| Mon 14 May 2001, 0:00 | | Nampak Limited |
|
Registration number 1968/008070/06)
(Incorporated in the Republic of South Africa)
INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED
31 MARCH 2001
Group income statement Unaudited Audited
6 months ended year ended
31 March 30 Sept
2001 2000 Change 2000
Rm Rm % Rm
Revenue 5 306,2 4 593,5 16 9 854,2
------- ------- -------
Operating profit before
abnormal items (Note 1) 438,7 474,2 (7) 984,1
Abnormal items (Note 2) (63,9) (10,1) (33,1)
------- ------ -------
Operating profit after
abnormal items (Note 3,4) 374,8 464,1 (19) 951,0
Net interest (paid)/
received (Note 5) (49,9) 1,0 (48,8)
------- ------ -------
Profit before taxation 324,9 465,1 (30) 902,2
Taxation 95,9 128,5 229,1
------- ------ -------
Profit after taxation 229,0 336,6 (32) 673,1
Share of associate
companies' profits/(losses) 0,4 (0,1) (1,3)
Attributable to outside
shareholders in
subsidiaries 23,6 22,5 46,8
------- ------ -------
Attributable to
shareholders in Nampak
Limited 205,8 314,0 (34) 625,0
------- ------ -------
Number of ordinary shares
in issue (000) 509 357 508 995 509 350
Weighted average number of
ordinary shares on which
headline earnings and basic
earnings per share are
based (000) 509 354 508 968 509 050
Weighted average number of
ordinary shares on which
diluted headline earnings
and diluted basic earnings
per share are based (000) 509 354 511 150 510 418
Headline earnings per
ordinary share (cents) 40,3 61,5 (34) 123,1
------- ------- -------
Basic earnings per share
(cents) 40,4 61,7 (35) 122,8
Dividend per share (cents) 17,8 17,8 53,3
Fully diluted headline
earnings per share (cents) 40,3 61,2 (34) 122,8
------- ------- -------
Fully diluted earnings per
share (cents) 40,4 61,4 (34) 122,4
Determination of headline
earnings
Attributable profit for
the period per income
statement 205,8 314,0 625,0
Adjusted for:
Net profit on sale of
assets/operations (0,6) (1,0) (0,4)
Loss on re-organisation of
debt 0,2 - 2,3
Headline earnings for the
period 205,4 313,0 (34) 626,9
------- ------ -------
Group balance sheet
Unaudited Audited
31 March year ended
30 Sept
2001 2000 2000
Rm Rm Rm
Assets
Non-current assets 3 522,4 3 589,9 3 466,1
Property, plant and
equipment 3 456,6 3 476,8 3 424,7
Investments and associates
(Note 6) 65,8 113,1 41,4
Current assets 3 474,6 3 020,4 3 664,7
Inventories 1 245,1 1 143,0 1 182,8
Trade and other receivables 1 628,2 1 566,0 1 726,8
Bank balances, deposits and cash 601,3 311,4 755,1
------- ------- -------
Total assets 6 997,0 6 610,3 7 130,8
------- ------- -------
Equity and liabilities
Capital and reserves 2 654,3 2 971,9 2 554,5
Capital 357,2 354,7 357,1
Non-distributable reserves 185,4 348,9 192,8
Retained earnings 2 111,7 2 268,3 2 004,6
Outside shareholders 246,7 237,3 223,0
Non-current liabilities 2 120,0 1 823,2 1 877,5
Interest bearing debt 1 726,7 1 471,1 1 485,7
Deferred taxation 393,3 352,1 391,8
Current liabilities 1 976,0 1 577,9 2 475,8
Trade and other payables 1 814,2 1 427,4 2 155,8
Taxation 71,1 59,8 139,2
Shareholders for dividend 90,7 90,7 180,8
------- ------- -------
Total equity and liabilities 6 997,0 6 610,3 7 130,8
------- ------- -------
Total borrowings: total
shareholders' funds 59,5% 45,8% 53,5%
Net borrowings/(cash): total
shareholders' funds 38,8% 36,0% 26,3%
Total liabilities: shareholders'
funds 141,2% 106,0% 156,7%
Net worth per ordinary share
(cents) 521 584 501
Group statement of changes in equity
Unaudited Audited
6 months ended year ended
31 March 30 Sept
2001 2000 2000
Rm Rm Rm
Equity at beginning of period 2 554,5 2 988,3 2 988,3
Changes in capital - 1,8 3,2
Share capital - - 0,1
Share premium on new issue - 1,8 3,1
Changes in non-distributable
reserves (7,4) 96,3 (58,7)
Non-distributable reserve arising
on acquisition of business - 102,1 17,1
Decrease in foreign currency
translation reserve (15,3) (1,8) (84,4)
Transfer from/(to) retained
earnings 7,9 (4,0) 8,6
Changes in retained earnings 107,2 (114,5) (378,3)
Goodwill written off - (341,9) (723,2)
Attributable profit for the year 205,8 314,0 625,0
Preference shares - dividends - - (0,1)
Ordinary shares - dividends (90,7) (90,6) (271,4)
Transfer (to)/from
non-distributable reserves (7,9) 4,0 (8,6)
Equity at the end of the period 2 654,3 2 971,9 2 554,5
------- ------- -------
Group cash flow statement
Unaudited Audited
6 months ended year ended
31 March 30 Sept
2001 2000 2000
Rm Rm Rm
Cash operating profit 603,5 638,6 1 349,0
Working capital changes (307,7) (416,6) (191,6)
Net interest (paid)/received (49,9) 1,0 (48,8)
Taxation paid (162,6) (143,6) (164,9)
------- -------- -------
Cash available from operations 83,3 79,4 943,7
Dividends paid (180,8) (178,8) (295,7)
------- -------- -------
Net cash (outflow)/inflow from
operating activities (97,5) (99,4) 648,0
Net cash outflow from investing
activities (186,3) (1 513,0) (494,0)
------- -------- -------
Net cash (outflow)/inflow before
financing activities (283,8) (1 612,4) 154,0
Net cash inflow/(outflow) from
financing activities 145,9 1 275,9 (466,3)
------- -------- -------
Net decrease in cash and cash
equivalents (137,9) (336,5) (312,3)
Cash and cash equivalents at
beginning of period 328,8 649,7 649,7
Translation of foreign
subsidiaries (1,4) (1,8) (8,6)
------- ------- -------
Cash and cash equivalents at end
of period (Note 7) 189,5 311,4 328,8
------- ------- -------
Notes Unaudited Audited
6 months ended year ended
31 March 30 Sept
2001 2000 Change 2000
Rm Rm % Rm
1. Operating profit
(before abnormal items)
RSA and Africa trading 325,9 373,8 (13) 721,0
NamITech trading 18,5 12,2 52 22,5
Nampak plc trading 52,1 26,0 100 100,0
Group Property, Treasury
and Other 42,2 62,2 (32) 140,6
------- ------- -------
438,7 474,2 (7) 984,1
------- ------- -------
2. Abnormal items
Retrenchment costs (see
below) (38,4) * (9,9) (23,1)
Product claims (24,3) ** - (3,1)
Loss on disposal of
property (0,1) - (4,6)
Provision for discontinued
operation (1,1) - -
Loss on re-organisation of
debt - (0,2) (2,3)
------- ------- -------
(63,9) (10,1) (33,1)
------- ------- -------
* Retrenchment costs have averaged R23,3m per annum over the past five
years.
** Shortfall on Foodcan claim (R18,3m) and Polyfoil export claim (R6,0m).
3. Operating profit (after
abnormal items)
RSA and Africa trading 270,6 364,2 (26) 695,9
NamITech trading 15,3 12,2 25 22,3
Nampak plc trading 50,9 26,0 96 97,8
Group Property, Treasury
and Other 38,0 61,7 (38) 135,0
------- ------- -------
374,8 464,1 (19) 951,0
------- ------- -------
4. Reconciliation of
operating profit
Operating profit as
previously reported 970,5
Abnormal items as
previously reported (10,0)
Re-allocation of interest received (9,5)
-------
951,0
-------
5. Net interest received
Interest paid (85,5) (20,7) (134,4)
Interest received 35,6 21,7 75,0
Re-allocation of interest
received - - 9,5
------- ------- -------
(49,9) 1,0 (49,9)
Re-allocation of investment
income - - 1,1
------- ------- -------
(49,9) 1,0 (48,8)
------- ------- -------
6. Investments and loans
Directors' valuation 65,8 113,1 41,4
------- ------- -------
7. Cash and cash equivalents
Interest bearing debt (1 726,7) (1 471,1) (1 485,7)
Less long term liabilities 1 314,9 1 471,1 1 318,9
Bank balances, deposits
and cash 601,3 311,4 495,6
------- ------- -------
189,5 311,4 328,8
------- ------- -------
8. Supplementary information
Depreciation 228,7 173,6 396,2
Capital expenditure 206,3 178,2 434,6
- expansion 124,6 83,2 119,4
- replacement 81,7 95,0 315,2
Capital commitments 143,6 160,1 267,2
- contracted 20,1 60,0 204,3
- approved not contracted 123,5 100,1 62,9
Lease commitments 200,4 160,3 222,5
- land and buildings 188,1 153,7 205,0
- other 12,3 6,6 17,5
Contingent liabilities - 9,1 28,6
Review of results
The period under review has been the most difficult experienced by the group
in over a decade. The combination of the overhang of substantial raw
material price increases in 2000/2001 which could not be fully recovered in
selling prices, falling volumes, excess packaging industry capacity, and
material abnormal costs, all contributed to a significant fall in earnings.
In January a profit warning was issued based on the first quarter's
disappointing trading conditions. Whilst the second quarter trading was
better than the corresponding period last year, this was not sufficient to
offset the very poor first quarter and volume growth for the half year
remained negative. Furthermore, this low demand exacerbated the ongoing
pressure on margins. These factors, coupled with the abnormal costs
associated with the exceptional restructuring programme, resulted in
headline earnings per share showing a 34% decline to 40,3 cents per share.
Before restructuring costs and exceptional items the decline in headline
earnings per share was limited to 21%.
Turnover showed a 16% increase to R5 306,2 million but operating profit
before abnormal items declined to R438,7 million (-7%).
Net interest of R49,9 million was paid, principally on the funds borrowed to
purchase Plysu plc. Attributable profit after tax and minorities was R205,8
million.
As reflected in the geographical analysis, the trading difficulties and
abnormal costs primarily affected the South African packaging operations.
NamITech, Europe and Africa outside of South Africa, have shown satisfactory
growth in operating profits.
The group's balance sheet remains strong, with debt relating to the Plysu
acquisition being reduced to R1 293 million (2000 : R1 471 million).
Segmental report (after abnormal items)
Revenue Profit from
operations
Unaudited 6 Audited Unaudited 6 Audited
months to year ended months to year ended
March 30 Sept March 30 Sept
2001 2000 2000 2001 2000 2000
Rm Rm Rm Rm Rm Rm
METALS 1 593,3 1 566,2 2 992,3 141,1 169,8 297,5
Bevcan 760,8 763,4 1 398,9 76,6 101,7 153,7
Foodcan
and
Divpac 611,1 597,4 1 176,1 59,4 47,2 118,4
Other 221,4 205,4 417,3 5,1 20,9 25,4
PAPER 1 696,3 1 565,7 3 250,8 98,6 125,9 306,2
Corrugated
and
Printpak 813,9 756,4 1 586,5 53,9 64,0 155,2
Tissue 402,4 381,4 794,5 10,7 25,3 57,5
Paper
Merchants 344,3 307,0 622,0 15,8 17,0 40,1
Other 135,7 120,9 247,8 18,2 19,6 53,4
PLASTICS 1 966,0 1 392,6 3 481,4 81,8 94,5 190,0
Nampak
plc 971,6 449,9 1 570,9 50,9 26,0 97,8
Rotoflex
and
Sacks 310,1 273,7 573,5 4,4 15,1 27,4
Petpak
and
Liquid 322,3 320,1 603,1 15,4 32,2 29,7
Other 362,0 348,9 733,9 11,1 21,2 35,1
NAMITECH 105,2 73,8 149,3 15,3 12,2 22,3
OTHER (54,6) (4,8) (19,6) 38,0 61,7 135,0
Property
and
Treasury - - - 41,2 46,0 92,9
Other (54,6) (4,8) (19,6) (3,2) 15,7 42,1
TOTAL 5 306,2 4 593,5 9 854,2 374,8 464,1 951,0
------- ------- ------- ----- ----- -----
GEOGRAPHICAL ANALYSIS
South
Africa 4 211,3 4 027,4 7 974,8 278,5 406,8 737,1
Africa 177,9 120,9 308,5 28,3 19,5 63,2
Nampak
plc 971,6 449,9 1 570,9 50,9 26,0 97,8
Inter-
group
eliminations
and
other (54,6) (4,8) - 17,1 11,8 52,9
TOTAL 5 306,2 4 593,5 9 854,2 374,8 464,1 951,0
------- ------- ------- ----- ----- -----
Metals
Both Bevcan and Glass showed significant declines in profitability mainly
due to lower demand from the beverage industry and continuous pressure on
pricing.
Foodcan benefited from the increased fish can demand and an improved
agricultural season.
Divpac benefited from some growth in its underlying markets, and is
beginning to realise the gains arising from the significant investment in
aerosol manufacturing and the rationalisation programme initiated last year.
Paper
Corrugated and Printpak have been negatively affected by both pressure on
margins as a result of unrecovered raw material price increases, and lower
demand. Cost reductions have helped to support earnings.
Tissue was negatively affected by substantial raw material price increases
and, in the process of recovering these through higher selling prices,
market share declined.
Paper Merchants benefited from the major restructuring programme completed
last year, which limited the decline in profitability.
Plastics
The merger of the Plysu and BlowMocan businesses has largely been completed
and the new business now trades as Nampak plc. Most of the synergies
anticipated at the time of the acquisition have been realised. On an annual
basis Nampak plc contributes to group attributable profit after charging
interest on the debt raised to fund the acquisition.
Nampak plc is currently involved in several large in-plant capital projects
with the UK dairy industry, which are expected to enhance earnings and cash
flows in future years. The current foot-and-mouth crisis in the UK is not
expected to adversely affect the market for fresh milk nor impact negatively
on these projects or overall results.
Rotoflex profitability has improved as a result of increased volumes. Sacks
performed poorly as a result of lower volumes, reduced margins and initial
inefficiencies arising from factory consolidation.
Petpak, Megapak and Liquid Packaging results reflect the depressed state of
the total South African beverage market, exacerbated by unrecovered raw
material price increases.
The Polyfoil result has been adversely affected by an export claim and lower
domestic sales.
NamITech
NamITech continued to expand its offerings as a provider of secure
technology solutions throughout Africa, predominantly in the financial and
telecommunications sectors. This was reflected in strong growth in both
turnover and profitability.
NamITech recently concluded a transaction with Velocit-e, subject to
Competition Commission approval, which will further enhance its
technological leadership and position it strongly for further growth into
the future.
Other
The decline in Property and Treasury earnings is due to lower rental income
arising from restructuring initiatives. The adverse movement in Other is
due to consulting costs incurred and other central costs required to
initiate and manage the restructuring programme.
Directorate
Brian Connellan retires as non-executive Chairman on 30 June 2001 but
remains on the board.
With effect from 1 July 2001, Trevor Evans becomes executive Chairman and
John Bortolan, Group managing director.
Prospects
Trading in the second half of the year is expected to show some improvement
as volumes and margins stabilise. In addition, some benefits from the cost
reduction measures taken in the first half are expected. However, neither
of those factors is anticipated to be sufficient to offset the under-
performance of the first half, and the further high restructuring costs to
be incurred in the second half of the year. As a result, a decline in
headline earnings year-on-year is forecast for the year, but is expected to
be less than that shown for the current reporting period. Satisfactory
profit growth is projected to resume in the 2001/2002 financial year, as a
result of improved trading conditions and the conclusion of the
restructuring programme.
Dividend
The directors have declared an interim dividend (no. 65) of 17,8 cents per
share (2000: 17,8 cents), which is covered 2,3 times and is payable to
shareholders registered on 1 June 2001. Payment of dividends by way of
electronic funds transfer will be made on 10 July 2001. Shareholders who
have not already elected to receive payment by way of electronic funds
transfer are urged to do so in view of the continued high levels of cheque
fraud. Dividend cheques will be posted to shareholders on 10 July 2001.
On behalf of the board
B P Connellan Chairman
T Evans Deputy chairman and Chief executive officer
14 May 2001
Directors: B P Connellan* (Chairman), T Evans (Deputy chairman and Chief
executive officer), G E Bortolan (Managing - South Africa and Africa), P L
Campbell*, D E Cooper*, N Cumming, G V D Duffey, D A Hawton*, M M Katz*, A S
Lang (British), A M Marthinusen, K M Mokoape*, L M Ndlovu*, J W C Sayers, R
G Tomlinson, R A Williams*.
Alternate directors: P A de Weerdt, A D S Morais (Portuguese).
Secretary: N P O'Brien.
*Non-executive
Registered office: Nampak Centre, 114 Dennis Road, Atholl Gardens, Sandton
2196, South Africa.
(P O Box 784324, Sandton 2146, South Africa). Telephone: +27 11 719-6300.
Website: www.nampak.co.za
Transfer secretaries: Mercantile Registrars Limited, 11 Diagonal Street,
Johannesburg 2001, South Africa.
(P O Box 1053, Johannesburg 2000, South Africa). Telephone: +27 11 370-
5000.
PRESS RELEASE
Nampak Limited announced today that following the retirement of Brian
Connellan on 30 June 2001, Trevor Evans will be appointed as executive
Chairman.
Evans (56) is currently Deputy chairman and Chief executive officer and has
34 years service with the Nampak Group.
John Bortolan (52) with 21 years service, becomes Group managing director,
reporting to Evans.
Brian Connellan, Chairman for the past 11 years said "I am delighted at
these appointments - there are no two better men to lead Nampak into the
future". Connellan will remain on the board as a non-executive director.
