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APK APKP
APK
APK / APKP - ASTRAPAK - Reviewed results for the year ended 28 February 2009
ASTRAPAK
(Incorporated in the Republic of South Africa) (Registration number
1995/009169/06)
Share code: APK ISIN: ZAE000096962
Share code: APKP ISIN: ZAE000087201
Revenue up 16%
EBITDA up 15%
HEPS (Fully diluted) up 6%
Cash from operating activities up 207%
Net debt down 21%
Condensed Consolidated Income Statements
Reviewed
Restated in
terms of Audited
IFRS 5
(discontinued Previously
Reviewed operations) reported
(R`000) 2009 2008 2008
CONTINUING OPERATIONS
Revenue 2 749 771 2 366 104 2 820 875
Cost of sales (2 143 375) (1 841 903) (2 220 685)
Gross profit 606 396 524 201 600 190
Other operating income 9 316 15 617 18 707
Distribution and (185 880) (171 126) (195 614)
selling costs
Administrative and (179 138) (147 514) (195 256)
other expenses
Share of results of 183 52 1 466
associates
Profit from operations 250 877 221 230 229 493
before loss on disposal
of subsidiary
Loss on disposal of (13 607) - -
subsidiary
Profit from operations 237 270 221 230 229 493
Investment income 31 040 14 667 14 844
Finance costs (116 842) (80 863) (89 553)
Profit before taxation 151 468 155 034 154 784
Taxation (82 914) (42 434) (43 453)
Profit for the year 68 554 112 600 111 331
from continuing
operations
DISCONTINUED OPERATIONS
Loss for the year from (3 622) (1 269) -
discontinued operations
Profit for the year 64 932 111 331 111 331
Attributable to:
Ordinary shareholders 41 996 87 573 87 573
of the parent
- Continuing operations 45 779 89 292 87 573
- Discontinued (3 783) (1 719) -
operations
Preference shareholders 18 125 16 160 16 160
of the parent
Minority interest 4 811 7 598 7 598
- Continuing operations 4 650 7 148 7 598
- Discontinued 161 450 -
operations
Profit for the year 64 932 111 331 111 331
Basic earnings per 35,5 76,3 76,3
ordinary share (cents)
From continuing 38,6 75,6 74,5
operations
From discontinued (3,1) (1,1) -
operations
Debenture interest - 1,8 1,8
Diluted earnings per 34,5 72,8 72,8
ordinary share (cents)
From continuing 37,5 72,0 71,0
operations
From discontinued (3,0) (1,0) -
operations
Debenture interest - 1,8 1,8
Weighted number of 118 037 117 524 117 524
ordinary shares in
issue (000`s)
Weighted number of 121 669 123 361 123 361
ordinary shares in
issue - fully diluted
(000`s)
Total ordinary 19 594* 33 445 33 445
dividends paid
Ordinary dividend per 14,50* 24,75 24,75
share (cents)
Preference dividends 18 125 16 160 16 160
paid and accrued
Preference dividend per 1 208,33 996,00 996,00
share (cents)
*Dividend per ordinary
share for the year
ended 29 February 2008
declared on 12 May 2008
and paid on 4 August
2008.
Reconciliation between
profit attributable to
ordinary shareholders
of the parent and
headline earnings
Profit attributable to 41 996 87 573 87 573
ordinary shareholders
of the parent
Add debenture interest - 2 083 2 083
Add loss on exercise of 960 427 427
options
Add loss on 13 607 - -
disinvestment in
subsidiary
Add measurement to fair 15 380 - -
value of assets
classified as held-for-
sale
Add impairment of 13 143 - -
goodwill in respect of
assets classified as
held-for-sale
Less IAS 16 reversal of - (3 000) (3 000)
impairment of property,
plant and equipment
Less IAS 16 profit on (355) (5 958) (5 958)
disposal of property,
plant and equipment
Total tax effect of 40 12 12
adjustments
Total minority interest 294 (63) (63)
of adjustments
Headline earnings 85 065 81 074 81 074
Headline earnings per 72,1 69,0 69,0
ordinary share (cents)
Attributable income 72,1 67,2 67,2
Debenture interest - 1,8 1,8
Headline earnings per 69,9 65,7 65,7
ordinary share - fully
diluted (cents)
Attributable income 69,9 63,9 63,9
Debenture interest - 1,8 1,8
Reconciliation between
profit from operations
and EBITDA
Profit from operations 250 877 221 230 229 493
before loss on disposal
of subsidiary
Depreciation 128 133 109 414 119 006
Amortisation of 80 11 11
intangibles
Earnings before 379 090 330 655 348 510
interest, taxation,
depreciation and
amortisation (EBITDA)
from continuing
operations
Profit from 33 283 8 263 -
discontinued operations
Depreciation 8 426 9 592 -
Amortisation of - - -
intangibles
Earnings before 41 709 17 855 -
interest, taxation,
depreciation and
amortisation (EBITDA)
from discontinued
operations
Earnings before 420 799 348 510 348 510
interest, taxation,
depreciation and
amortisation (EBITDA)
Condensed Consolidated Cash Flow Statements
Audited
Previously
Reviewed reported
(R`000) 2009 2008
Cash generated from operations 467 673 319 377
Decrease/(increase in working capital 81 399 (65 531)
Non-cash transactions (41 775) 5 958
Net financing costs and taxation paid (140 994) (101 975)
Net cash inflow before distribution to 366 303 157 829
ordinary shareholders
Debenture interest and dividend (35 289) (50 122)
distribution to ordinary shareholders
Net cash inflow from operating activities 331 014 107 707
Capital expenditure (188 717) (262 531)
Acquisition of investments, subsidiaries (29 147) (66 390)
and minority interests
Proceeds on the disposal of property, 9 151 12 277
plant and equipment
Net cash outflow from investing (208 713) (316 644)
activities
Net cash inflow from financing activities 29 554 141 136
Net increase/(decrease) in cash and cash 151 855 (67 801)
equivalents
Net cash and cash equivalents at the (41 792) 26 009
beginning of the year
Net cash and cash equivalents at the end 110 063 (41 792)
of the year
Disposal of Subsidiary
On 30 September 2008 a decision was taken to invoke a resolutive
condition with respect to Riverbend Trade & Invest 50 (Pty) Ltd
(trading as Spun Technologies). The assets and liabilities of the
subsidiary being disposed of at such date were as follows:
ASSETS
Property, plant and equipment 6 836
Inventory 1 957
Trade & other receivables 4 088
Cash and cash equivalents 547
Total 13 428
LIABILITIES
Trade and other payables 6 137
Total 6 137
Loss on disposal (7 291)
Impairment of goodwill at acquisition (6 316)
Loss on disposal (13 607)
Cash flow effect of withdrawal (547)
Condensed Consolidated Balance Sheets
Audited
Reviewed Previously
Reviewed Restated reported
(R`000) 2009 2008 2008
Assets
Non-current assets 1 033 186 1 151 470 1 151 470
Property, plant and 845 307 926 092 926 092
equipment
Deferred taxation 31 240 57 610 57 610
Goodwill and trademarks 149 358 149 140 149 140
Loans and investments 7 281 18 628 18 628
Current assets 1 045 857 953 483 953 483
Inventories (1) 229 956 372 476 372 476
Trade and other receivables 388 262 524 358 524 358
Cash resources 110 110 56 649 56 649
Assets classified as held 317 529 - -
for sale
- Discontinued operations 269 063 - -
- Properties 48 466 - -
Total assets 2 079 043 2 104 953 2 104 953
Equity and liabilities
Total equity 869 482 817 774 862 212
Ordinary share capital and 199 502 199 502 199 502
share premium
Retained income 671 814 646 940 646 940
Non-distributable reserves - 814 814
Capital reserve (2) 339 (9 343) (9 343)
Minority put option (18 887) (44 438) -
Treasury shares (156 697) (154 168) (154 168)
Amounts recognised directly 1 449 - -
in equity relating to
assets held-for-sale
Equity attributable to 697 520 639 307 683 745
ordinary shareholders
Preference share capital 142 590 142 590 142 590
and share premium
Minority interest 29 372 35 877 35 877
Non-current liabilities 499 812 548 081 503 643
Long term interest-bearing 341 052 376 947 376 947
debt
Financial instruments 18 887 44 438 -
(minority put option)
Deferred taxation 139 873 126 696 126 696
Current liabilities 709 749 739 098 739 098
Trade and other payables 399 068 489 855 489 855
Shareholders for preference 7 504 7 335 7 335
dividends
Short term interest-bearing 150 096 241 908 241 908
debt
Liabilities relating to 153 081
assets classified as held-
for-sale
- Discontinued operations 92 194 - -
to be disposed
- Discontinued operations 44 161
to be settled
- Properties 16 726 - -
Total equity and 2 079 043 2 104 953 2 104 953
liabilities
(1) Inventories
Inventories amounting to R1 042 484 (2008: R713 153) are carried
at net realisable value.
(2) Capital reserve
The capital reserve relates to employee share options valued using
the Black Scholes method and the cash financed stock plan.
Additional information
Capital expenditure 188 717 262 531 262 531
Capital commitments
- contracted not spent 9 680 38 186 38 186
- authorised not 56 618 55 864 55 864
contracted
Net asset value per 737 696 734
ordinary share (cents)
Net tangible asset value 610 569 607
per ordinary share
(cents)
Net interest bearing debt 53 72 68
as a percentage of equity
(%)
Net interest bearing debt 441 925 562 206 562 206
Long term interest- 341 052 376 947 376 947
bearing debt
Short term interest- 210 983 241 908 241 908
bearing debt (including
liabilities relating to
assets classified as held
for sale)
Cash resources (110 110) (56 649) (56 649)
Contingent liabilities 22 107 44 035 44 035
Number of ordinary shares 135 131 250 135 131 135 131
in issue 250 250
Property, plant and
equipment
Opening balance - net 926 092 764 882 764 882
book value
Additions 188 717 262 531 262 531
Acquisition of - 24 004 24 004
subsidiaries
Depreciation (136 559) (119 006) (119 006)
- Continuing operations (128 133) (109 414) (119 006)
- Discontinued operations (8 426) (9 592) -
Disposals - book value (8 796) (6 319) (6 319)
Disposal of subsidiaries (6 836) - -
Measurement to fair value (15 380) - -
of assets classified as
held-for-sale
Transfer of assets to (101 931) - -
held-for-sale
Closing balance - net 845 307 926 092 926 092
book value
Discontinued Operations
The assets and liabilities relating to certain of the Flexibles
operations have been presented as held-for-sale following the
directors` decision to dispose of the assets and certain
liabilities on 1 October 2008.
The conditional agreement that was signed on 16 March 2009
includes the assets and certain liabilities of the following
companies:
Astraflex (Proprietary) Limited
Astrapak Flexibles (a division of Astrapak KwaZulu-Natal
(Proprietary) Limited)
Astra Repro (Proprietary) Limited
Cape Wrappers (Proprietary) Limited
Diverse Labelling Consultants (Proprietary) Limited including its
equity accounted investment in Standard Labels (Mauritius)
Tamperpak (Proprietary) Limited
White House Properties (Paarl) (Proprietary) Limited
The completion date for the transaction is expected on or about
31 July 2009.
2009 2008
Operating cash flows 2 509 (16 496)
Investing cash flows (2 397) (32 154)
Financing cash flows 20 151 49 416
Total cash flows 20 263 766
Assets of disposal group
Property, plant and equipment 101 931 -
Investment in associate 13 227 -
Inventory 87 384 -
Other current assets 66 521 -
Total 269 063 -
Liabilities of disposal group
Trade and other payables 92 194 -
Total 92 194 -
Cumulative income or expense recognised
directly in equity relating to disposal
group classified as held for sale
Foreign exchange translation adjustments 1 449 814
Analysis of the result of discontinued
operations, and the result recognised on
the remeasurement of assets or disposal
group, is as follows:
Revenue 513 318 454 773
Expenses (485 384) (455 022)
Profit/(loss) before tax of discontinued 27 934 (249)
operations
Tax (3 033) (1 020)
Profit/(loss) after tax of discontinued 24 901 (1 269)
operations
Loss recognised on the remeasurement of (28 523) -
assets of the disposal group
Loss for the year from discontinued (3 622) (1 269)
operations
Reconciliation of Prior Year Balances and Movements
Balances as
previously Restated
stated balances
29 Feb Adjust- 29 Feb
(R`000) 2008 ment 2008
Minority put option - (44 438) (44 438)
Financial instruments (minority - 44 438 44 438
put option)
The comparatives have been restated to reflect the financial
liability of the group in relation to contractual put options
afforded to minorities. The restatement does not impact on the
Income Statement or Cash Flow Statement for the comparative
period.
Segmental Analysis
CONTINUING OPERATIONS
(R `000) Films Rigids Flexi- Indus-
bles trial
Revenue for the 1 347 740 1 368 634 104 243 91 845
segment - 2009
Transactions with (63 770) (86 288) (2 639) (9 994)
other operating
segments of the
Group - 2009
External customers - 1 283 970 1 282 346 101 604 81 851
2009
Revenue for the 1 200 491 1 172 860 103 362 64 776
segment - 2008
(restated)
Transactions with (92 290) (69 878) (5 406) (7 811)
other operating
segments of the
Group - 2008
External customers - 1 108 201 1 102 982 97 956 56 965
2008 (restated)
Profit from 86 396 153 832 6 407 4 242
operations (segment
result) - 2009
Profit from 52 182 149 616 13 983 5 449
operations (segment
result) - 2008
(restated)
Depreciation - 2009 27 940 92 128 5 307 2 758
Depreciation - 2008 23 344 80 107 4 182 1 781
Capital expenditure 33 959 135 851 1 289 11 969
- 2009
Capital expenditure 54 552 163 734 10 327 3 673
- 2008
Total assets - 2009 627 448 1 018 265 101 417 62 850
Total assets - 2008 773 686 889 450 393 583 48 234
Total liabilities - 556 221 440 632 91 483 29 031
2009
Total liabilities - 694 496 350 253 225 620 16 810
2008 (restated)
Segmental Analysis (continued)
Total
continuing Discontinued Total
(R `000) operations operations group
Revenue for the segment - 2 912 462 572 430 3 484 892
2009
Transactions with other (162 691) (59 112) (221 803)
operating segments of the
Group - 2009
External customers - 2009 2 749 771 513 318 3 263 089
Revenue for the segment - 2 541 489 508 896 3 050 385
2008 (restated)
Transactions with other (175 385) (54 123) (229 508)
operating segments of the
Group - 2008
External customers - 2008 2 366 104 454 773 2 820 877
(restated)
Profit from operations 250 877 33 283 284 160
(segment result) - 2009
Profit from operations 221 230 8 263 229 493
(segment result) - 2008
(restated)
Depreciation - 2009 128 133 8 426 136 559
Depreciation - 2008 109 414 9 592 119 006
Capital expenditure - 2009 183 068 5 649 188 717
Capital expenditure - 2008 232 286 30 245 262 531
Total assets - 2009 1 809 980 269 063 2 079 043
Total assets - 2008 2 104 953 - 2 104 953
Total liabilities - 2009 1 117 367 92 194 1 209 561
Total liabilities - 2008 1 287 179 - 1 287 179
(restated)
Condensed Consolidated Statement of Changes in Equity
Ordinary Non-dis-
share capital Retained tributable
(R `000) and premium income reserve
Restated balances at 28 199 502 588 641 (1 269)
February 2007
Foreign currency translation 2 083
Expensing of share based
payments for the year
Adjustments to minority
interest
Share issue expenses
Net income and expense for - - 2 083
the year recognised directly
in equity
Profit for the year 103 733
Net ordinary dividends paid (29 274)
Preference dividends paid (16 160)
Put options for minority
interests
Acquisition of treasury
shares
Redemption of debentures
Balances as at 29 February 199 502 646 940 814
2008 as previously reported
Put options for minority
interests IAS 39
Balances as at 29 February 199 502 646 940 814
2008 restated
Foreign currency translation 635
Expensing of share based
payments for the year
Net income and expense for - - 635
the year recognised directly
in equity
Profit for the year 60 121
Net ordinary dividends paid (17 122)
Contributions made by
minorities
Acquisition of minority
interest
Preference dividends paid (18 125)
Exercise of put options by
minority shareholders
Exercise of options
Incentive scheme reversals
Balances as at 28 February 199 502 671 814 1 449
2009
Condensed Consolidated Statement of Changes in Equity (continued)
Minority
Capital Put Treasury Deben-
(R `000) reserve Option shares tures
Restated balances 8 490 - (154 872) 58 005
at 28 February 2007
Foreign currency
translation
Expensing of share (17 833)
based payments for
the year
Adjustments to
minority interest
Share issue
expenses
Net income and (17 833) - -
expense for the
year recognised
directly in equity
Profit for the year
Net ordinary
dividends paid
Preference
dividends paid
Put options for (44 438)
minority interests
Acquisition of 704
treasury shares
Redemption of (58 005)
debentures
Balances as at 29 (9 343) - (154 168) -
February 2008 as
previously reported
Put options for (44 438)
minority interests
IAS 39
Balances as at 29 (9 343) (44 438) (154 168) -
February 2008
restated
Foreign currency
translation
Expensing of share 9 682
based payments for
the year
Net income and 9 682 - -
expense for the
year recognised
directly in equity
Profit for the year
Net ordinary
dividends paid
Contributions made
by minorities
Acquisition of
minority interest
Preference
dividends paid
Exercise of put 25 551
options by minority
shareholders
Exercise of options 2 749
Incentive scheme (5 278)
reversals
Balances as at 28 339 (18 887) (156 697) -
February 2009
Condensed Consolidated Statement of Changes in Equity (continued)
Attributable Preference
to share Minority Total
ordinary capital
(R `000) shareholders and premium interests equity
Restated balances 698 497 142 602 31 149 872 248
at 28 February
2007
Foreign currency 2 083 2 083
translation
Expensing of (17 833) (17 833)
share based
payments for the
year
Adjustments to - (670) (670)
minority interest
Share issue - (12) (12)
expenses
Net income and (15 750) (12) (670) (16 432)
expense for the
year recognised
directly in
equity
Profit for the 103 733 7 598 111 331
year
Net ordinary (29 274) (2 200) (31 474)
dividends paid
Preference (16 160) (16 160)
dividends paid
Put options for (44 438) (44 438)
minority
interests
Acquisition of 704 704
treasury shares
Redemption of (58 005) (58 005)
debentures
Balances as at 29 683 745 142 590 35 877 862 212
February 2008 as
previously
reported
Put options for (44 438) (44 438)
minority
interests IAS 39
Balances as at 29 639 307 142 590 35 877 817 774
February 2008
restated
Foreign currency 635 635
translation
Expensing of 9 682 9 682
share based
payments for the
year
Net income and 10 317 - - 10 317
expense for the
year recognised
directly in
equity
Profit for the 60 121 4 811 64 932
year
Net ordinary (17 122) (2 139) (19 261)
dividends paid
Contributions - 2 649 2 649
made by
minorities
Acquisition of - (11 826) (11 826)
minority interest
Preference (18 125) (18 125)
dividends paid
Exercise of put 25 551 25 551
options by
minority
shareholders
Exercise of 2 749 2 749
options
Incentive scheme (5 278) (5 278)
reversals
Balances as at 28 697 520 142 590 29 372 869 482
February 2009
Commentary
Group Profile
Astrapak Limited and its subsidiaries ("the Group"), manufactures and
distributes an extensive range of plastic packaging, producing annualised
continuing revenues in excess of R2,7 billion. The Group has manufacturing
facilities in all the main centres of South Africa and a joint venture in
Mauritius. The Group employs 4 390 (2008: 4 136) employees in South Africa.
The operations are grouped into four segments - Films, Rigids, Flexibles and
Industrials - servicing mainly food, beverage, personal care, pharmaceutical,
agricultural, industrial and retail markets.
The Group remains focused on innovation-led growth in plastic packaging, which
should continue to gain an increasing share of the overall packaging market, and
plans to continue expansion through a balance of organic and acquisitive growth.
In the SENS announcement dated 31 March 2009 ("the SENS announcement")
shareholders were advised that the Board of Directors of Astrapak ("the Board")
had undertaken a thorough review of its portfolio of operations and target
markets and had redefined the future strategy for its businesses. As a result
the Board resolved to focus and invest in its core Films and Rigids divisions.
As the first step in the implementation of its new strategy, the SENS
announcement advised shareholders that the Group had agreed terms on the
disposal of certain businesses within the Flexibles Division to Pamish
Investment No 46 (Pty) Ltd, a wholly owned subsidiary of Afripak (Pty) Ltd and
for an acquisition from Nampak of certain assets for the Films Division.
Financial Results
As a result of the Flexibles disposal noted in the SENS announcement, the
financial results for the year ending 28 February 2009 are presented in
accordance with the requirements of IFRS 5 (Non-current assets held-for-sale and
discontinued operations) ("IFRS 5"). This requires a restatement of the
comparatives in the condensed consolidated income statement.
Notwithstanding the challenging trading conditions which prevailed throughout
the year under review, the Group has managed to improve its profit from
operations, especially in the second half of the financial year.
Downward pressure on margins remained a feature of the results for the year
under review and this was again caused by relentless increases in polymer prices
only dissipating towards the end of the financial year, the continued resistance
of customers to accept price increases timeously and a general slowdown in
consumer spending especially in higher-end markets. Despite this, the Group
managed to increase its profit from operations by focusing on internal
efficiencies and synergy extraction.
Higher interest rates during the year had a material impact on the Group as it
affected consumer spending and the cost of servicing debt providers and
preference shareholders. The average interest rate during the year under review
was 1,7% higher than during the comparative period. The current downward trend
in interest rates should impact positively on the results of the Group going
forward.
Turnover for the year increased by 16% compared to the prior year. Acquisitions
accounted for 1% of the increase in turnover, volume growth in turn accounted
for 3%, whilst 12% was due to sales price increases related to the recovery of
raw material and other input costs.
Profit from continuing operations increased by 13% to R250,9 million (2008:
R221,2 million) and the resultant operating margin decreased to 9,1% (2008:
9,3%). Operating overheads increased by 17% as a result of an increase in
capacity from capital investment, increases in distribution costs associated
with increased fuel prices, wage increases in excess of inflation, significant
increases in the cost of electricity and other aspects of a rapidly increasing
cost environment. Once-off expenditure of approximately R5,0 million was
incurred during the year. During the year the Group introduced measures to
address increasing costs and initial benefits from these measures have already
materialised.
A resolutive condition contained in the sale of shares agreement entered into
with the original vendors of Riverbend Trade and Invest 50 (Pty) Ltd
("Spuntech") was fulfilled and as a result the sale agreement is null and void.
An impairment expense totalling R13,6 million has been made in the year and this
is accounted for as a loss on the disposal of a subsidiary. This expense is not
of a trading nature and is added back for the purposes of determining headline
earnings and therefore headline earnings per share ("HEPS").
Net interest paid of R85,8 million (2008: R66,2 million) was significantly
higher than that of the prior year as a consequence of higher interest rates,
and increased borrowings utilised for expansion, capital expenditure and working
capital requirements during the first half of the year. Attention applied to
working capital management reduced working capital investment by R81,4 million
and this impacted positively on the level of gearing by year end.
Taxation amounted to R82,9 million (2008: R42,4 million) and includes the
payment of Secondary Taxation on Companies of R2,0 million and the reversal of
certain deferred tax assets, totalling R21,7 million, raised in subsidiary
companies during prior financial periods. In addition, tax losses totalling
R22,7 million were incurred against which no deferred tax assets were raised. As
a result the effective tax rate was therefore an unusually high 54,7% (2008:
27,4%). The sustainable future tax rate is expected to approximate the company
income tax rate of 28%.
The loss on discontinued operations for the period is R3,6 million (2008: R1,3
million) as set out in the Discontinued Operations note below.
No new acquisitions or major investments were completed by the Group during the
period under review. Capital expenditure incurred was R188,7 million and the
Group acquired minority interests in the Plastech group of companies, Consupaq
(Pty) Limited, Saflite Cape (Pty) Ltd and Astra Repro (Pty) Ltd for a total
purchase consideration of R31,6 million. Improved cash generation by operations,
the lower capital investment and the release of R81,4 million from working
capital, meant that the Group was able to reduce its net debt position to R441,9
million (2008: R562,2 million) resulting in the ratio of net interest bearing
debt to equity decreasing from 72% in the prior year to 53%. This is expected to
reduce further in the financial year ahead.
HEPS increased by 4,5% against the comparative period to 72,1 cents (2008: 69,0
cents). Fully diluted HEPS increased by 6,4%.
Normalising HEPS for the effect of the non-recurring deferred tax asset
reversals would have resulted in HEPS growth of 23%, being 84.7 cents per share.
Comparative Figures
The comparative figures for 29 February 2008 have been restated to reflect the
disclosure requirements of IFRS 5.
The comparatives have further been restated to reflect the financial liability
of the Group in relation to contractual put options afforded to minorities. This
liability was raised in terms of IAS 39 (Financial Instruments: Recognition and
Measurement). This restatement does not impact on the income statement for the
comparative period. The standard does not allow for the valuation and bringing
to book of the corresponding call option issued in favour of the Group and only
the liability is therefore recognised in terms of this standard. Further details
can be found in the Reconciliation of Prior Year Balances and Movements note.
Basis of Preparation
These preliminary financial statements have been prepared in accordance with the
recognition and measurement requirements of International Financial Reporting
Standards and the disclosure requirements of International Accounting Standard
34.
The accounting policies are consistent with those applied in the financial
statements for the year ended 29 February 2008.
Deloitte & Touche, the Group`s independent auditor, has reviewed the condensed
consolidated results contained in this preliminary report and their unmodified
report is available for inspection at the Company`s registered office.
Changes to the Board of Directors
Over the year the Board has been reorganised and now comprises of a majority of
independent non-executive directors and is compliant with the King Report on
Corporate Governance requirements for independent non-executives and committee
structures.
The following changes to the Board occurred during the year:
Retirements
Mr R Crewe-Brown on 6 June 2008; Mr W J Venter on 30 November 2008.
Resignations
Mr G King as Company Secretary on 31 August 2008; Mr H Todd on
30 November 2008; Mr G Petzer on 1 December 2008; Mr T Kgage on 1 December 2008;
Mr J Buchanan on 18 March 2009;
Ms K Seopela stepped down as Acting Chair on 17 March 2008 but continues to
serve as a non-executive director.
Appointments
Mr P Botha as a non-executive director on 30 July 2008;
Mr G Steffens as an independent non-executive director on
18 March 2009; Ms P Langeni as independent non-executive Chair on 18 March 2009;
Ms E Cornelius as Company Secretary on 1 November 2008.
Executive role changes of existing directors
Mr M Baglione became Chief Executive Officer on 6 June 2008;
Mr M Diedloff became Chief Financial Officer on 1 December 2008.
We would like to thank those directors who retired and resigned during the year
for their significant contribution to the Group.
Prospects
Difficult trading conditions are expected to remain until at least the second
half of the 2009 calendar year. International markets remain volatile and the
effects will continue to spill over into the local economy. The uncertainty
around current economic issues, local and foreign, will continue to impact on
consumer confidence. The steep increase in the cost of electricity and other
cost increases forecast for the next financial year are of further concern.
This being said, capital allocation and cost reduction programs, tighter
financial disciplines and plant level productivity initiatives are targeted to
ensure that the Group continues to improve margins, cash flow, profitability and
returns to shareholders.
In addition, the Group will continue with its strategy of identifying and
addressing underperforming assets to optimise shareholder value.
Dividend
The economic outlook for 2009 remains weak, with limited visibility, continuing
volatility and downward pressure on margins. Notwithstanding the success of the
measures taken to date, the Board has decided not to declare a dividend for the
financial year being reported on in order to preserve funding for the Group`s
strategic internal growth options which the Board believes to be very
attractive. The position in respect of dividend payments will be re-assessed by
the Board in the future.
Exercise of caution
In light of the detailed terms announcement released on SENS on 31 March 2009
regarding the disposal of certain Flexible operations, shareholders are advised
that all the terms have been disclosed therefore caution is no longer required
to be exercised by shareholders when dealing in securities of Astrapak Limited.
Acknowledgements
The Board would like to express its appreciation to all its management and staff
for their efforts during the year.
Investor presentation
An investor presentation has been prepared and can be accessed on the investor
relations segment of the Astrapak website (www.astrapak.co.za)
For and on behalf of the Board
Marco Baglione M Diedloff
(Chief Executive Officer) (Chief Financial Officer)
Sandton
6 May 2009
Board of Directors: P Langeni* (Chair),
M Baglione (Chief Executive Officer),
M Diedloff (Chief Financial Officer), P C Botha*, D C Noko*,
K P Seopela*, G Z Steffens*, *Non-executive Company Secretary: E Cornelius
Registered Office: 5 Kruger Street, Denver, 2011
PO Box 652740, Benmore, 2010, South Africa
Tel +27 11 615 8011
Fax +27 11 615 9790
Registrar: Computershare Investor Services (Pty) Ltd
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Operating entities
Films Division: Barrier Film Converters * City Packaging * East Rand Plastics *
Packaging Consultants * Pack-Line Holdings * Peninsula Packaging * Tristar
Plastics * Ultrapak
Rigids Division: Cinqpet * Consupaq * Hilfort * JJ Precision Plastics * ?Marcom
Plastics * PAK 2000 * Plastech * Plastform * Plas-top * Plastop (KwaZulu-Natal)
* Thermopac
Flexibles Division: Alex White * Knilam Packaging * Saflite Industrial:
International Edgeboard Technologies * International Tube Technologies *
Plusnet/Geotex
Flexibles Disposal Group: Astrapak Flexible * Astraflex * Astra Repro * Cape
Wrappers * Diverse Labelling Consultants * Standard Labels (Mauritius) *
Tamperpak
Date: 06/05/2009 13:20:01 Produced by the JSE SENS Department.
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