| Tue 7 May 2002, 0:00 | | Astrapak Limited - Annual Results 28 February 2002 |
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ASTRAPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/009169/06)
JSE Share code: APK ISIN: ZAE000030938
ANNUAL RESULTS 28 FEBRUARY 2002
* Revenue up 17%
* Operating income up 17%
* Headline earnings per linked unit up 20%
* Return on equity of 35.1%
* 41.56 cents distributed to linked unit holders
* Major acquisition to be approved
CONSOLIDATED INCOME STATEMENTS
Audited Audited
R 000's 2002 2001
Revenue 816 247 697 418
Cost of sales 572 098 478 746
Gross profit 244 149 218 672
Net operating expenses 164 259 150 310
Operating income before interest
and taxation 79 890 68 362
Net interest paid 13 942 13 790
Income before debenture interest 65 948 54 572
Distribution to linked unitholders
- debenture interest 7 607 11 311
Income before taxation 58 341 43 261
Taxation 11 597 7 605
Income after taxation 46 744 35 656
Aborted bid costs - 701
Share of associates net income
after taxation 2 286 1 170
Income attributable to
minority shareholders 3 569 1 377
Attributable income 45 461 34 748
Headline income 54 768 47 196
Earnings per linked unit (cents) 54.7 45.9
Attributable income (cents) 46.9 34.6
Debenture interest (cents) 7.8 11.3
Headline earnings
per linked unit (cents) 56.5 47.1
Attributable income (cents) 48.6 35.8
Debenture interest (cents) 7.8 11.3
Weighted average number of
linked units in issue (000's) 96 953 100 322
Reconciliation between attributable
income and headline income
Attributable income 45 461 34 748
Debenture interest 7 607 11 311
Loss on disposal of property 560 0
Amortisation of goodwill 1 140 1 137
Headline income 54 768 47 196
CONSOLIDATED BALANCE SHEETS
Audited Audited
R000's 2002 2001
Assets
Non-current assets 222 072 208 169
Property, plant and equipment 191 632 179 805
Deferred taxation 16 527 15 635
Goodwill 9 080 10 184
Loans and investments 4 833 2 545
Currents assets 281 665 249 605
Inventories 95 597 73 102
Trade and other receivables 138 977 112 120
Cash resources 47 091 64 383
Total assets 503 737 457 774
Equity and liabilities
Capital and reserves (Equity) 146 610 107 151
Share capital 108 108
Retained income 158 717 116 911
Non-distributable reserves 6 684 8 020
Dividends reserve 3 442 0
Treasury shares (22 341) (17 888)
Debentures 47 804 78 008
Linked unitholders' funds 194 414 185 159
Minority interest 18 659 15 169
Non-current liabilities 89 225 53 561
Long-term interest-bearing debt 68 367 35 254
Deferred taxation 20 858 18 307
Current liabilities 201 439 203 885
Trade and other payables 162 508 129 353
Linked unitholders for
debenture interest 7 607 11 311
Short-term interest-bearing debt 31 324 63 221
Total equity and liabilities 503 737 457 774
Additional information
Capital commitments (Rm)
- contracted not spent 10.6 0.4
- authorised not contracted 2.5 8.0
Finance and operating
lease commitments (Rm) 52.5 18.5
Net asset value per linked unit (cents) 201 185
Net interest bearing debt
as a percentage of
linked unitholders funds (%) 27 18
Net interest bearing debt (R000's) 52 600 34 092
Long term interest bearing debt 68 367 35 254
Short term interest bearing debt 31 324 63 221
Cash resources 47 091 64 383
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Audited Audited
R 000's 2002 2001
Cash generated from operations 111 074 95 138
Investment in working capital (17 211) 17 751
Non cash transactions (114) (194)
Net financing costs and taxation paid (24 495) (22 271)
Net cash inflow before distribution to
linked unitholders (69 254) 90 424
Interest distribution to
linked unitholders (11 311) (13 916)
Net cash inflow from
operating activities 57 943 76 508
Capital expenditure (52 536) (30 399)
Acquisition of minority interests
and subsidiaries (36) (12 700)
Proceeds on the disposal of assets 10 779 3 313
Cash outflow from investing activities (41 793) (39 786)
Net cash outflow from
financing activities (14 314) (32 671)
Net decrease in cash equivalents 1 836 4 051
STATEMENT OF CHANGES IN EQUITY
Audited Audited
R 000's 2002 2001
Equity as at 1 March 107 151 76 016
Non-distributable reserve (1 336) (1 338)
Attributable income for the year 45 461 34 748
Acquisition of treasury shares (4 453) (2 102)
Net ordinary dividends paid (213) (173)
Equity as at 28 February 146 610 107 151
SEGMENTAL ANALYSIS
R 000's Films Rigids Speciality Group
Revenue - 2002 499 993 134 141 182 113 816 247
Revenue - 2001 432 457 107 019 157 942 697 418
Operating income before
interest and taxation - 2002 35 512 18 830 25 548 79 890
Operating income before
interest and taxation - 2001 34 489 11 424 22 449 68 362
Depreciation - 2002 18 047 6 741 5 255 30 043
Depreciation - 2001 15 875 5 850 4 616 26 341
Capital expenditure - 2002 26 461 22 019 4 056 52 536
Capital expenditure - 2001 15 753 6 807 7 839 30 399
Total assets - 2002 296 906 93 196 113 635 503 737
Total assets - 2001 287 699 68 447 101 628 457 774
Total liabilities - 2002 182 894 48 913 58 857 290 664
Total liabilites - 2001 177 023 29 561 50 862 257 446
GROUP PROFILE
Astrapak Limited ("Astrapak" or "the Group") is focused on the
manufacture and supply of plastic packaging products. The Group comprises 18
operating entities spread across the main centres of South Africa including
a joint venture in Mauritius and employs more than 1 900 people. The
companies are grouped into three divisions, namely Films, Rigids, and
Speciality products; focusing on supplying specialised packaging into the
food, beverage, confectionery, agricultural, consumer, petrochemical,
pharmaceutical, textile, and industrial markets. The Group 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 products and services to customers in
order to achieve superior return on equity and growth in earnings for linked
unit holders.
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 for
the group rose significantly.
This period was also characterised by volatile and increasing oil prices
and slowing consumer demand which had severe impact on the Group's operating
performance.
Astrapak's strategy in these circumstances was to seek and develop a
number of small and medium sized ventures, maintain the high quality of its
manufacturing capacity and maximise cash flows in order to reduce debt.
The Group has evaluated various capital allocation opportunities and
balanced these to achieve an optimal result for linked unit holders for the
period under review. This evaluation has resulted in the following capital
allocation:
* R52.5 million for plant replacement as well as expansionary capital
expenditure;
* R32.4 million for partial debenture redemption.
* R5.3 million for share buy backs (1 891 424 linked units representing
1,75% of the linked units in issue).
These steps, together with the improving market conditions, have sparked
a positive cycle of investor interest, which has resulted in an increase in
the price, and tradability of the linked unit.
In the light of the cost of debt, relative to cost of equity, the company
has chosen not to raise equity capital in the past three years. Given the
recent improvement in the linked unit price, the Group will continue to
evaluate the optimal funding balance between debt and equity.
Astrapak has achieved real growth, with revenue increasing by 17%, which
included substantial volume growth as a result of increased market share.
Growth in revenue during the second half of the year was 14% (compared to
20% in the first half), illustrating the slow down in local and global
economies following events in the United States of America and the Middle
East from September 2001.
Operating income increased by 18% to R79.9 million during the year,
resulting in an increased margin of 9.8% (prior year 9.7%).
Headline earnings per linked unit increased by 20% to 56.55 cents (47.04
cents) due to solid trading performance, lower interest charge, stable
effective tax rate, good results from an equity accounted associate and
reduced number of linked units due to buy-backs under taken during the year
in terms of a general authority.
The Group achieved a return on net tangible asset value of 35.1% (30.0%).
ACQUISTIONS AND DEVELOPMENTS
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 unit holders 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 unit holders registered
on 1 June 2001, amounting to R32.4 million. The partial redemption was
funded from banking facilities.
Astrapak has also negotiated the purchase of a further 47,5% shareholding
of Emcape Thermopak (Proprietary) Limited ("Emcape") for R12 million with
effect from 1 April 2002. The purchase consideration has been settled in
cash. Astrapak now owns 92.5% of Emcape. The effective date of the
acquisition will be 1 April 2002.
Concurrent with the announcement of these results, Astrapak has announced
its intention to purchase 75% of the issued share capital of Master Plastics
(Proprietary) Limited for a purchase consideration of R123.75 million.
Readers are referred to this announcement appearing today, which also
contains the relevant pro-forma information. Should this transaction be
approved it will have a material impact on the nature, size and scope of the
Astrapak group and the announcement should be read in conjunction with this
information to gain a better appreciation of Astrapaks' prospects.
Comparative numbers included the results of Pack-Line Holdings
(Proprietary) Limited for eight months from 1 July 2000 (the date of
acquisition).
FINANCIAL RESULTS
Group revenue increase by 17% to R816.3 million (R697.4 million),
attributable to:
Pricing increase 8%
Volume growth 8%
Acquisitive growth 1%
Operating income has increased by 18% to R79.9 million (R67.7 million)
yielding an improved operating margin of 9.8% (9.7%) despite increased raw
material pricing pressure. Improved margins may be attributed to tight
control of operating and administrative overheads.
Notwithstanding the borrowings associated with the partial redemption
(totalling R32.4 million) and other capital expenditure programs, net
financing costs have increased marginally to R13.9 million (R13.8 million).
Income tax has increased to R11.6 million (R7.6 million). The effective
tax rate for the Group is 19.9% (17.6%). The Group still has significant
unutilised tax losses for setoff in future years.
Net cash inflow from operating activities of R57.9 million (R76.5
million) has been affected by an increase in net working capital associated
with growth in turnover and strategic purchasing of raw material at year
end.
Capital expenditure increased during the financial year due to strategic
opportunities that were identified for the Group's activities.
PROSPECTS
The depreciation of the Rand against major currencies towards the end of
last year and the increased price of crude oil have had an inflationary
effect on imported goods, particularly raw materials, plant and equipment.
The success of the year ahead will be determined by continuing consumer
demand and Astrapak's ability to increase efficiencies and recovery of raw
material price increases.
JSE SECURITIES EXCHANGE SOUTH AFRICA ("JSE") REQUIREMENTS
The directors of the company ensured compliance with the requirements of
the JSE Listings Requirements during the year under review.
BASIS OF ACCOUNTING
These consolidated, abridged annual financial statements were drawn up in
compliance with South African Statements of Generally Accepted Accounting
Practice and the company has complied with the requirements of the Companies
Act 1973 (Act 61 0f 1973) as amended.
ACCOUNTING POLICIES
The accounting policies as set out in the 2001 annual report have been
consistently applied in producing the results.
DISTRIBUTION TO LINKED UNITHOLDERS
Notice is hereby given that a distribution of debenture interest of 7.96
cents per linked unit (totalling R7.6 million) has been declared. The
distribution approximates the average prime rate of interest for the
financial year ended 28 February 2002. In addition, Astrapak will pay an
ordinary dividend of 3.60 cents per link unit (totalling R3.4 million) to
linked unit holders for the year ended 28 February 2002. The total combined
dividend and debenture interest will be 11.56 cents per linked unit
(totalling R11.05 million).
Both distributions will be payable on Monday the 3rd of June 2002 to linked
unit holders recorded in the register on Friday the 31st of May 2002. The
last date to trade cum-distribution will be Friday the 24th of May 2002 and
the linked units will commence trading ex-distribution on Monday the 27th of
May 2002. Linked unit certificates may not be dematerialised or
rematerialised between Monday the 20th of May 2002 and Friday the 31st of
May 2002, both days inclusive.
CHANGES TO BOARD OF DIRECTORS
H A Todd was appointed with effect from 6 December 2001 and has taken up
the position of Financial Director.
