,3 million).
The increase was less than expected as a result of:
the anticipated level of profitability from the acquisition not being fully
realised during the period due to the integration taking longer than expected.
Additional infrastructural requirements were required and have been installed.
Production is currently approaching targeted levels and imported product has
been almost completely replaced by Transpaco`s local manufacture; and
profitability in the Recycling Division being adversely affected by the
scarcity of raw materials.
The increases in operating expenses and interest were commensurate with the
acquisition, expansion plans implemented during the period and increased working
capital. Working capital requirements peak at 31 December each year. Interest
cover is at a comfortable 4,1 times.
The Group achieved headline earnings per share of 52,6 cents (Dec 2006: 52,3
cents), which was below expectations.
Profit before tax increased by 10% to R22,0 million (Dec 2006: R20,0 million).
The Group no longer enjoys tax-free investment grants. This resulted in an
increased tax rate of 33,0% (Dec 2006: 30,9%).
Net asset value per share increased by 9,1% to 481 cents (Dec 2006: 441 cents).
The ranking and weighted average number of ordinary shares in issue increased
due to 512 000 shares being taken up under the Transpaco Share Option Scheme.
This increase marginally affected earnings per share, diluted earnings per share
and net asset value per share.
PROSPECTS
Organic growth is continuing throughout the Group. As the Cape-based factory is
currently reaching satisfactory levels of production, the Board expects the
benefits of the acquisition to be substantially realised during the current six
months ending 30 June 2008 and thereafter. The shortage of raw material supply,
which constrained the Recycling Division, is being addressed. New PDI-owned buy-
back centres are being established with Transpaco`s assistance in areas where
collection infrastructure is poor. This will increase the supply of raw material
to the Recycling Division. A further benefit is Transpaco`s participation in BEE
Enterprise Development.
The benefit of additional machinery which has been commissioned at Britepak, the
printed folded carton division, and at the Group`s pallet stabilisation film
business Specialised Films, will be realised once the plants reach optimum
capacity which is anticipated during the forthcoming twelve month period.
Eskom`s power shortages have affected the Group. Satisfactory discussions have
been held with relevant service providers to manage interruptions at production
facilities. If these programmes are successfully implemented and in the absence
of unforeseen circumstances and spiralling raw material prices, the Board
believes that earnings growth in real terms for the financial year ending 30
June 2008 will be achieved.
DIVIDEND
The board has declared an interim dividend of 10 cents per share (Dec 2006: 10
cents) to shareholders recorded in the register on Friday 28 March 2008, payable
on Monday 31 March 2008.
The last day to trade cum dividend will be Wednesday, 19 March 2008. Shares will
commence trading ex dividend from the commencement of business on Thursday, 20
March 2008. The record date will be Friday, 28 March 2008.
Share certificates may not be dematerialised or rematerialised between Thursday,
20 March 2008 and Friday, 28 March 2008, both days inclusive.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
These unaudited interim financial results are prepared in accordance with IAS 34
- Interim Financial Reporting and comply with the Listings Requirements of JSE
Limited and the South African Companies Act, 1973. The accounting policies are
consistent in all material respects with those applied in the preparation of the
Group`s annual financial statements for the year ended 30 June 2007.
ON BEHALF OF THE BOARD
AJ Aaron
Non-executive Chairman
PN Abelheim
Chief Executive
L Weinberg
Financial Director
DIRECTORS
AJ Aaron (Chairman)*; PN Abelheim (Chief Executive); L Weinberg (Financial
Director); HA Botha*; JS Botha; SR Bouzaglou; SI Jacobson*;
D Thomas*; SP van der Linde*
*non-executive
Date 26 February 2008
Auditors Ernst & Young Incorporated
Sponsor Investec Bank Limited
Registered Office 331 6th Street, Wynberg, Sandton
Transfer Secretaries Computershare Investor Services 2004 (Pty)
Limited, 70 Marshall Street, Johannesburg
Website www.transpaco.co.za
SEGMENTAL ANALYSIS - Unaudited 6 months Dec 2007
Rigids Recycling Flexibles Packaging Properties Total
and Group
R`000 Services
Turnover - 28 572 38 636 177 824 108 376 - 353 408
2007
Turnover - 35 691 35 402 91 154 86 991 - 249 238
2006
Operating 1 514 1 652 11 322 12 883 1 770 29 141
profit -
2007
Operating 1 615 4 339 7 272 8 752 289 22 267
profit -
2006
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
R`000 Dec 2007 Dec 2006 June 2007
Turnover 353 408 249 238 542 588
Cost of sales 239 188 170 664 372 752
Gross profit 114 220 78 574 169 836
Operating costs 74 709 48 845 113 662
Depreciation 10 370 7 462 17 220
Operating profit 29 141 22 267 38 954
Net interest paid 7 159 2 315 7 339
Profit before taxation 21 982 19 952 31 615
Taxation 7 262 6 170 9 626
Profit after taxation 14 720 13 782 21 989
Weighted average number of 27 317 26 080 26 332
shares in issue (`000)
Diluted weighted average number 31 788 31 153 31 568
of shares in issue (`000)
Earnings per share (cents) 53,9 52,8 83,5
Headline earnings per share 52,6 52,3 83,0
(cents)
Diluted earnings per share 46,3 44,2 69,7
(cents)
Diluted headline earnings per 45,2 43,8 69,2
share (cents)
Dividend per share (cents)* 10,0 10,0 25,0
Reconciliation of headline
earnings (R`000)
Basic earnings 14 720 13 782 21 989
Profit on disposal of property, (359) (142) (137)
plant and equipment
Headline earnings 14 361 13 640 21 852
*Dividend declared after the period
CAPITAL COMMITMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
R`000 Dec 2007 Dec 2006 June 2007
Capital expenditure authorised
and contracted
Plant and equipment 4 585 12 000 31 723
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
6 months 6 months 12 months
R`000 Dec 2007 Dec 2006 June 2007
ASSETS
Non-current assets 136 401 115 745 123 085
Property, plant and equipment 127 868 108 888 115 267
Intangibles 482 482 482
Goodwill 3 204 3 204 3 204
Unlisted investments 3 012 2 140 2 549
Deferred taxation 1 835 1 031 1 583
Current assets 253 742 194 966 239 777
Inventories 77 037 59 648 69 536
Trade and other receivables 159 434 122 296 144 779
Taxation 3 573 4 397 5 661
Cash at bank and in hand 13 698 8 625 19 801
TOTAL ASSETS 390 143 310 711 362 862
EQUITY AND LIABILITIES
Capital and reserves 142 494 124 298 131 293
Share capital 277 261 272
Preference shareholders` 9 273 9 273 9 273
interest
Non-distributable reserve 1 837 1 688 1 773
Distributable reserve 131 107 113 076 119 975
Non-current liabilities 75 516 63 856 62 085
Preference share liability 4 285 5 026 4 672
Interest-bearing borrowings 63 505 52 621 51 623
Deferred taxation 7 726 6 209 5 790
Current liabilities 172 133 122 557 169 484
Trade and other payables 91 827 93 124 114 013
Provisions 2 226 1 385 4 420
Current portion of interest- 17 839 14 631 19 645
bearing borrowings
Bank overdraft 60 241 13 417 31 406
TOTAL EQUITY AND LIABILITIES 390 143 310 711 362 862
Number of shares in issue
(`000)
(Net of 2 706 000 treasury 27 159 26 079 26 079
shares)
Net movement in treasury shares 512 3 1 080
Ranking number of shares 27 671 26 082 27 159
Salient features
Net asset value per share 481 441 449
(cents)
Interest cover (x) 4,1 9,6 5,3
Operating margin (%) 8,3 8,9 7,2
ABRIDGED CONSOLIDATED CASH FLOW
Unaudited Unaudited Audited
6 months 6 months 12 months
R`000 Dec 2007 Dec 2006 June 2007
Cash flow from operating
activities
Cash (utilised by)/generated (5 272) (3 387) 12 585
from operations
Ordinary dividend paid (4 144) (3 130) (5 835)
(Decrease)/increase in (2 194) (1 024) 1 070
provisions
Net interest paid (7 159) (2 315) (7 339)
Taxation paid (3 490) (4 532) (10 222)
Net cash flow from operating (22 259) (14 388) (9 741)
activities
Cash flow from investing
activities
Proceeds on disposal of 590 334 550
property, plant and equipment
Acquisition of property, plant (23 056) (3 366) (19 724)
and equipment
Acquisition of business - (29 792) (29 792)
(Increase) / decrease in (463) 858 448
unlisted investments
Net cash flow from investing (22 929) (31 966) (48 518)
activities
Cash flow from financing
activities
Net movement in treasury 561 3 1 433
shares
Decrease in preference share (387) (355) (709)
liability
Increase in long-term 11 882 18 603 17 508
borrowings
(Decrease)/increase in short- (1 806) (477) 4 634
term borrowings
Net cash flow from financing 10 250 17 774 22 866
activities
Net movement in cash for the (34 938) (28 580) (35 393)
period
Cash and cash equivalents at the (11 605) 23 788 23 788
beginning of the year
Cash and cash equivalents at the (46 543) (4 792) (11 605)
end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
R`000 Dec 2007 Dec 2006 June 2007
Opening balance 131 293 113 621 113 621
Profit for the period 14 720 13 782 21 989
Share-based payment 64 22 85
Dividend paid (4 144) (3 130) (5 835)
Net movement in treasury shares 561 3 1 433
Closing balance 142 494 124 298 131 293
Sponsor: Investec Bank
Date: 26/02/2008 14:53:43 Produced by the JSE SENS Department.
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