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Nampak Limited - Interim Report And Dividend Declaration For The Six Months
Ended 31 March 2002
Nampak Limited
(Registration number 1968/008070/06)
(Incorporated in the Republic of South Africa)
ISIN : ZAE 000004933
Share code : NPK
INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED
31 MARCH 2002
Group income statement Unaudited Audited
6 months ended year ended
31 March 30 Sept
2002 * 2001 Change 2001
Rm Rm % Rm
Revenue 6 079.7 5 163.7 17.7 10 474.3
------- ------- --------
Operating profit before
abnormal items (Note 1) 523.3 410.5 27.5 844.1
Abnormal items - trading
(Note 2) 6.1 65.6 158.2
------- ------ --------
Operating profit after
abnormal items (Note 3,4) 517.2 344.9 50.0 685.9
Net finance costs(Note 5) (45.5) (47.9) (71.0)
Investment income 2.3 - 2.5
------- ------ -------
Profit before taxation 474.0 297.0 59.6 617.4
Taxation 158.0 88.7 166.5
------- ------ -------
Profit after taxation 316.0 208.3 51.7 450.9
Share of associate
companies` profits - 0.4 -
Attributable to outside
shareholders in
subsidiaries 11.0 23.3 41.0
------- ------ -------
Attributable to
shareholders in Nampak
Limited (Note 6) 305.0 185.4 64.5 409.9
------- ------ -------
Number of ordinary shares
in issue (000) 509 426 509 357 509 406
Weighted average number of
ordinary shares on which
headline earnings and basic
earnings per share are
based (000) 509 420 509 354 509 361
Weighted average number of
ordinary shares on which
diluted headline earnings
and diluted basic earnings
per share are based (000) 511 229 509 354 509 361
Headline earnings per
ordinary share (cents) 56.7 35.8 58.4 85.8
------- ------- -------
Basic earnings per share
(cents) 59.9 36.4 64.6 80.5
Dividend per share (cents) 19.6 17.8 10.1 53.3
Fully diluted headline
earnings per share (cents) 56.5 35.8 57.8 85.8
------- ------- -------
Fully diluted earnings per
share (cents) 59.7 36.4 64.0 80.5
Determination of headline
earnings
Attributable profit for
the period per income
statement 305.0 185.4 409.9
Adjusted for (after tax):
Net (profit)/loss on sale
of assets/operations (7.1) (0.6) 0.5
Impairment loss - - 16.0
Net goodwill/(negative
goodwill) amortisation 1.8 (2.5) (4.2)
Provision for retrenchments (12.2) - 12.2
Loss on re-organisation of
debt 1.6 0.2 2.6
Headline earnings for the
period 289.1 182.5 58.4 437.0
------- ------ -------
Note : March 2001 and September 2001 comparatives have been restated for
changes in accounting policies.
* March 2001 restated for the deconsolidation of the Zimbabwe operations.
Group balance sheet
Unaudited Audited
6 months ended year ended
31 March 30 Sept
2002 * 2001 2001
Rm Rm Rm
Assets
Non-current assets 3 754.1 3 076.0 3 183.6
Property, plant and
equipment 3 502.8 3 039.8 3 116.6
Intangible assets 63.8 (116.7) (73.8)
Investments and loans to
subsidiaries 187.5 152.9 140.8
Current assets 4 199.5 3 359.2 4 109.8
Inventories 1 315.3 1 203.1 1 236.1
Trade and other receivables 1 920.9 1 578.1 1 862.6
Bank balances, deposits and cash
(Note 7) 963.3 578.0 1 011.1
------- ------- -------
Total assets 7 953.6 6 435.2 7 293.4
------- ------- -------
Equity and liabilities
Capital and reserves 2 757.2 2 293.6 2 533.0
Capital 357.7 357.2 357.6
Non-distributable reserves 112.6 (3.8) 12.6
Retained earnings 2 286.9 1 940.2 2 162.8
Outside shareholders 102.1 245.9 242.2
Non-current liabilities 1 607.2 1 587.5 1 665.9
Interest bearing debt (Note 7) 1 327.1 1 306.3 1 365.4
Deferred taxation 280.1 281.2 300.5
Current liabilities 3 487.1 2 308.2 2 852.3
Trade and other payables 2 316.4 1 764.2 2 249.0
Interest bearing debt (Note 7) 1 090.0 390.5 606.2
Taxation 80.7 62.8 (2.9)
Shareholders for dividend - 90.7 -
------- ------- -------
Total equity and liabilities 7 953.6 6 435.2 7 293.4
------- ------- -------
Gross borrowings : total
shareholders` funds 84.5% 66.8% 71.0%
Net borrowings : total
shareholders` funds 50.8% 44.1% 34.6%
Total liabilities : total
shareholders` funds 168.4% 142.3% 152.0%
Net worth per ordinary share
(cents) 541 450 497
Group statement of changes in equity
Unaudited Audited
6 months ended year ended
31 March 30 Sept
2002 * 2001 2001
Rm Rm Rm
Equity at beginning of period 2 533.0 2 436.0 2 436.0
Change in accounting policy (215.2) (215.2)
Changes in capital 0.1 0.1 0.5
Share capital 0.1 0.1 -
Share premium on new issue - - 0.5
Changes in non-distributable
reserves 100.0 (14.1) 2.1
Increase/(decrease) in foreign
currency translation reserve 100.0 (22.0) 2.1
Transfer from retained earnings - 7.9 -
Changes in retained earnings 124.1 86.8 309.6
Goodwill written off - - (0.7)
Subsidiaries not previously
consolidated - - (7.8)
Attributable profit for the year 305.0 185.4 409.9
Preference shares - dividends - - (0.1)
Ordinary shares - dividends (180.9) (90.7) (91.7)
Transfer to
non-distributable reserves - (7.9) -
Equity at the end of the period 2 757.2 2 293.6 2 533.0
------- ------- -------
Group cash flow statement
Unaudited Audited
6 months ended year ended
31 March 30 Sept
2002 * 2001 2001
Rm Rm Rm
Cash operating profit 767.4 574.6 1 187.7
Working capital changes (102.6) (295.3) (154.9)
Net interest paid (45.5) (47.9) (71.0)
Taxation paid (104.4) (160.4) (299.2)
------- -------- -------
Cash available from operations 514.9 71.0 662.6
Dividends paid (189.0) (180.8) (318.3)
------- -------- -------
Net cash inflow/(outflow) from
operating activities 325.9 (109.8) 344.3
Replacement capital expenditure (201.5) (75.2) (245.5)
Expansion capital expenditure (190.1) (120.2) (145.1)
Acquisition of businesses (275.7) - (35.0)
Proceeds on sale of fixed assets 70.1 18.0 69.6
Net cash outflow/inflow from
investing activities (18.9) (40.5) 3.7
------- -------- -------
Net cash outflow before
financing activities (290.2) (327.7) (8.0)
Net cash outflow from
financing activities - mainly
repayment of long term loans (338.7) (88.0) (200.9)
------- -------- -------
Net decrease in cash and cash
equivalents (628.9) (415.7) (208.9)
Cash and cash equivalents at
beginning of period 408.3 596.8 596.8
Translation of cash in foreign
subsidiaries 93.9 6.4 20.4
------- ------- -------
Cash and cash equivalents at end
of period (Note 7) (126.7) 187.5 408.3
------- ------- -------
Notes Unaudited Audited
6 months ended year ended
31 March 30 Sept
2002 * 2001 Change 2001
Rm Rm % Rm
1. Operating profit
before abnormal items
South Africa 428.2 339.2 26.2 732.0
Europe - Nampak plc 66.9 48.8 37.1 103.8
Nampak International Ltd
("NIL") (including Africa) 28.2 22.5 25.3 8.3
------- ------- -------
523.3 410.5 27.5 844.1
------- ------- -------
2. Abnormal items
Retrenchment and
restructuring costs 4.9 38.4 98.0
Product claims - 24.3 34.2
(Profit)/loss on disposal
of property (1.0) 1.5 0.8
Provision for discontinued
operation - 1.1 -
Impairment loss - - 21.5
Loss on re-organisation of
debt 2.2 0.3 3.7
------- ------- -------
6.1 65.6 158.2
------- ------- -------
3. Operating profit after
abnormal items
South Africa 423.3 276.3 53.2 577.5
Europe - Nampak plc 65.7 47.3 38.9 103.8
NIL (including Africa) 28.2 21.3 32.4 4.6
------- ------- -------
517.2 344.9 50.0 685.9
------- ------- -------
4. Reconciliation of
operating profit after
abnormal items
Operating profit as
previously reported 374.8 702.3
Deconsolidation of
Zimbabwe operations (24.7)
Change in accounting policy (5.2) (16.4)
------- -------
344.9 685.9
------- -------
5. Net finance costs
Interest paid (93.1) (83.7) (172.0)
Interest received 47.6 35.8 101.0
------- ------- -------
(45.5) (47.9) (71.0)
------- ------- -------
6. Reconciliation of
attributable profit
Attributable profit as
previously reported 205.8
Deconsolidation of
Zimbabwe operations (17.4)
Change in accounting
policy (3.0)
-------
185.4
-------
7. Cash and cash equivalents
Interest bearing debt (2 417.1) (1 696.8) (1 968.2)
Less long term liabilities 1 327.1 1 306.3 1 365.4
Bank balances, deposits
and cash 963.3 578.0 1 011.1
------- ------- -------
(126.7) 187.5 408.3
------- ------- -------
8. Change in accounting policy
Depreciation 7.9 7.7 16.4
Deferred taxation (2.4) (2.3) (4.9)
Prior year adjustment -
depreciation 307.4 307.4
-
deferred taxation (92.2) (92.2)
------- ------- -------
Net effect on reserves 5.5 220.6 226.7
------- ------- -------
9. Supplementary information
Depreciation 258.5 226.2 443.5
Capital expenditure 391.6 195.4 390.6
- replacement 201.5 75.2 245.5
- expansion 190.1 120.2 145.1
Capital commitments 324.0 143.6 350.6
- contracted 186.1 20.1 149.0
- approved not contracted 137.9 123.5 201.6
Lease commitments 221.1 200.4 264.8
- land and buildings 182.1 188.1 229.8
- other 39.0 12.3 35.0
Contingent liabilities 2.3 2.5 2.7
Segmental report after abnormal items
Revenue Operating profit after
abnormal items
Unaudited 6 Audited Unaudited 6 Audited
months to year ended months to year ended
March 30 Sept March 30 Sept
2002 * 2001 2001 2002 * 2001 2001
Rm Rm Rm Rm Rm Rm
METALS 1 808.0 1 593.3 3 096.8 199.5 141.1 203.5
Bevcan 842.9 760.8 1 455.0 74.5 76.6 109.1
Foodcan and
Divpac 636.5 611.1 1 181.7 82.5 59.4 82.8
Other 328.6 221.4 460.1 42.5 5.1 11.6
PAPER 1 801.6 1 596.0 3 342.7 131.2 83.4 241.9
Corrugated
and
Printpak 910.8 813.9 1 736.7 83.9 53.7 160.1
Tissue 454.3 402.4 853.4 29.9 10.7 37.9
Paper
Merchants396.4 344.3 681.9 16.4 15.8 31.5
Other 40.1 35.4 70.7 1.0 3.2 12.4
PLASTICS 2 302.2 1 923.8 3 864.5 116.0 68.1 159.7
Nampak
plc 1 271.0 971.6 1 982.4 65.7 47.3 103.8
Rotoflex and
Sacks 332.7 310.1 643.2 18.2 4.4 0.2
Petpak and
Liquid 332.8 322.3 615.6 16.1 15.4 39.4
Other 365.7 319.8 623.3 16.0 1.0 16.3
OTHER 167.9 50.6 170.3 70.5 52.3 80.8
Property
and
Treasury - - - 43.1 37.3 62.0
NamITech 199.5 105.2 256.5 19.5 15.3 37.3
NIL 84.6 60.9 124.5 27.2 18.2 (7.7)
Other (116.2) (115.5) (210.7) (19.3) (18.5) (10.8)
TOTAL 6 079.7 5 163.7 10 474.3 517.2 344.9 685.9
------- ------- ------- ----- ----- -----
GEOGRAPHICAL ANALYSIS
South
Africa 4 800.2 4 211.3 8 507.3 423.3 276.3 577.5
Nampak
plc 1 271.0 971.6 1 982.4 65.7 47.3 103.8
NIL
(incl
Africa) 124.7 96.3 195.3 28.2 21.3 4.6
Inter-
group
eliminations
(116.2) (115.5) (210.7)
------- ------- ------- ----- ----- -----
TOTAL 6 079.7 5 163.7 10 474.3 517.2 344.9 685.9
------- ------ ------- ----- ----- -----
INTRODUCTION
Nampak is the largest and most diversified packaging company in Africa,
producing packaging products from metal, paper, plastic and glass. It is
also a major manufacturer and distributor of tissue products and plays a
significant role in the paper merchanting market.
Nampak operates from manufacturing and distribution sites throughout South
Africa, certain African countries and has plastic blow moulding businesses
in Belgium, France, the Netherlands, Spain and the United Kingdom.
NamITech, a subsidiary company operating in the security sector of the IT
industry, provides leading-edge business solutions.
REVIEW OF RESULTS
The past six months was a most encouraging period for the group. For the
first time in some years, Nampak`s South African packaging divisions
achieved real growth estimated at 3%. A significant portion of this growth
can be attributed to the success of export drives by our South African
businesses and their customers. The weakening of the rand boosted the
turnover contribution from the European businesses and these factors,
together with price increases, led to a growth in turnover of 18%.
This growth, coupled with the benefits achieved following the extensive
restructuring programme carried out during the 2000/2001 year, resulted in a
50% increase in operating profit.
Net finance costs were R46m (2001: R48m), with interest cover improving to
11.4 times (2001: 7.2 times).
Minority interests reduced to R11m (2001: R23m) as a result of the purchase
of Crown Cork & Seal`s 15% interest in Crown Nampak, effective from 1
January 2002.
As a result, attributable profit increased by a very pleasing 65% and
headline earnings per share by 58%.
Cash flow for the half-year incorporates R392m capital expenditure
principally for the U.K. dairy in-plant operations and the pre-payment for a
significant upgrade of our IT systems. Payment for the Crown Nampak
minorities (R276m) and repayment of offshore debt (R339m) also took place
during this period. Proceeds from the sale of surplus assets, particularly
properties in the U.K., contributed R70m.
Despite this activity and the effect of the devaluation of the rand on the
U.K. debt, the balance sheet remains strong.
DIVISIONAL PERFORMANCE
Metals
The division showed good growth in operating profit, principally due to an
improvement in the Glass operation, and the benefits of the significant
restructuring exercises carried out at Divpac and Foodcan. Bevcan continued
to experience pressure on both margins and volumes and showed a marginal
decline in profit.
Paper
Corrugated and Printpak showed good growth in operating profits as a result
of cost and efficiency improvements in both divisions.
Tissue`s profitability increased significantly as pricing of raw materials
stabilised and efficiency gains materialised.
The results of Paper Merchants were satisfactory, given the highly
competitive environment.
Plastics
As expected, Nampak plc`s profits were marginally lower in sterling terms
than the corresponding period due to the increased costs associated with the
U.K. dairy in-plant installations.
Rotoflex and Sacks, with good growth in exports, substantially improved
profitability following the major restructuring and plant consolidation
programmes of last year.
Petpak and Liquid experienced pressure on raw material prices and volumes
but divisional consolidation assisted in supporting the operating profit.
L&CP, Megapak and Polyfoil improved profitability with Polyfoil, and
particularly L&CP, benefiting from significantly increased sales in direct
exports.
NamITech
NamITech showed some growth and has invested heavily in new products and
technologies that are expected to contribute strongly to their second half
results.
Other
Income from Property and Treasury was relatively stable for the first half
of the year, with some market-related rental increases, and some improved
income from forex and cash management.
Nampak International Limited ("NIL") incorporates the results of both Africa
and offshore treasury operations. The prior year has been adjusted for the
deconsolidation of income from our Zimbabwean interests.
CHANGES IN ACCOUNTING POLICIES
These results are prepared in accordance with South African Generally
Accepted Accounting Practice (SA GAAP), except for AC 116 for which final
actuarial valuations are in the process of preparation.
The comparatives have been amended to take account of changes in accounting
policies relating to Provisions (AC 130), Impairments (AC 128), Goodwill (AC
131) (2001) and Property Depreciation (AC 135) (2002).
MERGERS AND ACQUISITIONS
Shareholders have been advised of potential transactions with Malbak Limited
and Crown Cork & Seal`s Anglophone African operations.
The Malbak merger awaits approval from the Competition Tribunal and
shareholder approval. The Crown Cork acquisition is subject to certain
statutory approvals, and both are subject to SARB approval.
DIRECTORATE
During the period under review, Gavin Duffey retired as an executive
director after serving the group for twenty-five years. Due to his
extensive business commitments, Derek Cooper resigned after serving sixteen
years as a non-executive director. The board extends its thanks to both of
them for their valued contribution over many years.
PROSPECTS
Based on the benefits of last year`s restructuring and current volume
growth, the group expects that the performance achieved in the first half is
likely to be maintained for the full year.
DIVIDEND
The chairman`s statement for 2001 indicated that a return to the stated
dividend cover objectives would be achieved over time. As a consequence, a
dividend of 19.6 cents per share (+10.1%) has been declared, resulting in
the dividend cover moving back towards historic levels of 2.4 times.
DECLARATION OF ORDINARY DIVIDEND NO. 67
Notice is hereby given that interim ordinary dividend No. 67 of 19.6 cents
per share (2001: 17.8 cents) has been declared in respect of the six months
ended 31 March 2002, payable to shareholders recorded as such in the
register at the close of business on the record date, Friday 5 July 2002.
The last date to trade to participate in the dividend is Friday 28 June
2002. Shares will commence trading ex dividend from Monday 1 July 2002.
The important dates pertaining to this dividend are as follows :
Last date to trade ordinary shares
"CUM" dividend Friday 28 June 2002
Ordinary shares trade "EX" dividend Monday 1 July 2002
Record date Friday 5 July 2002
Payment date Monday 8 July 2002
Ordinary share certificates may not be dematerialised or rematerialised
between Monday 24 June 2002 and Friday 5 July 2002, both days inclusive.
On behalf of the board
T Evans Chairman
G E Bortolan Group managing director
17 May 2002
Directors: T Evans (Chairman), G E Bortolan (Group managing director), P L
Campbell*, B P Connellan*, N Cumming, D A Hawton*, M M Katz*, A S Lang
(British), A M Marthinusen, K M Mokoape*, M L 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: Computershare Investor Services Limited, 11 Diagonal
Street, Johannesburg 2001, South Africa.
(P O Box 1053, Johannesburg 2000, South Africa). Telephone: +27 11 370-
5000.
Date: 17/05/2002 01:42:00 PM Produced by the SENS Department
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