| Tue 4 May 2004, 17:19 | | Results For The Year Ended 29 February 2004 |
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Astrapak Limited - Reviewed Results For The Year Ended 29 February 2004
Release Date: 04/05/2004 16:31:01 Code(s): APK
Astrapak Limited - Reviewed Results For The Year Ended 29 February 2004
ASTRAPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/009169/06)
Share code: APK
ISIN: ZAE000030938
REVIEWED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2004
- Income before interest, taxation, depreciation and amortisation up 12%
- Headline earnings per linked unit up 26%
- Attributable income up 51%
- Return on equity of 39%
- Gearing down to 57%
CONSOLIDATED INCOME STATEMENTS
Audit reviewed
Actual Actual
(R "000) 2004 2003
Revenue 1 351 637 1 348 440
Cost of sales 901 202 945 517
Gross profit 450 435 402 923
Net operating expenses 220 230 197 143
Income before interest, taxation, 230 205 205 780
depreciation and amortisation
Depreciation 72 902 62 180
Amortisation of goodwill 3 828 3 607
Trading income 153 475 139 993
Exceptional item (1) 23 007 -
Operating income 176 482 139 993
Net interest paid 42 882 46 983
Income before debenture interest 133 600 93 010
Debenture interest 6 834 7 708
Income before taxation 126 766 85 302
Taxation 26 294 21 524
Income after taxation 100 472 63 778
Share of associates net income after 2 352 3 173
taxation
Income attributable to minority 11 620 6 644
shareholders
Attributable income 91 204 60 307
(1) Exceptional itemThe exceptional item represents the net gain from the
insurance claim relating to the fire that occurred at Cinqplast Plastop
(Proprietary) Limited, Bronkhorstspruit on 1 August 2003 and is made up of:
Profit on replacement of destroyed plant 24 507
and equipment
Profit provision for the loss of 5 223
turnover
Non-recurring costs associated with the (6 723)
fire
Earnings per linked unit (cents) 102,5 71,2
Attributable income 95,4 63,1
Debenture interest 7,1 8,1
Headline earnings per linked unit (cents) 93,0 73,8
Attributable income 85,9 65,7
Debenture interest 7,1 8,1
Headline earnings per linked unit - fully 81,0 67,5
diluted (cents)
Attributable income 73,9 59,4
Debenture interest 7,1 8,1
Number of linked units in issue (000"s) 95 608 95 608
Number of linked units in issue - fully 109 756 105 776
diluted (000"s)
Reconciliation between attributable
income and headline income
Attributable income 91 204 60 307
Debenture interest 6 834 7 708
Amortisation of goodwill 3 828 3 607
Net profit after tax and minorities on (12 942) (1 099)
disposal of property, plant and
equipment
Net profit on disposal of property, (24 616) (1 570)
plant and equipment
Taxation 7 385 471
Income attributable to minority 4 289 -
shareholders
Headline income 88 924 70 523
CONSOLIDATED BALANCE SHEETS
Audit reviewed
Actual Actual
(R "000) 2004 2003
Assets
Non-current assets 463 880 441 588
Property, plant and equipment 407 585 387 255
Deferred taxation 22 166 18 112
Goodwill 28 521 30 145
Loans and investments 5 608 6 076
Currents assets 473 639 467 171
Inventories 138 021 138 634
Trade and other receivables 263 294 219 074
Cash resources 72 324 109 463
Total assets 937 519 908 759
Equity and liabilities
Equity 331 969 248 681
Share capital 108 108
Retained income 298 172 214 991
Dividend reserve 6 215 3 442
Non-distributable reserves 2 878 5 347
Debentures 47 804 47 804
Treasury shares (23 208) (23 011)
Minority interest 55 301 46 014
Non-current liabilities 213 191 247 466
Long term interest-bearing debt 177 757 215 436
Deferred taxation 35 434 32 030
Current liabilities 337 058 366 598
Trade and other payables 245 315 209 408
Linked unitholders for debenture 6 834 7 708
interest
Short term interest-bearing debt 84 909 149 482
Total equity and liabilities 937 519 908 759
Additional information
Capital expenditure 97 546 108 992
Capital commitments
- contracted not spent 8 795 6 751
- authorised not contracted 31 992 441
Net asset value per linked unit (cents) 347 260
Net tangible asset value per linked unit 317 229
(cents)
Net interest bearing debt as a percentage 57 103
of equity (%)
Net interest bearing debt 190 342 255 455
Long term interest-bearing debt 177 757 215 436
Short term interest-bearing debt 84 909 149 482
Cash resources (72 324) (109 463)
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Audit reviewed
Actual Actual
(R "000) 2004 2003
Cash generated from operations 198 980 202 310
Reduction in working capital (16 067) (8 444)
Non cash transactions - profit on 27 116 1 570
disposal of assets
Net financing costs and taxation paid (65 501) (70 763)
Net cash inflow before distribution to 144 528 124 673
linked unitholders
Interest and dividend distribution to (10 350) (11 049)
linked unitholders
Net cash inflow from operating activities 134 178 113 624
Capital expenditure (97 546) (108 992)
Acquisition of subsidiaries and minority (2 753) (149 383)
interests
Proceeds on the disposal of assets 31 430 3 775
Cash outflow from investing activities (68 869) (254 600)
Net cash (outflow) / inflow from (28 486) 128 898
financing activities
Net increase / (decrease) in cash 36 823 (12 078)
equivalents
STATEMENT OF CHANGES IN EQUITY
Audit reviewed
Actual Actual
(R "000) 2004 2003
Equity as at 1 March 246 873 193 823
Equity as previously reported 248 681 200 052
Adoption of AC133 - Financial (1 808) -
instruments: Recognition and measurement
Depreciation of investment properties (AC - (6 229)
135)
Attributable income 91 204 60 307
Transfer to deferred tax asset (1 337) (1 336)
Decrease in foreign currency translation (1 132) -
reserve
Acquisition of treasury shares (197) (671)
Ordinary dividends paid to linked (3 442) (3 442)
unitholders
Equity as at 28/29 February 331 969 248 681
SEGMENTAL ANALYSIS
(R "000) Films Rigids Flexibles Group
Revenue - 2004 618 781 483 350 249 506 1 351 637
Revenue - 2003 579 877 515 237 253 326 1 348 440
Trading income - 2004 61 145 75 804 16 526 153 475
Trading income - 2003 50 835 58 529 30 629 139 993
Depreciation - 2004 23 429 37 665 11 808 72 902
Depreciation - 2003 21 019 33 398 7 763 62 180
Capital expenditure - 18 317 50 744 28 485 97 546
2004
Capital expenditure - 27 381 45 887 35 724 108 992
2003
Total assets - 2004 370 308 412 205 155 006 937 519
Total assets - 2003 358 140 376 029 174 590 908 759
Total liabilities - 2004 204 574 242 072 103 603 550 249
Total liabilites - 2003 222 348 276 557 115 159 614 064
COMMENTARY
Astrapak Limited ("Astrapak" or "the Group") manufactures and supplies a wide
range of plastic packaging products. The Group has manufacturing facilities in
all the main centres of South Africa and a joint venture in Mauritius.
The operations are grouped into three divisions, namely Films, Rigids and
Flexibles and service principally the pharmaceutical, personal care, food and
beverage, agricultural, industrial and retail markets.
Astrapak has, since inception, invested in businesses that are market leaders or
have significant technological advantages to exploit the global move towards
plastic packaging. The Group focuses on service, innovation and technology in
order to achieve superior returns and growth in earnings for linked unitholders.
Message to linked unitholders
Astrapak remains focused on exploiting the innovation-led growth in plastic
packaging, which it believes will continue to gain an increasing share of the
packaging market. The Group plans to expand through continued organic and
acquisitive growth, as well as through the implementation of new and
opportunistic business initiatives.
Fire at Bronkhorstspruit plant
As previously reported, the damage caused by the fire at Cinqplast-Plastop
Bronkhorstspruit was extensive. The move to a new world-class facility will be
completed by June 2004.
Despite the consequent loss of revenue and contribution as a result of the fire
the Group"s income before interest, taxation, depreciation and amortisation
increased by 12% over the prior year. The Group was adequately insured for such
eventualities and the ultimate result on headline earnings for the year was
minimal.
Insurers made interim payments totalling R47m (including VAT) for the year under
review and the balance sheet includes a sundry debtor amount of R20m for
outstanding claims of which R8,5m has subsequently been received.
The prompt action taken by management, staff, insurers, landlord and service
providers is greatly appreciated and has minimised any inconvenience to both
customers and other stakeholders.
Financial Results
AC133 financial instruments: recognition and measurement has been adopted for
the year under review. The impact of this change was not material.
Trading conditions for the year under review were affected by the strength of
the Rand because of a reduction in indirect exports and import substitution of
our customers" products.
Volume growth was 3% despite sales being comparable to the previous year. The
turnover loss occasioned by the fire, which is part of the insurance claim,
would have increased sales for the current year by 1,1% compared with February
2003.
Increased production efficiencies and tight financial controls resulted in
trading margins rising from 10,4% to 11,4% with an increase in trading income of
10% compared with the previous year. Net cash from operating activities
increased from R113,6m to R134,2m.
Capital and related investment expenditure incurred during the year amounted to
R97,5m. Of this amount R13,6m was for asset replacements arising from the fire
and R14,6m invested to fund the start-up of business operations in the barrier
films sector. The balance of the amount was incurred in both replacement and
expansion projects in the Group"s existing business. Depreciation increased by
R10,7m over the prior year to R72,9m.
The balance sheet has been strengthened with a marked improvement resulting from
improved working capital controls (not withstanding approximately R41 m of non-
trading assets included in trade and other receivables), leading to net debt
decreasing by R65m to R190m (R255m) and net debt to linked unit holders funds
declining from 103% to 57%. As a result of reduced interest rates and interest
bearing debt, interest paid reduced to R42,9m (R47,0m).
An effective taxation rate of 20,7% (25,2%) was mainly due to the utilisation of
Government incentives and tax losses in the Group.
The net result is an increase in the Group"s attributable income of 51% and 26%
in headline earnings per linked unit over the prior year.
Prospects
Astrapak is well poised to take advantage of the numerous opportunities existing
in the South African packaging market. The low interest and inflationary
environment is expected to strengthen demand in all the segments of the markets
served by the Group. Despite the strengthening of the Rand, the Group"s
commitment to its export programmes remain strong.
Recent increases in raw material prices will put some pressure on margins, but
despite this, management remain confident for the year ahead.
Post balance sheet events
With effect from 1 March 2004 the following events have taken place:
A further 20% of the share capital of Master Plastics (Pty) Ltd was acquired,
bringing the total holding to 95%.
80% of the share capital of Marcom Plastics (Pty) Ltd, a manufacturer of thin
walled injection moulded products, was acquired.
49% of the share capital of Knilam Packaging (Pty) Ltd, a manufacturer of
modified atmosphere packaging for fresh fruit and vegetables, was acquired.
25% plus 1 share of the share capital of Pak 2000 (Pty) Ltd was sold to
facilitate an empowerment transaction in this company.
The above resulted in an investment of R63m.
JSE Securities Exchange South Africa ("JSE") Requirements
The directors of the company ensured compliance with the JSE Listing
Requirements during the year under review.
Basis of accounting
These consolidated, audit reviewed results for the year were drawn up in
compliance with South African Statements of Generally Accepted Accounting
Practice and presented in accordance with statement AC127 on interim financial
reporting and the company has complied with the requirements of the Companies
Act 1973 (Act 61 of 1973) as amended.
Accounting policies
The accounting policies as set out in the 2003 annual report have been
consistently applied in producing these results.
Review by independent auditors
The Group"s auditors, Deloitte & Touche, have reviewed these year-end results.
Their unqualified review report is available for inspection at the Group"s
registered office during normal office hours.
Distribution to linked unitholders
Notice is hereby given that debenture interest of 7,1 cents (8,1 cents) per
linked unit totalling R6,8m (R7,7m) will be paid. The interest payment
approximates the average prime rate of interest for the financial year ended 29
February 2004. In addition, Astrapak will be paying an ordinary dividend of 6,5
cents (3,6 cents) per linked unit totalling R6,2m (3,4m) to linked unitholders
for the year ended 29 February 2004. The total combined dividend and debenture
interest will be 13,6 cents ( 11,7 cents) per linked unit totalling R13m
(R11,1m).
Both distributions will be payable on Monday, 31 May 2004 to linked unitholders
recorded in the register on Friday, 28 May 2004. The last date to trade cum-
distribution will be Friday, 21 May 2004 and the linked units will commence
trading ex-distribution on Monday, 24 May 2004. Linked unit certificates may
not be dematerialised or rematerialised between Monday, 24 May 2004 and Friday,
28 May 2004 both days inclusive.
Changes to the board of directors
Appointments:
Mr P C Botha on 23 September 2003.
Resignations:
Mr W F Hirzebruch on 11 July 2003.
Acknowledgements
The Board would like to express its appreciation to management and staff for
their efforts during the year, which has been a significant factor in the
successful results achieved by the Group.
For and on behalf of the Board
R Crewe-Brown H A Todd
(Chief Executive Officer) (Financial Director)
Sandton
4 May 2004
Board of directors:
RA Yotib* (Chairman) R Crewe-Brown (Chief Executive Officer) M Baglione, RT
Dalais*, WF Hirzebruch*, WJ Venter*, G Petzer, HA Todd.
*Non-executive
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
Registrar:
Computershare Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Website: www.astrapak.co.za
