| Tue 10 May 2005, 8:42 | | Results For The Year Ended 28 February 2005 |
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Astrapak Limited - Reviewed Results For The Year Ended 28 February 2005
ASTRAPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/009169/06)
Share code APK
ISIN ZAE000030938
- Revenue up 22%
- EBITDA up 20%
- Cash flow from operations up 41%
- Gearing down to 30%
- Headline earnings per linked unit up 28%
- Annualised return on equity 37%
- 20% investment in Astrapak Limited by Royal Bafokeng Nation
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2005
CONSOLIDATED INCOME STATEMENTS
Audit Reviewed
Actual Actual
(R`000) 2005 2004
Revenue 1 650 227 1 351 637
Cost of sales 1 129 054 901 202
Gross profit 521 173 450 435
Net operating expenses 244 833 220 230
Income before interest, taxation, 276 340 230 205
depreciation and amortisation
Depreciation 89 963 72 902
Amortisation of goodwill 4 666 3 828
Trading income 181 711 153 475
Exceptional item (1) 12 783 23 007
Operating income 194 494 176 482
Net interest paid 41 129 42 882
Income before debenture interest 153 365 133 600
Debenture interest 5 883 6 834
Income before taxation 147 482 126 766
Taxation 32 662 26 294
Income after taxation 114 820 100 472
Share of associates net income after taxation 2 885 2 352
Income attributable to minority shareholders 5 828 11 620
Attributable income 111 877 91 204
Headline income 113 532 88 924
(1) Exceptional item 12 783 23 007
The exceptional item is made up of:
Gain on disposal of empowerment 9 171 -
shareholding in PAK 2000
Impairment of asset (4 388) -
Profit on replacement of destroyed plant 8 000 24 507
and equipment
Profit provision for the loss of turnover - 5 223
Non-recurring costs associated with the - (6 723)
fire
Earnings per linked unit (cents) 123.8 102.5
Attributable income 117.6 95.4
Debenture interest 6.2 7.1
Earnings per linked unit full diluted (cents) 107.9 90.2
Attributable income 101.7 83.1
Debenture interest 6.2 7.1
Headline earnings per linked unit (cents) 119.3 93.0
Attributable income 113.1 85.9
Debenture interest 6.2 7.1
Headline earnings per linked unit 103.2 81.0
- fully diluted (cents)
Attributable income 97.0 73.9
Debenture interest 6.2 7.1
Number of linked units in issue (000`s) 95 158 95 608
Number of linked units in issue
- fully diluted (000`s) 110 018 109 756
Reconciliation between attributable income
and headline income
Attributable income 111 877 91 204
Debenture interest 5 883 6 834
Amortisation of goodwill 4 666 3 828
Net profit after tax and minorities on (5 381) (24 616)
disposal of property, plant and equipment
Net profit after tax on disposal of 25% (9 171) -
investment in PAK 2000
Net profit after tax on exercise of options (41) -
Net cost after tax and minorities on 4 388 -
impairment of assets
Tax effect 1 438 7 385
Attributable to minorities (127) 4 289
Headline income 113 532 88 924
CONSOLIDATED BALANCE SHEETS
Audit reviewed
Actual Actual
(R`000) 2005 2004
Assets
Non-current assets 568 237 463 880
Property, plant and equipment 477 241 407 585
Deferred taxation 32 111 22 166
Goodwill 42 086 28 521
Loans and investments 16 799 5 608
Currents assets 540 560 473 639
Inventories 186 960 138 021
Trade and other receivables 255 376 263 294
Cash resources 98 224 72 324
Total assets 1 108 797 937 519
Equity and liabilities
Linked unitholders` funds 498 803 331 969
Share capital and share premium 84 437 108
Retained income 410 049 298 172
Dividend reserves - 6 215
Non-distributable reserves 858 2 878
Treasury shares (48 950) (23 208)
Ordinary shareholders` funds 446 394 284 165
Debentures 52 409 47 804
Minority interest 23 535 55 301
Non-current liabilities 194 200 213 191
Long term interest-bearing debt 145 058 177 757
Deferred taxation 49 142 35 434
Current liabilities 392 259 337 058
Trade and other payables 281 077 245 315
Linked unitholders for debenture interest 5 883 6 834
Short term interest-bearing debt 105 299 84 909
Total equity and liabilities 1 108 797 937 519
Additional information
Capital expenditure 155 173 97 546
Capital commitments
- contracted not spent 19 641 8 795
- authorised not contracted 4 245 31 992
Net asset value per linked unit (cents) 524 347
Net tangible asset value per linked unit 480 317
(cents)
Net interest bearing debt as a percentage of 30 57
equity (%)
Net interest-bearing debt 152 133 190 342
Long term interest-bearing debt 145 058 177 757
Short term interest-bearing debt 105 299 84 909
Cash resources (98 224) (72 324)
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Audit reviewed
Actual Actual
(R`000) 2005 2004
Cash generated from operations 289 123 198 980
Decrease/(increase) in working capital 3 367 (16 067)
Non cash transactions - (profit)/loss on (9 538) 27 116
disposal of assets and investments
Net financing costs and taxation paid (80 437) (65 501)
Net cash inflow before distribution to linked 202 515 144 528
unitholders
Interest and dividend distribution to linked (13 049) (10 350)
unitholders
Net cash inflow from operating activities 189 466 134 178
Capital expenditure (155 173) (97 546)
Acquisition of subsidiaries and minority (34 022) (2 753)
interests
Proceeds on the disposal of assets and 24 252 31 430
investments
Cash outflow from investing activities (164 943) (68 869)
Net cash outflow from financing activities (8 214) (28 486)
Net increase in cash equivalents 16 309 36 823
STATEMENT OF CHANGES IN EQUITY
Audit reviewed
Actual Actual
(R`000) 2005 2004
Equity as at 1 March 331 969 246 873
Equity as previously reported 331 969 248 681
Adoption of AC133 - Financial instruments:
Recognition and measurement - (1 808)
Attributable income 111 877 91 204
Transfer to deferred tax asset (1 337) (1 337)
Decrease in foreign currency translation (683) (1 132)
reserve
Issue of shares at a premium 84 329 -
Issue of debentures 4 605 -
Acquisition of treasury shares (25 742) (197)
Ordinary dividends paid to linked unitholders (6 215) (3 442)
Equity as at 28/29 February 498 803 331 969
SEGMENTAL ANALYSIS
(R `000) Films Rigids Flexibles Group
Revenue - 2005 735 307 648 169 266 751 1 650 227
Revenue - 2004 620 677 483 350 247 610 1 351 637
Trading income - 2005 63 907 94 051 23 753 181 711
Trading income - 2004 59 198 75 804 18 473 153 475
Depreciation - 2005 27 588 50 216 12 159 89 963
Depreciation - 2004 23 854 37 665 11 383 72 902
Capital expenditure - 2005 23 681 117 708 13 784 155 173
Capital expenditure - 2004 32 939 50 744 13 863 97 546
Total assets - 2005 441 593 503 125 164 079 1 108 797
Total assets - 2004 387 511 412 205 137 803 937 519
Total liabilities - 2005 273 226 218 690 94 543 586 459
Total liabilities - 2004 219 291 242 072 88 886 550 249
COMMENTARY
Group Profile
Astrapak Limited (`Astrapak` or `the Group`) manufactures and distributes an
extensive 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 benefit from 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
The Group remains focused on 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.
Financial Results
The year under review was characterised by a strong Rand, a volatile oil price
and buoyant local consumer demand. On balance these conditions were favourable
for most of the Group`s operating entities.
Turnover increased by 22,1%, driven primarily by the partial recoupment of
increased raw material and overhead costs. Volume growth accounted for 5,7% and
2,1% was due to the acquisition of Marcom Plastics (Proprietary) Limited and
Knilam Packaging (Proprietary) Limited.
The Group reported EBITDA of R276.3m (R230.2m). This translated into 16,7%
(17,0%) of revenue which was a 20,0% increase over the prior year. The
depreciation charge increased 23,4% to R90.0m (R72.9m). This was largely as a
result of the assets replaced (R33m) at Cinqplast-Plastop Bronkhorstspruit as a
consequence of the fire in August 2003. Trading income increased by 18,4% to
R181.7m (R153.5m), but operating margin before exceptional items reduced from
11,3% to 11,0%.
Three exceptional items occurred during the reporting period:
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 minor 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 R4.4m.
The treatment of payments from insurance underwriters resulted in a positive
variance of R8m for the period under review.
Net interest paid of R41.1m (R42.9m) was marginally lower than the prior year.
This occurred despite a drop in interest rates, the strong cash generations from
operations of R289.1m (R199.0m) and the receipt of R92m from Royal Bafokeng
Finance (Proprietary) Limited (RBF) on 1 February 2005. The above-mentioned
inflows were offset by the following outflows:
R47.7m to acquire minority interests in Master Plastics and Thermopac.
R12.2m to acquire 70% of Knilam Packaging.
R4.5m to acquire 50% of Marcom Plastics.
R28.1m for a buy-back of 3.1m Astrapak linked units.
R122m in respect of capital expenditure mainly for expansion.
R33m in respect of the replacement of assets damaged in the Bronkhorstspruit
fire.
The resultant effect on net interest bearing debt was a reduction of R38.2m from
R190.3m in 2004 to R152.1m, the net interest bearing debt equity ratio reducing
from 57% to 30%.
An effective tax rate of 22,1% (20,7%) resulted from the utilisation of
government incentives and tax losses within the Group.
Headline earnings per linked unit increased by 28,3% to 119.3 cents (93.0
cents).
Black Economic Empowerment
As announced on 27 October 2004, RBF and Astrapak agreed that RBF, a wholly
owned subsidiary of the Royal Bafokeng Nation, would acquire 12.012m linked
units in Astrapak for a total consideration of R92m and were granted an option
to acquire a further 15.014m linked units in Astrapak after February 2005. This
option was exercised, resulting in a subscription of 15.014m linked units for a
total subscription price of R125m. This transaction represents 20% of the issued
linked units of Astrapak.
Prospects
Demand for packaging remains strong in the local market as a result of the
favourable consumer spending patterns and low interest rates.
The subscription funds received from RBF (R217m) together with the proven cash
flow generation of the Group will, inter alia, enable the financing of further
growth.
Post Balance Sheet Events
On 1 March RBF exercised their rights to purchase a further 15.014m linked units
for R125m.
Astrapak purchased 100% of Hilfort Plastics (Proprietary) Limited for a maximum
consideration of R85m.
Astrapak purchased the remaining minority interest (2,5%) in Thermopac
(Proprietary) Limited.
JSE Securities Exchange South Africa (`JSE`) Listings Requirements
The directors of the company ensured compliance with the requirements of the JSE
Listing Requirements during the year under review.
Basis of Accounting
These consolidated 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 2004 annual report have been
consistently applied in producing these results. The Group adopted International
Financial Reporting Standard IFRS3, accounting for business combinations,
resulting in goodwill no longer being amortised with effect from 1 April 2004.
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 offices during normal office hours.
Distribution to Linked Unitholders
Notice is hereby given that debenture interest of 6.2 cents (7.1 cents) per
linked unit totalling R5.9m (R6.8m) will be paid. The interest payment
approximates the average prime rate of interest for the financial year ended 28
February 2005. In addition, Astrapak will be paying an ordinary dividend of 16.5
cents (6.5 cents) per linked unit totalling R20.0m (R6.2m) to linked unitholders
for the year ended 28 February 2005. The total combined debenture interest and
dividend distribution will be 22.7 cents (11.7 cents) per linked unit totalling
R25.9m (R13.0m).
Both distributions will be payable on Monday, 6 June 2005 to linked unitholders
recorded in the register on Friday, 3 June 2005. The last day to trade cum-
distribution will be Friday, 27 May 2005 and the linked units will commence
trading ex-distribution on Monday, 30 May 2005. Linked unit certificates may not
be dematerialised or rematerialised between Monday, 30 May 2005 and Friday, 3
June 2005, both days inclusive.
Changes to the Board of Directors
Appointments:
Mr M Diedloff on 12 January 2005
Mr T Kgage on 1 March 2005
Mr C Molefe on 1 March 2005
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
10 May 2005
OPERATING ENTITIESFILMS DIVISIONBarriers Film ConvertorsCity PackEast Rand
PlasticsPackaging ConsultantsPack-Line HoldingsPeninsula PackagingTristar
PlasticsRIGIDS DIVISIONCinqpetCinqplast PlastopInternational Edgeboard
TechnologiesInternational Tube TechnologiesJJPrecision PlasticsMarcom
PlasticsPAK 2000Plastop (KwaZulu-Natal)ThermopacFLEXIBLES DIVISIONAstrapak
FlexibleAstraflexAstra ReproDiverse Labelling ConsultantsKnilam PackagingSaflite
(Cape)Standard Labels (Mauritius)TamperpakRegistered 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)RCrewe-Brown (Chief Executive Officer)M Baglione, RTDalais*, P
CBotha*, WJVenter, GPetzer, H A Todd,
M Diedloff, T Kgage, C Molefe*Non-executiveRegistrar:Computershare Investor
Services 2004 (Pty) LimitedGround Floor, 70 Marshall Street, Johannesburg,
2001.PO Box 61051, Marshalltown, 2107Website: www.astrapak.co.za
