| Wed 13 Oct 2004, 9:34 | | RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2004 |
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ASTRAPAK LIMITED - UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2004
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 2004
Revenue up 11%
EBIDTA up 14%
Attributable income up 44
HEPLU up 26%
ROE of 32%
CONSOLIDATED INCOME STATEMENTS
Actual Actual
(R `000) 2004 2003
Revenue 761 980 685 451
Cost of sales 519 861 472 377
Gross profit 242 119 213 074
Net operating expenses 117 884 103 704
Income before interest, taxation, depreciation 124 235 109 370
and amortisation
Depreciation 41 022 35 411
Amortisation of goodwill 2 333 1 915
Trading income 80 880 72 044
Exceptional item (1) 4 671 1 269
Operating income 85 551 73 313
Net interest paid 21 627 24 690
Income before debenture interest 63 924 48 623
Debenture interest 2 685 3 915
Income before taxation 61 239 44 708
Taxation 13 561 8 845
Income after taxation 47 678 35 863
Share of associates net income after taxation 1 415 795
Income attributable to minority shareholders 2 592 4 326
Attributable income 46 501 32 332
Headline income 47 151 38 087
(1) Exceptional item 4 671 1 269
The exceptional item is made up of:
Gain on disposal of empowerment 9 171 -
shareholding in PAK 2000
Impairment of asset (4 500) -
Net gain on insurance relating to - 1 269
Bronkhorstspruit fire
Earnings per linked unit (cents) 52,2 37,9
Attributable income 49,4 33,8
Debenture interest 2,8 4,1
Headline earnings per linked unit (cents) 50,0 39,8
Attributable income 47,2 35,7
Debenture interest 2,8 4,1
Headline earnings per linked unit
- fully diluted (cents) 44,1 36,0
Attributable income 41,3 31,9
Debenture interest 2,8 4,1
Number of linked units in issue (000`s) 94 217 95 608
Number of linked units in issue
- fully diluted (000`s) 106 882 105 776
Reconciliation between attributable income and
headline income
Attributable income 46 501 32 332
Debenture interest 2 685 3 915
Amortisation of goodwill 2 333 1 915
Net profit after tax and minorities on
disposal of property, plant and equipment (743) (75)
Net gain on disposal of empowerment
shareholding in PAK 2000 (7 900) -
Impairment of asset after minorities 4 275 -
Headline income 47 151 38 087
CONSOLIDATED BALANCE SHEETS
Actual Actual
(R `000) 2004 2003
Assets
Non-current assets 532 008 450 166
Property, plant and equipment 440 759 392 821
Deferred taxation 27 318 20 031
Goodwill 34 574 30 444
Loans and investments 29 357 6 870
Currents assets 461 910 440 626
Inventories 160 240 129 471
Trade and other receivables 249 608 216 547
Cash resources 52 062 94 608
Total assets 993 918 890 792
Equity and liabilities
Equity 353 948 275 495
Share capital 108 108
Retained income 344 673 245 915
Non-distributable reserves 2 307 4 679
Debentures 46 762 47 804
Treasury shares (39 902) (23 011)
Minority interest 21 665 48 607
Non-current liabilities 187 159 226 017
Long term interest-bearing debt 145 932 197 178
Deferred taxation 41 227 28 839
Current liabilities 431 146 340 673
Trade and other payables 275 567 234 921
Linked unitholders for debenture interest 2 685 3 915
Short term interest-bearing debt 152 894 101 837
Total equity and liabilities 993 918 890 792
Additional information
Capital expenditure 64 787 45 099
Capital commitments
- contracted not spent 17 448 6 174
- authorised not contracted 16 386 4 128
Net asset value per linked unit (cents) 376 288
Net tangible asset value per linked unit 339 256
(cents)
Net interest bearing debt as a percentage of 70 74
equity (%)
Net interest-bearing debt 246 764 204 407
Long term interest-bearing debt 145 932 197 178
Short term interest-bearing debt 152 894 101 837
Cash resources (52 062) (94 608)
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Actual Actual
(R `000) 2004 2003
Cash generated from operations 122 061 110 425
Reduction in working capital 8 180 27 323
Non cash transactions - profit on disposal of 1 087 107
assets
Net financing costs and taxation paid (25 110) (30 843)
Net cash inflow before distribution to linked 106 218 107 012
unitholders
Interest and dividend distribution to linked (13 849) (11 149)
unitholders
Net cash inflow from operating activities 92 369 95 863
Capital expenditure (64 787) (45 099)
Acquisition of subsidiaries and minority (60 273) (3 947)
interests
Proceeds on the disposal of assets 1 950 4 228
Cash outflow from investing activities (123 110) (44 818)
Net cash outflow from financing activities (60 527) (13 060)
Net (decrease)/increase in cash equivalents (91 268) 37 985
STATEMENT OF CHANGES IN EQUITY
Actual Actual
(R `000) 2004 2003
Equity as at 1 March 331 969 247 273
Equity as previously reported 331 969 248 681
Adoption of AC133 - Financial instruments:
Recognition and measurement - (1 408)
Attributable income 46 501 32 332
Transfer to deferred tax asset (571) (668)
Acquisition of treasury shares and debentures (17 736) -
Ordinary dividends paid to linked unitholders (6 215) (3 442)
Equity as at 31 August 353 948 275 495
SEGMENTAL ANALYSIS
(R `000) Films Rigids Flexibles Group
Revenue - 2004 343 463 298 015 120 502 761 980
Revenue - 2003 290 159 275 624 119 668 685 451
Trading income - 2004 28 914 42 310 9 656 80 880
Trading income - 2003 24 396 35 768 11 880 72 044
Depreciation - 2004 13 219 21 941 5 862 41 022
Depreciation - 2003 11 387 18 494 5 530 35 411
Capital expenditure - 15 720 47 973 1 094 64 787
2004
Capital expenditure - 9 527 23 859 11 713 45 099
2003
Total assets - 2004 380 160 469 199 144 559 993 918
Total assets - 2003 349 310 385 933 155 549 890 792
Total liabilities - 257 325 274 729 86 251 618 305
2004
Total liabilities - 190 259 270 805 105 626 566 690
2003
Group profileAstrapak 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 - 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 unitholdersThe Group 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, and plans to expand through
continued organic and acquisitive growth, as well as through the implementation
of new and opportunistic business initiatives.
Financial resultsThe trading period under review was characterised by the strong
Rand, rising raw material prices and a growing demand for packaging in the local
economy. These conditions were favourable for certain divisions in the Group,
the exception being Flexibles, which continued to suffer the effects of the
strong Rand through reduction in indirect exports and import substitution of
customers` products.
Overall sales grew by 11.2% partly driven by volume increases of 5.5% and also
selling price increases due to increased raw material costs. The acquisition of
Marcom Plastics (Pty) Limited also gave a positive boost to sales.
EBITDA increased from R109.4m to R124.2m (13.6%), as a result of improved
performance in many areas of the Group including the Cinqplast-Plastop Denver
operation. Depreciation increased by 15.8% to R41.0m, partly due to capital
expenditure incurred, but also because of the assets replaced (R22m) at
Cinqplast-Plastop Bronkhorstspruit as a consequence of the fire in August 2003.
As a result, trading income increased by 12.2% to R80.9m (R72.1m), yielding an
increased margin of 10.6% (10.5%).
Two exceptional items occurred during the reporting period:As previously
reported, the Group sold 25% (plus 1 share) of Pak 2000 (Pty) Limited to
facilitate an empowerment transaction. This resulted in a profit of R9.2m.
A ground disturbance caused damage to two buildings on the Cinqplast-Plastop
Denver site. No disruption to production has been recorded. The relevant assets
have been impaired by R4.5m.
Net cash from operating activities was R92.4m and together with increased
borrowings of R56.4m, was utilised to:
- Acquire minorities interests in Master Plastics and Thermopac for R47.7m.
- Capital expenditure of R64.7m, including replacement of assets damaged in
the fire of R22m.
- Purchase of 2.874m Astrapak linked units for R19.6m.
- Acquisition of 49% of Knilam Packaging for R9.8m.
- Acquisition of 50% of Marcom Plastics for R4.5m.
The above mentioned transactions have resulted in an increase in net-interest
bearing debt from R204.4m (at year-end) to R246.7m. Despite this increase in net
debt, net interest paid has reduced by 12% to R21.6m (R24.7m) due to reduced
interest rates and improved treasury management.
During the period under review, we have maintained our focus on working capital
management. We have seen an increase in raw material prices as a result of the
increase in the oil price and this has resulted in a corresponding increase in
the carrying value of our inventories.
Trade and other receivables includes R20m of non-trade items (insurance claim
and property development costs). This includes an amount of R8.2 million which
relates to the insurance claim in respect of the Bronkhorstspruit fire. The
Group has no reason to believe that these amounts will not be collected in the
next few months.
An effective tax rate of 22.1% (19.8%) resulted from the utilisation of
government incentives and tax losses within the Group. Capital gains tax on the
sale of shares in Pak 2000 (Pty) Limited has been provided.
Headline earnings per linked unit increased by 25.6% to 50.0 cents (39.8 cents).
Black Economic EmpowermentFurther to the cautionary announcement on 22nd
September 2004, there are ongoing discussions with a potential Black Economic
Empowerment partner and an announcement in this regard should be made shortly.
ProspectsFurther increases in raw material prices are expected in the second
half of the year, coupled with potential shortages of certain raw materials, due
to the explosion at Sasol`s polyethylene plant. We believe that the contingency
plans we have adopted will limit any negative effect on headline earnings in the
second half of the year.
Demand for packaging remains strong in the local market as a result of the
stable Rand and low interest rates.
JSE Securities Exchange South Africa (`JSE`) requirementsThe directors of the
company ensured compliance with the requirements of the JSE Listing Requirements
during the year under review.
Basis of accountingThese consolidated results for the six months ended 31 August
2004 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 policiesThe accounting policies as set out in the 2004 Annual Report
have been consistently applied in producing these results.
Distribution to linked unitholdersA provision for debenture interest of R2.7m
has been made, which approximates the average prime rate of interest for the six
months ended 31 August 2004. Debenture interest for the full year ending 28
February 2005 will be declared and is payable in May 2005.
AcknowledgementsThe Board would like to express its appreciation to management
and staff for their efforts during the period, which has been a significant
factor in the successful results achieved by the Group.For and on behalf of the
BoardR Crewe-Brown H A Todd(Chief Executive Officer)
(Financial Director)
Sandton
13 October 2004
Registered Office:1st Floor Wierda Court,Johan Avenue, Wierda Valley, Sandton.PO
Box 652740, Benmore, 2010.South Africa. Tel: ++27 11 784 5577/8/9Fax: ++27 11
784 1569.
Board of directors:R A Upton* (Chairman)R Crewe-Brown (Chief Executive Officer)M
Baglione, R T Dalais*, P C Botha*,W J Venter, G Petzer, H A Todd.*Non-executive
Registrar:Computershare Investor Services 2004 (Pty) LimitedGround Floor, 70
Marshall Street, Johannesburg, 2001.PO Box 61051, Marshalltown, 2107Website:
www.astrapak.co.za
