| Wed 22 Aug 2012, 7:05 | | TRANSPACO LIMITED - Reviewed condensed consolidated results for the year ended 30 June 2012 and dividend declaration |
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TPC 201208220005A
Reviewed condensed consolidated results for the year ended 30 June 2012 and dividend declaration
Transpaco Limited
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2012 AND DIVIDEND ANNOUNCEMENT
GROUP TURNOVER UP 11%
GROUP HEADLINE EARNINGS UP 3%
FINAL DIVIDEND PER SHARE 49 CENTS
INTRODUCTION
The board is pleased to report on the year ended 30 June 2012 (the year) in which Transpaco maintained growth and delivered a pleasing performance, despite trading conditions proving more challenging than expected.
A number of factors combined to create a difficult environment. The economy remained sluggish constraining overall growth. In addition margins were pressured by spiraling energy costs, intensified competition from local and international manufacturers and aggressive local raw material prices requiring the group to develop alternative sources of supply. Further, an industry-wide strike during July and August 2011 adversely affected the market well into the second half of the year.
Nonetheless Transpaco achieved turnover in excess of the R1 billion mark for the first time, attributable in the main to the groups proactive marketing and sales performance.
Transpacos solid performance was strengthened by controlled operating efficiencies and stringent management of operating expenses, supported by a reduction in net interest paid.
FINANCIAL RESULTS
The group increased headline earnings by 3,1% to R65,3 million (June 2011: R63,3 million).
Headline earnings per share (HEPS) decreased by 3,9,% to 205,6 cents (June 2011: 214,0 cents) and earnings per share (EPS) by 3,3% to 209,4 cents (June 2011: 216,5 cents).
Diluted HEPS increased 2,8 % to 201,1 cents (June 2011:195,7 cents).
In comparing results year-on-year, cognisance must be taken of the 3 312 126 additional shares issued during February 2011 as a result of Transpacos BEE shareholder converting its cumulative voting preference shares into ordinary shares. The weighted average number of shares in issue taken into account when calculating HEPS and EPS is 31 781 552 (June 2011: 29 605 600).
In the absence of the additional shares in issue, HEPS would have increased by 3,1% to 221,7 cents and EPS by 3,9% to 224,8 cents compared to the previous year.
Total operating profit grew slightly to R95,8 million (June 2011: R95,2 million) on turnover of R1 058,0 million (June 2011: R954,0 million).
Operating profit in the Paper division increased.
Market conditions in the Plastic division lead to margin squeeze, resulting in a decline in operating profits for that division.
In addition the R24 million investments in new plant and equipment and the associated costs at Specialised Films resulted in its contribution to the Plastic divisions operating profits to decline, as anticipated. The impact is short-term and Specialised Films is expected to benefit positively from this investment in the future.
The groups level of working capital remains well-managed. During the year this was impacted by the need to replace uncompetitive local raw material suppliers with international counterparts. Importing raw material carried extended lead times which resulted in a need to increase inventory.
Cash generated from operations amounted to R101,8 million (June 2010: R129,1 million). Transpacos net interest-bearing debt-to-equity position remains cash positive and interest cover improved to 67,8 times (June 2011: 33,3 times).
Net asset value per share increased by 15,7% to 1002 cents (June 2011:866 cents).
PROSPECTS
The group will continue its proven business strategy, targeting growth and maintaining strict financial management while identifying and pursuing appropriate acquisitions.
TRANSFORMATION
An independent accredited verification agency has assessed Transpaco as a Level 5 B-BBEE contributor. Improving this rating is a strategic and operational imperative for sustainability, and to this end Transpaco continues to promote comprehensive transformation strategies throughout the group at all levels.
DIVIDEND
The board has declared a final gross cash dividend out of income reserves of 49 cents per share. This resulted in total dividends of 80 cents per share for the year (June 2011:72 cents per share), an increase of 11,1%. Transpaco has no STC credits. After applying the dividend withholding tax of 15% a net final dividend of 41,65000 cents per share will be paid to those shareholders who are not exempt from the dividends tax. The issued shares at the date of declaration is 33 177 372 ordinary shares.
The salient dates for the dividend are as follows:
Last date to trade shares cum dividend: Friday, 14 September 2012
Shares trade ex dividend: Monday, 17 September 2012
Record date: Friday, 21 September 2012
Payment date: Tuesday, 25 September 2012
Share certificates may not be dematerialised or rematerialised between Monday, 17 September 2012 and Friday, 21 September 2012, both days inclusive.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The reviewed condensed consolidated annual financial results have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), its interpretations adopted by the International Standards Board (IASB), the presentation and disclosure requirements set out in IAS 34 Interim Financial Reporting and comply with the Listings Requirements of the JSE Limited and the South African Companies Act No 71 of 2008. The accounting policies are consistent in all material respects with those applied in the preparation of the groups annual financial statements for the year ended 30 June 2011. Transpaco has adopted all applicable new and amended standards, the effect of which had no material impact on the reviewed condensed consolidated annual financial results.
REVIEW OF INDEPENDENT AUDITORS
The groups auditors Ernst & Young Inc. have reviewed the condensed consolidated financial information for the year. Their review report is available for inspection at Transpacos registered office.
APPROVAL AND PREPARATION
These condensed consolidated annual financial results have been prepared under the direction and supervision of the Financial Director, L Weinberg CA(SA).
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*; SR Bouzaglou;
SI Jacobson*; D Thomas*; SP van der Linde*
* non-executive
Date: 22 August 2012
Auditors: Ernst & Young Incorporated
Transpaco Limited: Registration number: 1951/000799/06
Share code: TPC
ISIN: ZAE000008480
Income tax number: 9975/112/71/6
Company Secretary: HJ van Niekerk
Sponsor: Investec Bank Limited
Registered Office: 331 6th Street Wynberg Sandton
Transfer Secretaries: Computershare Investor Services (Pty) Ltd
70 Marshall Street Johannesburg
Website: www.transpaco.co.za
NOTES
1) During August 2011 the board of directors took a decision to dispose of the plant and machinery of the PET and PVC divisions and close those operations. The disposals of both these operations have been completed.
2) The sale of the property that housed the PVC division was sold during the year. Transfer of this property is expected shortly.
STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
12 months % 12 months
R000 Note Jun-12 Change Jun-11
CONTINUING OPERATIONS
Revenue 1 047 021 907 909
Turnover 1 044 221 15.2 906 058
Cost of sales (660 088) (549 436)
Profit before operating
costs and depreciation 384 133 7.7 356 622
Operating costs (256 077) (225 206)
Depreciation (27 486) (24 006)
Operating profit 100 570 (6.3) 107 410
Finance income 2 800 1 851
Finance costs (4 032) (4 677)
Profit before taxation 99 338 (5) 104 584
Taxation (29 019) (31 683)
Profit for the year from
continuing operations 70 319 (3.5) 72 901
DISCONTINUED OPERATIONS
Loss for the year from
discontinued operations 1 (3 756) (8 812)
Profit for the year 66 563 64 089
Other comprehensive income
Total comprehensive income 66 563 3.9 64 089
Weighted average number of
shares in issue (000) 31 782 29 606
Diluted weighted average
number of shares in issue (000)32 485 32 398
Continuing operations
Earnings per share (cents) 221.3 (10.1) 246.1
Diluted earnings per
share (cents) 216.5 (3.8) 225
Headline earnings per
share (cents) 218.7 (10.3) 243.7
Diluted headline earnings
per share (cents) 214 (3.9) 222.7
Continuing and discontinued operations
Earnings per share (cents) 209.4 (3.3) 216.5
Fully diluted earnings per
share (cents) 204.9 3.5 198
Headline earnings per
share (cents) 205.6 (3.9) 214
Fully diluted headline earnings
per share (cents) 201.1 2.8 195.7
Dividend per share (cents)* 80 11.1 72
*Includes interim dividend of 31 cents (June 2011: 29 cents) and a dividend declared after the period of 49 cents (June 2011: 43 cents)
Reconciliation of headline earnings (R000)
Continuing operations
Basic earnings 70 319 72 901
Negative goodwill (191)
Profit on disposal of property,
plant and equipment (797) (551)
69 522 (3.7) 72 159
Continuing and discontinued operations
Basic earnings 66 563 64 089
Negative goodwill (191)
Profit on disposal of property,
plant and equipment (1 230) (551)
Headline earnings 65 333 3.1 63 347
STATEMENT OF CASH FLOWS
Reviewed Audited
12 months 12 months
R000 Jun-12 Jun-11
Cash flow from operating activities
Cash generated from operations 101 877 129 070
Dividends paid (23 452) (19 906)
Finance costs from
continuing operations (4 032) (4 677)
Finance costs from
discontinued operations (452) (34)
Finance income from
continuing operations 2 800 1 851
Finance income from
discontinued operations 271
Taxation paid (26 784) (15 288)
Net cash inflow from
operating activities 50 228 91 016
Cash flow from investing activities
Proceeds on disposal of
property, plant and equipment 13 341 1 543
Expansion and replacement of
property, plant and equipment (67 007) (31 979)
Decrease in unlisted
investments 33
Increase in long-term
receivables (2 951)
Increase in short-term
receivables (2 110)
Acquisition of business (43 107)
Net cash outflow from
investing activities (58 694) (73 543)
Cash flow from financing
activities
Movement in treasury shares 1 698 790
Decrease in preference share
liability (343)
Decrease in long-term
borrowings (926) (11 479)
Decrease in short-term
borrowings (2 247) (2 668)
Net cash (outflow) from
financing activities (1 475) (13 700)
Net movement in cash for
the year (9 941) 3 773
Cash and cash equivalents
at the beginning of the year 80 493 76 720
Cash and cash equivalents at
the end of the year 70 552 80 493
SEGMENTAL ANALYSIS
Paper Properties Total Dis-
Plastic and Board and Group Continuing continued Total
R000 Products Products Services Operations Operations Group
Turnover - 2012 644 389 399 832 1 044 221 9 976 1 054 197
Turnover to customers 685 076 417 509 1 102 585 11 320 1 113 905
Less turnover to internal
customers 40 687 17 677 58 364 1 344 59 708
Turnover 2011 578 393 327 665 906 058 47 931 953 989
Turnover to customers 618 491 342 830 961 321 47 931 1 009 252
Less turnover to internal
customers 40 098 15 165 55 263 55 263
Operating profit/(loss) 2012 54 981 44 227 1 362 100 570 (4 858) 95 712
Operating profit/(loss) 2011 64 649 41 531 1 230 107 410 (12 200) 95 210
Capital expenditure 2012 57 255 9 374 378 67 007 67 007
Capital expenditure 2011 24 388 15 099 265 39 752 39 752
Assets 2012 336 742 141 248 87 062 565 052 565 052
Assets 2011 277 583 154 368 55 726 487 677 487 677
Liabilities 2012 153 049 72 051 19 429 244 529 244 529
Liabilities 2011 130 405 62 639 20 153 213 197 213 197
STATEMENT OF FINANCIAL POSITION
Reviewed Audited
12 months 12 months
R000 Note Jun-12 Jun-11
ASSETS
Non-current assets 195 482 167 862
Property, plant and equipment 185 659 159 231
Intangibles 482 482
Goodwill 3 204 3 204
Unlisted investmnets 33
Long-term receivables 2 951
Deferred taxation 3 186 4 912
Current assets 368 685 319 815
Inventories 123 521 89 422
Trade and other receivables 169 942 148 729
Short-term receivables 2 110
Taxation receivable 2 560 1 171
Cash at bank and in hand 70 552 80 493
Non-current asset classified as
held-for-sale 2 885
TOTAL ASSETS 565 052 487 677
EQUITY AND LIABILITIES
Capital and reserves 320 523 274 480
Issued share capital 320 317
Share premium 11 019 11 019
Other reserve 2 438 1 204
Distributable reserve 306 746 261 940
Non-current liabilities 46 694 43 766
Interest-bearing borrowings 24 968 25 894
Deferred taxation 21 726 17 872
Current liabilities 197 835 169 431
Trade payables and accruals 162 951 128 805
Provisions 16 186 16 443
Current portion of interest-bearing borrowings 18 191 20 438
Taxation payable 507 3 745
TOTAL EQUITY AND LIABILITIES 565 052 487 677
Number of shares in issue (000)
Number of shares (Net of treasury shares) 31 691 28 192
Shares issued 3 312
Movement in treasury shares 300 187
Ranking number of shares 31 991 31 691
Salient features
Net asset value per share (cents) 1 002 866
Operating margin % 9.1 10
Net interest-bearing debt : equity ratio % Net cash positiveNet cash positive
Interest cover (X) 67.8 33.3
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Preference
Share Distri
Share Share holder's Other bution
R'000 Capital Premium Interest Reserves Reserve Total
Balance at 30 June 2010 282 9 273 469 216 969 226 993
Profit for the year 64 089 64 089
Other comprehensive income
Total comprehensive income 282 9 273 469 281 058 291 082
Share-based payments 735 735
Dividend paid (19 906) (19 906)
Shares issued 33 11 019 (9 273) 1 779
Movement in treasury shares 2 788 790
Balance at 30 June 2011 317 11 019 1 204 261 940 274 480
Profit for the year 66 563 66 563
Other comprehensive income
Total comprehensive income 317 11 019 1 204 328 503 341 043
Share-based payments 1 234 1 234
Dividend paid (23 452) (23 452)
Movement in treasury shares 3 1 695 1 698
Balance at 30 June 2012 320 11 019 2 438 306 746 320 523
DISCONTINUED OPERATIONS
Reviewed Audited
12 months 12 months
R000 Jun-12 Jun-11
Turnover 9 976 47 931
Expenses (14 834) (60 131)
Operating loss (4 858) (12 200)
Finance income 271
Finance costs (452) (34)
Loss before tax from
discontinued operations (5 039) (12 234)
Taxation 1 283 3 422
Loss for the year from
discontinued operations (3 756) (8 812)
Loss per share (cents) from
discontinued operations (11.8) (29.8)
Diluted loss per share (cents)
from discontinued operations (11.6) (27.2)
Headline loss per share (cents)
from discontinued operations (13.2) (29.8)
Diluted headline loss per share
(cents) from discontinued
operations (12.9) (27.2)
Cash flows from discontinued operations
Net cash flows from operating
activities (7 193) 1 794
Net cash flows from investing
activities 5 305 (775)
Net cash flows from financing
activities (201)
Net cash flows (1 888) 818
CAPITAL COMMITMENTS
Reviewed Reviewed
12 months 12 months
R000 Jun-12 Jun-11
Capital expenditure authorised and contracted
Plant and equipment 12 821 24 178
Date: 22/08/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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