| Thu 28 Nov 2002, 18:08 | | Nampak Limited - Group Results And Dividend Declar |
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Nampak Limited - Group Results And Dividend Declaration
Nampak Limited
(Registration number 1968/008070/06)
(Incorporated in the Republic of South Africa)
ISIN CODE : ZAE000004933
SHARE CODE : NPK
AUDITED GROUP RESULTS FOR THE YEAR ENDED
30 SEPTEMBER 2002
GROUP INCOME STATEMENT
2002 2001 Change
Notes Rm Rm %
Revenue 13 684.7 10 474.3 30.7
Profit before abnormal items 1 1 256.1 853.2 47.2
Abnormal items 2 (97.8) (158.2)
Profit from operations 3 1 158.3 695.0 66.7
Net finance costs 5 122.9) (71.0)
Income from investments 2.6 2.5
Profit before tax 1 038.0 626.5 65.7
Income tax (352.2) (166.2)
Profit after tax 685.8 460.3 49.0
Minority interest 28.7 41.0
Net profit for the year 657.1 419.3 56.7
Number of ordinary shares
in issue (000) 640 178 509 406
Weighted average number of
ordinary shares on which headline
earnings and basic earnings per
share are based (000) 531 237 509 361
Weighted average number of
ordinary shares on which diluted
headline earnings and diluted basic
earnings per share are based (000) 534 617 509 361
Headline earnings per ordinary
share (cents) 138.6 87.6 58.2
Basic earnings per share (cents) 123.7 82.3 50.3
Dividend per share (cents) 60.6 53.3 13.7
Fully diluted headline earnings
per share (cents) 137.7 87.6 57.2
Fully diluted earnings per
share (cents) 122.9 82.3 49.3
Determination of headline earnings
Net profit for the year
per income statement 657.1 419.3
Adjustment for :
Impairment losses 86.0 22.9
Goodwill written off 13.9 (4.7)
Provision for retrenchments 11.6 17.4
Net (profit)/loss on sale
of assets/operations (46.6) 0.8
Loss on re-organisation of debt 4.5 3.7
Tax effects 9.7 (13.5)
Headline earnings for the year 736.2 445.9 65.1
Note: Comparatives have been restated for
the changes in accounting policies.
GROUP BALANCE SHEET
2002 2001
Notes Rm Rm
Assets
Non-current assets 6 372.0 3 144.3
Property, plant and
equipment 5 075.8 3 045.8
Intangible assets 1 145.8 (29.2)
Investments and associates 150.4 127.7
Current assets 6 872.7 4 122.9
Inventories 2 142.7 1 236.1
Trade and other receivables 3 116.4 1 875.7
Bank balances, deposits
and cash 6 1 613.6 1 011.1
Total assets 13 244.7 7 267.2
Equity and liabilities
Capital and reserves 4 814.8 2 627.6
Capital 2 031.4 357.6
Non-distributable reserves 185.0 48.7
Accumulated profits 2 598.4 2 221.3
Minority interest 100.7 239.9
Non-current liabilities 2 327.8 1 567.0
Interest bearing debt 6 1 879.1 1 365.4
Net long-term retirement
benefit obligation 64.5 (130.0)
Deferred tax liabilities 384.2 331.6
Current liabilities 6 001.4 2 832.7
Trade and other payables
and provisions 3 920.8 2 229.4
Interest bearing debt 1 897.3 606.2
Net tax liabilities/(assets) 183.3 (2.9)
Total equity and liabilities 13 244.7 7 267.2
Total borrowings : total
shareholders` funds 77% 69%
Net borrowings : total
shareholders` funds 44% 33%
Total liabilities:
shareholders` funds 221% 168%
Net worth per ordinary
share (cents) 752 516
GROUP STATEMENT OF CHANGES IN EQUITY
Notes 2002 2001
Rm Rm
Equity at beginning of year 2 627.6 2 436.0
Change in accounting policies 7 (166.1)
Changes in capital 1 673.8 0.5
Share capital 6.5 -
Share premium on new issue 1 667.3 0.5
Changes in non-distributable
reserves 136.3 38.2
Increase in foreign
currency translation reserve 136.3 38.2
Changes in accumulated profit 377.1 319.0
Goodwill reversal/(written off) 6.2 (0.7)
Subsidiaries not previously
consolidated (3.2) (7.8)
Net profit for the year 657.1 419.3
Preference shares - dividends (0.1) (0.1)
Ordinary shares - dividends (282.9) (91.7)
Equity at the end of year 4 814.8 2 627.6
GROUP CASH FLOW STATEMENT
2002 2001
Notes Rm Rm
Cash operating profit 1 819.0 1 185.2
Working capital changes (66.5) (154.9)
Net interest paid (122.9) (71.0)
Income from investments 2.6 2.5
Tax paid (299.0) (299.2)
Cash available from operations 1 333.2 662.6
Dividends paid (308.8) (318.3)
Net cash inflow from operating
activities 1 024.4 344.3
Net cash outflow from investing
activities (939.4) (352.3)
Net cash inflow/(outflow)
before financing activities 85.0 (8.0)
Net cash outflow from
financing activities (463.4) (200.9)
Net decrease in cash
and cash equivalents (378.4) (208.9)
Cash and cash equivalents
at beginning of year 403.8 596.8
Translation of cash in foreign
subsidiaries 92.0 20.4
Cash and cash equivalents at
end of year 6 121.9 408.3
NOTES
2002 2001 Change
Rm Rm %
1. Profit before abnormal items
South Africa 1 068.6 732.1 46.0
Africa 20.9 12.3 69.9
Europe 166.6 108.8 53.1
1 256.1 853.2 47.2
2. Abnormal items
Retrenchment costs (15.8) 98.0)
Restructuring costs* (36.2) -
Product claims - (34.2)
Impairment losses** (86.0) (21.5)
Net profit/(loss) on disposal
of property and business 44.7 (0.8)
Loss on re-organisation of debt (4.5) (3.7)
(97.8) (158.2)
* Restructuring costs relate to the duplication costs associated with the in-
plants in Nampak plc.
** Provision for impairment relates to non-consolidated investments in Zimbabwe
operations.
3. Profit from operations
South Africa 1 063.2 581.3 82.9
Africa 20.9 12.3 69.9
Europe* 74.2 101.4 (26.8)
1 158.3 695.0 66.7
* The decline in operating profit is due to the impairment provision against
investments in Zimbabwe. Investments in Zimbabwe operations are held through
the European subsidiary.
4. Reconciliation of net profit for the year
Net profit as previously reported 421.4
Prior year adjustments:
- Property depreciation (17.1)
- Retirement benefits 9.8
- Deferred tax 5.2
419.3
5. Net finance costs
Interest paid (283.7) (172.0)
Interest received 160.8 101.0
(122.9) (71.0)
6. Cash and cash equivalents
Interest bearing debt (3 776.4) (1 971.6)
Less: long-term liabilities 1 879.1 1 365.4
Less: short-term portion of
long term liabilities 405.6 3.4
Bank balances, deposits and cash 1 613.6 1 011.1
121.9 408.3
7. Prior year adjustment - changes
in accounting policies
Accumulated profit as previously reported 2 068.4
Changes in accounting policies (166.1)
- Property depreciation (333.0)
- Retirement benefits 89.5
- Deferred tax 75.1
- Minority interest 2.3
1 902.3
8. Supplementary information
Depreciation 556.5 461.1
Capital expenditure 784.4 390.6
- expansion 391.7 145.1
- replacement 392.7 245.5
Capital commitments 540.1 350.6
- contracted 174.2 149.0
- approved not contracted 365.9 201.6
Lease commitments 591.7 264.8
- land and buildings 508.3 229.8
- other 83.4 35.0
Contingent liabilities* 147.9 2.7
* Includes a put option in favour of
Fasic Africa (Pty) Ltd for R126m
exercisable if Kimberly-Clark Corporation
USA exits South Africa before 31 March
2004 subject to certain exit conditions.
The directors have assessed the financial
performance of Kimberly-Clark Southern Africa
(Pty) Ltd and are satisfied that an exercise
of the put option is remote. Also includes
a guarantee in respect of a property lease
for R19m.
SEGMENTAL REPORT (AFTER ABNORMAL ITEMS)
Revenue Profit from
operations
2002 2001 Change 2002 2001 Change
Rm Rm % Rm Rm %
CLUSTER ANALYSIS
Metals 3 330.0 2 762.0 20.6 392.7 205.0 91.6
Paper 4 637.8 3 342.7 38.7 393.3 241.8 62.7
Plastics 4 900.5 3 880.9 26.3 288.2 166.5 73.1
NamITech 469.7 256.5 83.1 43.6 37.3 16.9
Other* 346.7 232.2 49.3 40.5 44.4 (8.8)
TOTAL 13 684.7 10 474.3 30.7 1 158.3 695.0 66.7
GEOGRAPHICAL ANALYSIS
South Africa10 446.8 8 507.2 22.8 1 063.2 581.3 82.9
Africa 205.5 70.8 190.3 20.9 12.3 69.9
Europe* 3 256.4 2 106.9 54.6 74.2 101.4 (26.8)
Intergroup
eliminations (224.0) (210.6)
TOTAL 13 684.7 10 474.3 30.7 1 158.3 695.0 66.7
* The decline in operating profit
is due to the impairment losses
against investments in Zimbabwe.
Investments in Zimbabwe
operations are held through the
European subsidiary.
NAMPAK PROFILE
Following the various transactions concluded during the year, Nampak is Africa`s
largest packaging manufacturer with 135 operations on the continent. It is the
most diversified packaging company in the world producing a wide range of
products from metal, paper, plastic and glass. Exports from the South African
operations go to 64 countries around the globe.
In South Africa, Nampak is also the largest manufacturer of tissue paper
products and holds a substantial share of the paper merchanting market.
NamITech is the group`s technology subsidiary offering secure solutions to
customers in the telecommunications and financial services industries and to
large corporates.
In Europe, Nampak operates from a further 37 locations in 7 countries and is one
of the largest converters of high-density polyethylene. It is the leading
supplier of plastic milk bottles in the United Kingdom and is one of the top 6
manufacturers of folding cartons in Europe with strong market positions in some
niche segments such as healthcare.
KEY EVENTS OF 2002
During the year, the group completed several significant transactions that
substantially repositioned the group for future growth.
In January 2002 the 15% minority interest in Crown Nampak (South Africa) owned
by Crown Cork & Seal of the USA was purchased for R275 million.
In line with our stated strategy of expanding in Africa, the group purchased the
Anglophone African interests of Crown Cork & Seal in August 2002. These
businesses operate in Kenya, Nigeria, Tanzania and Zimbabwe and are
predominantly in the metals sector.
NamITech purchased the interests of two minority shareholders in subsidiary
company, Integrated Card Technology, for R107 million. In addition, NamITech
recently concluded a major empowerment alliance with Pamodzi Investment Holdings
taking a 28% stake in that company, raising the total empowerment shareholding
in NamITech to 30%.
The merger with Malbak was effective from 7 August 2002 and the integration of
the business is proceeding well. The transaction was financed through the issue
of 130 million Nampak shares and payment of R290 million cash and included
goodwill of R964 million. As part of the fair value exercise, restructuring
provisions of R123.9 million were raised to cover plant and other
rationalisations in South Africa and the U.K. These provisions include the
write-off of IT systems and equipment that will not be required by the merged
group.
Shortly after year-end, the healthcare division of M.Y. Holdings purchased a
small folding cartons company in Ireland.
REVIEW OF RESULTS
2001 was a period of major restructuring for the group, and this resulted in a
much lower cost base in South Africa for the 2002 year. The benefits of that
restructure, supported by some volume growth, mainly derived from exports,
contributed substantially to increased earnings. Group revenue including
acquisitions increased 31% to R13.7 billion (2001: R10.5 billion) and operating
profit after abnormal items rose 67% to R1.2 billion (2001: R695 million).
The abnormal items consist principally of restructuring costs in the U.K.
associated with the installation of in-plant bottle manufacturing lines at major
dairies and the impairment loss of R86 million on the Zimbabwean investments.
The profit on surplus property disposals in the U.K. partially offset these
costs. In terms of AC116, R6 million after tax was charged to profit in the
U.K. to compensate for a shortfall in funding in the defined benefit pension
schemes at Nampak Europe. This shortfall is entirely due to the
underperformance of global equity markets, and could reverse in the future.
These schemes are closed to new entrants.
Net finance costs rose to R122.9 million (2001: R71.0 million) as a result of
increased borrowings and increased South African interest rates during the
second half of the year. Interest cover, however, was at an acceptable 9 times.
Headline earnings per share rose 57.2% to 137.7 cents per share on a fully
diluted basis. Headline earnings per share rose 58.2% to 138.6 cents per share.
Both figures take account of the increased number of shares in issue, following
the Malbak merger.
The balance sheet remains strong, with operations generating cash of R1.3
billion, 101% improvement on 2001. After the Malbak merger and all other
acquisitions, the group closed the year 44% net geared.
GEOGRAPHIC PERFORMANCE
South Africa
All businesses benefited from the extensive cost reduction drive and factory
rationalisation that took place in 2001. Costs were reduced, productivity
improved and higher volumes led to better capacity utilisation resulting in all
operations increasing profitability.
Packaging volumes in the group are estimated to have grown by 3.2%, buoyed by
strong direct and indirect exports, which together are estimated to account for
28% of total packaging sales.
NamITech experienced slower demand during the year from the cellular
telecommunications industry in South Africa but demand in the rest of Africa was
strong.
Revenue, after inclusion of the acquisitions, increased by 23% to R10.5 billion
and operating profit by 83% to R1.1 billion. The operating margin improved from
6.8% to 10.2% and good control resulted in working capital decreasing from 14.3%
to 12.9% of sales.
Rest of Africa
The inclusion of the Crown Cork & Seal Anglophone African operations resulted in
revenue more than doubling, however, operating profits did not increase
commensurately due to lower rand profits from Malawi and systems integration
costs in the newly acquired operations.
Europe
The European packaging industry remained highly competitive due to industry
overcapacity.
Increased costs associated with the U.K. dairy in-plant installations, a charge
for pension funding and profit on the sale of properties, affected profits in
the rigid plastics business.
A weaker rand and the inclusion of M.Y. Holdings for 2 months resulted in
revenue increasing by 55% to R3.3 billion. Excluding the R86 million impairment
of investments in Zimbabwe, operating profit rose by 58% to R160 million.
CHANGES IN ACCOUNTING POLICIES
The group prepares its annual financial statements in accordance with South
African Statements of Generally Accepted Accounting Practice. During the year
the group changed its accounting policies in respect of Investment Property (AC
135) and Employee Benefits (AC 116).
Comparatives have been restated accordingly.
AUDITED RESULTS
The results have been audited by Deloitte & Touche and their unqualified audit
opinion and the annual financial statements are available for inspection at the
registered office of the company.
PROSPECTS
Next year will primarily be a year of consolidation and integration of the
merged and acquired businesses.
The South African operations will continue to benefit from last year`s profit
improvement initiatives and together with the inclusion of Malbak are expected
to show satisfactory earnings growth.
NamITech is forecasting continued improvement in revenue and a strong growth in
profits.
Profits from the rest of Africa are expected to show a substantial increase
following the acquisition of the Crown Cork & Seal`s operations.
In Europe a significant increase in both revenue and profits is expected as a
result of the inclusion of M.Y. Holdings for a full year.
Overall, following the strong recovery this year, it is anticipated that further
real headline earnings growth per share will be achieved next year.
DECLARATION OF ORDINARY DIVIDEND NO. 68
In the previous year the dividend was maintained despite the lower level of
profitability. It is pleasing to note that the group is progressing towards its
stated target of 2.4 times dividend cover with the cash dividend cover this year
rising to 2.2 times.
Notice is hereby given that a final ordinary dividend No.68 of 41.0 cents per
share (2001: 35.5 cents) has been declared in respect of the year ended 30
September 2002, payable to shareholders recorded as such in the register at the
close of business on the record date, Friday 10 January 2003, making a total
distribution for the year of 60.6 cents (2001: 53.3 cents). The last date to
trade to participate in the dividend is Friday 3 January 2003. Shares will
commence trading "ex" dividend from Monday 6 January 2003.
The important dates pertaining to this dividend are as follows:
Last date to trade ordinary shares "cum" dividend Friday 3 January 2003
Ordinary shares trade "ex" dividend Monday 6 January 2003
Record date Friday 10 January 2003
Payment date Monday 13 January 2003
Ordinary share certificates may not be dematerialised or re-materialised between
Monday 6 January 2003 and Friday 10 January 2003, both dates inclusive.
On behalf of the board
T Evans Chairman
G E Bortolan Group managing director
28 November 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*, J A Monks (British), M L Ndlovu*, J W
C Sayers, R G Tomlinson, M H Visser*, R A Williams*.
Alternate directors: P A de Weerdt, C J Miller, 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
Transfer secretaries: Computershare Investor Services Limited, 70 Marshall
Street, Johannesburg 2001, South Africa. (P O Box 62053, Marshalltown 2107,
South Africa). Telephone: +27 11 370-5000.
Website : www.nampak.co.za
Date: 28/11/2002 02:47:57 PM Produced by the JSE SENS Department
