| Tue 23 Oct 2001, 0:00 | | Astrapak - Unaudited Results For The Six Months En |
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Astrapak Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/009169/06)
Share code APK ISIN ZAE000030938
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2001
Revenue up 20%
Operating income up 20%
Headline earnings per linked unit up 17%
CONSOLIDATED INCOME STATEMENTS
R000's 2001 2000
Revenue 386 253 321 149
Cost of sales 209 749 184 170
Gross profit 176 504 136 979
Net operating expenses 139 674 106 244
Operating income before interest
and taxation 36 830 30 735
Net interest paid 7 324 7 144
Income before debenture interest 29 506 23 591
Debenture interest 4 514 5 873
Income before taxation 24 992 17 718
Taxation 3 997 1 829
Income after taxation 20 995 15 889
Share of associates' net income
after taxation 696 365
Income attributable to minority
shareholders 1 557 168
Attributable income 20 134 16 086
Headline income 25 218 22 491
Earnings per linked unit (cents) 25,3 21,7
Attributable income (cents) 20,7 15,9
Debenture interest (cents) 4,6 5,8
Headline earnings
per linked unit (cents) 25,9 22,2
Attributable income (cents) 20,7 15,9
Debenture interest (cents) 4,6 5,8
Amortisation of goodwill (cents) 0,6 0,5
Weighted average number of linked
units in issue (000's) 97 436 101 260
Reconciliation between attributable
income and headline income
Attributable income 20 134 16 086
Debenture interest 4 514 5 873
Amortisation of goodwill 570 532
Headline income 25 218 22 491
CONSOLIDATED BALANCE SHEETS
R000's 2001 2000
Assets
Non-current assets 217 016 205 960
Property, plant and equipment 186 779 180 480
Deferred taxation 17 345 13 676
Goodwill 9 649 10 064
Loans and investments 3 243 1 740
Currents assets 263 774 225 215
Inventories 83 237 70 587
Trade and other receivables 133 233 114 879
Cash resources 47 304 39 749
Total assets 480 790 431 175
Equity and liabilities
Capital and reserves (Equity) 126 193 91 243
Share capital 108 108
Retained income 136 991 98 231
Non-distributable reserves 7 353 8 690
Treasury shares (18 259) (15 786)
Debentures 48 649 81 008
Linked unitholders' funds 174 842 172 251
Outside shareholders' interest 16 620 14 269
Non-current liabilities 97 493 57 121
Long-term interest bearing debt 79 530 42 348
Deferred taxation 17 963 14 773
Current liabilities 191 835 187 534
Trade and other payables 143 614 125 609
Linked unitholders for
debenture interest 4 514 5 873
Short-term interest bearing debt 43 707 56 052
Total equity and liabilities 480 790 431 175
Additional information
Capital expenditure (R000's) 21 816 16 408
Capital commitments (R000's)
- contracted not spent 27 550 8 659
- authorised not contracted - -
Net asset value per linked unit (cents) 1,79 1,70
Net tangible asset value per
linked unit (cents) 1,70 1,60
Net interest bearing debt as
a percentage of linked
unitholders funds (%) 43 34
Net interest bearing debt (R000's) 75 933 58 651
Long-term interest bearing debt 79 530 42 348
Short-term interest bearing debt 43 707 56 052
Cash resources 47 304 39 749
ABRIDGED CONSOLIDATED
CASH FLOW STATEMENTS
R000's 2001 2000
Cash generated from operations 50 801 43 655
Investment in working capital (19 504) 14 212
Non-cash transactions 108 (230)
Net financing costs and taxation paid (11 527) (11 091)
Net cash inflow from operating
activities 19 878 46 546
Capital expenditure (21 816) (16 408)
Acquisition of subsidiaries (38) (11 975)
Proceeds on the disposal of assets 1 334 2 445
Cash outflow from investing activities (20 520) (25 938)
Net cash outflow from financing
activities (9 811) (34 496)
Net decrease in cash equivalents (10 453) (13 888)
STATEMENT OF CHANGES IN EQUITY
R000's 2001 2000
Equity as at 1 March 107 151 76 016
Attributable income 20 134 16 086
Transfer to deferred tax asset (667) (6 68)
Acquisition of treasury shares (371) -
Ordinary dividends paid to outside
shareholders (54) (191)
Equity as at 31 August 126 193 91 243
COMMENTARY
SEGMENTAL ANALYSIS
R000's Films Rigids Speciality Group
Revenue - 2001 242 475 61 872 81 906 386 253
Revenue - 2000 194 056 49 398 77 695 321 149
Operating income before
interest and taxation - 2001 18 795 8 432 9 603 36 830
Operating income before
interest and taxation - 2000 16 822 4 138 9 775 30 735
Depreciation - 2001 8 444 3 191 2 551 14 186
Depreciation - 2000 7 671 2 798 2 110 12 579
Capital expenditure - 2001 13 865 4 556 3 395 21 816
Capital expenditure - 2000 8 734 1 804 5 870 16 408
Total assets - 2001 305 715 73 936 101 139 480 790
Total assets - 2000 278 273 62 562 90 340 431 175
Total liabilities - 2001 195 575 36 439 57 314 289 328
Total liabilites - 2000 155 991 29 983 58 681 244 655
Group Profile
Astrapak Limited ("Astrapak" or "the Group") is focused on the manufacture
and supply of plastic packaging.
The Group comprises 18 operating companies spread across the main centres of
South Africa including a joint venture in Mauritius. The companies are
grouped into three divisions, namely Films, Rigids and Speciality products;
and focus on supplying specialised packaging into the food, beverage,
confectionery, agricultural, consumer, petrochemical, pharmaceutical,
textile and industrial markets. The Group's companies supply a wide variety
of specialised packaging products across most segments of the plastic
packaging market, from high-volume to specialised niche products.
Astrapak has, since inception, invested in companies that are well
positioned to exploit the global trend towards plastic packaging through
innovation and technology. The objective of the Group is to produce
technologically advanced packaging and services to customers in order to
achieve superior growth in earnings and value for linked unitholders.
Message to investors
Astrapak's plans have been aimed at exploiting the growth in plastic
packaging which it believes will gain an increasing share of the packaging
market at large. The Group planned to do this through a combination of
acquisitive and organic growth and listed in November 1997 to gain access to
capital markets to assist it in realising these plans.
Since the major stock market decline in August 1998 and subsequent lack of
demand for small capitalisation stocks, the implied cost of capital rose
significantly.
This period was characterised by volatile and increasing oil prices and
slowing consumer demand which had a severe impact on the Group's operating
performance.
Astrapak's strategy in the circumstance was to seek and develop a number of
small and medium size ventures, maintain the high quality of its
manufacturing capacity and maximise cash flows in order to reduce debt.
The Group believes that it has achieved its goals, although these have, in
certain instances, taken longer than anticipated. In the six months to 31
August 2001, the annualized return on linked unitholders' funds is 29%,
compared to 26% in the corresponding period.
The Group has evaluated alternative capital allocation opportunities and
balanced these to achieve an optimal result for linked unitholders for the
period under review. This evaluation has resulted in the following capital
allocation:
R21,8 million for replacement as well as expansionary capital expenditure;
R32,4 million for partial debenture redemption.
These steps, together with the improving market conditions, have sparked a
positive cycle of interest and recognition which has resulted in an increase
in the price and tradeability of the linked unit.
In the light of the cost of debt, relative to cost of equity, the company
has chosen not to raise external capital in the past three years. Given the
recent improvement in the linked unit price, the Group will continue to
evaluate optimal funding.
Astrapak has achieved real growth, with revenue increasing by 20% which
included substantial volume growth as a result of increased market share.
This was attained without sacrificing operating income, which also increased
by 20%.
Headline earnings per linked unit increased by 17% to 25,9 cents (22,2
cents).
Trading performance has continued to improve across the Group, driven in
part by improvements in general economic conditions in the first and second
quarters of the year and supported by a decline in inflation and interest
rates. A slow-down in the growth of disposable income utilised for
travelling costs (fuel), cellular telephones and gambling has had a positive
impact on the markets in which Astrapak operates. The oil price was less
volatile during the review period than in the previous year, which resulted
in a far more stable operating environment.
Acquisitions and developments
Comparative numbers include the results of Pack-Line Holdings (Proprietary)
Limited for the two months from 1 July 2000 (the date of acquisition).
A new venture that complements the Group's existing paper cores and tubes
facility has been initiated. Known as International Edgeboard Technologies
(Proprietary) Limited ("IET"), the business manufactures paper edgeboard
used for pallet stabilisation in the fruit industry. IET is a wholly-owned
subsidiary of Astrapak.
As advised to linked unitholders on 25 May 2001, a partial redemption of the
debenture component of the linked units was effected in June 2001. In terms
thereof, 30 cents per debenture was repaid to linked unitholders registered
on 1 June 2001, amounting to R32,4 million. The partial redemption was
funded from new banking facilities.
Financial results
Group revenue increased by 20% to R386,3 million (R321,1 million),
attributable to:
Pricing increase 8%
Acquisitive growth 3%
Volume growth 9%
Operating income increased by 20% to R36,8 million (R30,7 million), yielding
an operating margin of 9,5% (9,5%).
Notwithstanding the additional borrowings associated with the partial
redemption (totalling R32,4 million), net financing costs have increased
marginally to R7,3 million (R7,1 million). This was achieved through
declining interest rates and lower average net debt during the period.
Income tax has increased to R4,0 million (R1,8 million) due to the erosion
of computed tax losses in previous reporting periods.
Headline income has increased by 12% to R25,2 million (R22,5 million). The
growth in headline income has not mirrored that achieved at operating income
level (20%) due to an increased tax charge and the effect of the partial
debenture redemption.
Net cash inflow from operating activities of R19,9 million (R46,5 million)
has been affected by an increase in net working capital associated with
growth in turnover and an increase in locally sourced raw materials at lower
prices but with less favourable payment terms.
Capital expenditure has increased during the period due to strategic
opportunities that have been identified in the packaging industry.
Prior year results have been restated as outlined below:
- The Astrapak Linked Unit Trusts have been consolidated as Special Purpose
Entities into the group results. This accounting treatment is in compliance
with AC 412.
- To achieve compliance with AC130, the group has raised a provision for
bonuses, which was previously expensed in the year that bonuses were paid.
Prospects
Recent events across the globe are sure to create uncertainty, both locally
and abroad. Fortunately, the recent weakening of the rand has been partially
compensated for by a decrease in the price of crude oil.
The Group is currently evaluating a number of large acquisition
opportunities which could necessitate capital raising. In addition, some
small niche investments are also being considered. Exports have grown by 69%
in the first six months and will remain a focus going forward.
We are hopeful that existing market conditions will remain unaffected for
the remainder of the financial year, in which case organic growth is
expected to increase.
Distribution to linked unitholders
A provision for debenture interest of R4,5 million has been made which
approximates the average prime-rate of interest for the period. Astrapak
anticipates making a combined distribution of debenture interest and a
dividend of approximately one-third of attributable profits before debenture
interest; this will be for the year ending 28 February 2002, payable during
May 2002.
Audit review
The interim results presented above have been reviewed, but not audited, by
Deloitte & Touche, the Group's auditors. Their limited review report is
available for inspection at the Group's registered office during normal
office hours.
Changes to the Board of Directors
H J Jacobs resigned with effect from 30 June 2001 and has taken up the
position of Managing Director of City Packaging (Pty) Ltd.
On behalf of the board
R A Upton R Crewe-Brown
Chairman Chief Executive Officer
Sandton
23 October 2001
Operating companies
Films Division
City Packaging (Proprietary) Limited
East Rand Plastics (Proprietary) Limited
Packaging Consultants (Proprietary) Limited
Pack-Line Holdings (Proprietary) Limited
Peninsula Packaging (Proprietary) Limited
Tristar Plastics (Proprietary) Limited
Rigids Division
Emcape Thermopak (Proprietary) Limited
International Edgeboard Technologies (Proprietary) Limited
International Tube Technologies (Proprietary) Limited
JJ Precision Plastics (Proprietary) Limited
PAK 2000 (Proprietary) Limited
Speciality Division
Astrapak Exports (Proprietary) Limited
Astrapak Flexible (Proprietary) Limited
Astra Repro (Proprietary Limited)
Diverse Labelling Consultants
(Proprietary) Limited
Packaging Converters (Proprietary) Limited
Saflite Cape (Proprietary) Limited
Tamperpak (Proprietary) Limited
Registered Office:
1st Floor Wierda Court,
Johan Avenue, Wierda Valley, Sandton.
PO Box 652740, Benmore, 2010,
South Africa. Tel: ++27 11 784 5577/8/9
Fax: ++27 11 784 1569.
Board of directors:
R A Upton*
(Chairman), R Crewe-Brown
(Chief Executive Officer),
R T Dalais*, D T du Toit, W F Hirzebruch*,
C A Jadwat*, G Petzer
*Non-executive
Registrar:
Computershare Services Limited, Edura,
41 Fox Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107.
Website: www.astrapak.co.za
