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APK
APK
Astrapak - Unaudited Results For The Six Months Ended 31 August 2006
ASTRAPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/009169/06)
(Share code: APK)
(ISIN: ZAE000030938)
("Astrapak")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2006
- Revenue up 12%
- EBITDA up 7%
- Profit for the period up 7%
- Headline earnings per linked unit up 6%
Condensed consolidated income statements
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 August 31 August 28 February
(R"000) 2006 2005 2006
Revenue 996 745 891 293 1 873 962
Cost of sales 736 296 652 407 1 376 059
Gross profit 260 449 238 886 497 903
Other operating income 9 048 11 563 19 044
Distribution and selling costs 83 689 72 369 149 923
Administrative and other
expenses 82 583 78 074 148 884
Share of results of associates 1 534 1 407 3 530
Profit from operations 104 759 101 413 221 672
Investment income 368 3 580 3 665
Finance costs 19 799 22 408 40 865
Profit before taxation 85 328 82 585 184 472
Taxation 18 268 19 900 36 859
Profit for the period 67 060 62 685 147 613
Attributable to:
Linked unitholders of
the parent 62 830 59 355 139 001
Minority interest 4 230 3 330 8 612
Profit for the period 67 060 62 685 147 613
Earnings per linked
unit (cents) 54,6 53,1 122,5
Attributable income 51,9 49,8 116,6
Debenture interest 2,7 3,3 5,9
Earnings per linked unit -
fully diluted (cents) 50,6 48,6 111,8
Attributable income 47,9 45,3 105,9
Debenture interest 2,7 3,3 5,9
Weighted number of linked
units in issue (000"s) 121 065 119 127 119 187
Weighted number of linked
units in issue -
fully diluted (000"s) 131 284 131 122 131 272
Reconciliation between profit
attributable to linked
unitholders of the parent
and headline earnings
Profit attributable to equity
holders of the parent 62 830 59 355 139 001
Debenture interest 3 458 3 979 6 984
Net loss after tax on exercise
of options 3 217 1 562 2 289
Net (profit)/loss on disposal
of property, plant and
equipment (173) (850) 1 773
Tax effect 50 246 (71)
Attributable to minorities 10 50 (2)
Headline earnings 69 392 64 342 149 974
Headline earnings per linked
unit (cents) 57,3 54,0 125,9
Attributable income 54,6 50,7 120,0
Debenture interest 2,7 3,3 5,9
Headline earnings per linked
unit - fully diluted (cents) 52,8 49,0 114,3
Attributable income 50,1 45,7 108,4
Debenture interest 2,7 3,3 5,9
Reconciliation between profit
from operations and EBITDA
Profit from operations 104 759 101 413 221 672
Depreciation 52 262 45 349 102 070
Amortisation of intangibles - - 18
Earnings before interest,
taxation, depreciation and
amortisation (EBITDA) 157 021 146 762 323 760
Condensed consolidated balance sheets
Unaudited Unaudited Audited
31 August 31 August 28 February
(R"000) 2006 2005 2006
Assets
Non-current assets 865 444 680 510 764 323
Property, plant and equipment 698 152 586 192 615 821
Deferred taxation 50 868 30 149 41 017
Goodwill and trademarks 97 500 46 608 90 228
Loans and investments 18 924 17 561 17 257
Currents assets 827 279 640 409 690 916
Inventories 314 732 220 207 245 192
Trade and other receivables 395 731 297 160 301 268
Cash resources 116 816 123 042 144 456
Total assets 1 692 723 1 320 919 1 455 239
Equity and liabilities
Total equity 740 575 650 709 731 739
Share capital and share premium 199 502 201 602 199 502
Retained income 555 729 440 856 523 109
Non-distributable reserves (653) 628 17
Capital reserve* 6 911 4 243 5 331
Treasury shares (106 772) (71 943) (79 450)
Ordinary shareholders" funds 654 717 575 386 648 509
Debentures 59 708 59 771 59 616
Equity attributable to linked
unitholders of the parent 714 425 635 157 708 125
Minority interest 26 150 15 552 23 614
Non-current liabilities 301 020 207 859 222 795
Long-term interest-bearing debt 205 326 145 852 144 371
Deferred taxation 95 694 62 007 78 424
Current liabilities 651 128 462 351 500 705
Trade and other payables 419 599 342 779 372 272
Linked unitholders for
debenture interest 3 235 3 147 6 260
Short term interest-bearing
debt 228 294 116 425 122 173
Total equity and liabilities 1 692 723 1 320 919 1 455 239
*Capital reserve
The capital reserve has arisen due to the adoption of IFRS 2 and relates to
employee share options valued using the Black Scholes method.
Additional information
Capital expenditure 72 023 109 915 183 863
Capital commitments
- contracted not spent 78 031 33 415 21 265
- authorised not contracted 4 757 140 20 998
Net asset value per linked
unit (cents) 590 533 594
Net tangible asset value per
linked unit (cents) 510 494 518
Net interest-bearing debt
as a percentage of equity (%) 44 22 17
Net interest-bearing debt 316 804 139 235 122 089
Long-term interest-bearing debt 205 326 145 852 144 371
Short-term interest-bearing
debt 228 294 116 425 122 173
Cash resources (116 816) (123 042) (144 456)
Condensed consolidated cash flow statements
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 August 31 August 28 February
(R"000) 2006 2005 2006
Cash generated from operations 156 893 146 679 326 798
(Increase)/decrease in working
capital (77 066) (5 200) 2 816
Non-cash transactions 139 (443) (1 773)
Net financing costs and
taxation paid (40 601) (24 311) (62 205)
Net cash inflow before
distribution to linked
unitholders 39 365 116 725 265 636
Interest and dividend
distribution to
linked unitholders (39 881) (28 295) (27 135)
Net cash (outflow)/inflow
from operating activities (516) 88 430 238 501
Capital expenditure (72 023) (109 915) (183 863)
Acquisition of subsidiaries
and minority interests (71 260) (56 153) (121 034)
Proceeds on the disposal of
assets and investments 4 092 3 056 6 819
Cash outflow from investing
activities (139 191) (163 012) (298 078)
Net cash inflow from financing
activities 34 506 102 561 96 504
Net (decrease)/increase in
cash equivalents (105 201) 27 979 36 927
Condensed segmental analysis
(R"000) Films Rigids Flexibles Total
Revenue - 2006 429 157 363 550 204 038 996 745
Revenue - 2005 391 068 348 160 152 065 891 293
Profit from operations - 2006 32 217 51 111 21 431 104 759
Profit from operations - 2005 30 496 52 063 18 854 101 413
Depreciation - 2006 12 700 31 746 7 816 52 262
Depreciation - 2005 9 178 30 499 5 672 45 349
Capital expenditure - 2006 12 772 56 852 2 399 72 023
Capital expenditure - 2005 45 076 60 936 3 903 109 915
Total assets - 2006 680 823 686 323 325 577 1 692 723
Total assets - 2005 528 958 618 175 173 786 1 320 919
Total liabilities - 2006 533 658 170 756 247 734 952 148
Total liabilities - 2005 320 529 242 629 109 557 672 715
Condensed consolidated statement of changes in equity
Share Non-
capital distri-
and Retained butable Capital
(R"000) premium income reserve reserve
Restated balances at
28 February 2005 84 437 405 438 858 2 803
Net income for the
six months 59 355
Net ordinary
dividends paid (21 330)
Adjustments to
minority interest
Decrease in foreign
currency translation
reserve 439
Transfer to deferred
tax asset (669)
Acquisition of
treasury shares
Expensing of
share-based payments
for the six months 1 293
Issue of shares
at a premium 117 165
Issue of debentures
Restated balances
at 31 August 2005 201 602 443 463 628 4 096
Net income for the
six months 79 646
Adjustments to
minority interest
Decrease in foreign
currency translation
reserve 58
Transfer to deferred
tax asset (669)
Acquisition of
treasury shares
Expensing of
share-based payments
for the six months 1 235
Issue of shares
at a premium (2 100)
Balances at
28 February 2006 199 502 523 109 17 5 331
Net income for the
six months 62 830
Net ordinary
dividends paid (30 210)
Adjustments to
minority interest
Transfer to deferred
tax asset (669)
Acquisition of
treasury shares
Expensing of
share-based payments
for the six months 1 579
Unaudited balances
at 31 August 2006 199 502 555 729 (652) 6 910
Condensed consolidated statement of changes in equity (continued)
Attribu-
table to
linked
unit-
(R"000) holders
Treasury Deben- of the Minority Total
shares tures parent interests equity
Restated balances at
28 February 2005 (48 950) 52 409 496 995 23 535 520 530
Net income for
the six months 59 355 3 330 62 685
Net ordinary
dividends paid (21 330) (4 103) (25 433)
Adjustments to
minority interest - (7 211) (7 211)
Decrease in foreign
currency translation
reserve 439 439
Transfer to deferred
tax asset (669) (669)
Acquisition of
treasury shares (22 993) (145) (23 138) (23 138)
Expensing of
share-based payments
for the six months 1 293 1 293
Issue of shares at
a premium 117 165 117 165
Issue of debentures 7 507 7 507 7 507
Restated balances
at 31 August 2005 (71 943) 59 771 637 617 15 551 653 168
Net income for
the six months 79 646 5 282 84 928
Adjustments to
minority interest - 2 781 2 781
Decrease in foreign
currency translation
reserve 58 58
Transfer to deferred
tax asset (669) (669)
Acquisition of
treasury shares (7 507) (155) (7 662) (7 662)
Expensing of
share-based payments
for the six months 1 235 1 235
Issue of shares
at a premium (2 100) (2 100)
Balances at
28 February 2006 (79 450) 59 616 708 125 23 614 731 739
Net income for
the six months 62 830 4 230 67 060
Net ordinary
dividends paid (30 210) (250) (30 460)
Adjustments to
minority interest - (1 444) (1 444)
Transfer to deferred
tax asset (669) (669)
Acquisition of
treasury shares (27 322) 92 (27 230) (27 230)
Expensing of
share-based payments
for the six months 1 579 1 579
Unaudited balances
at 31 August 2006 (106 772) 59 708 714 425 26 150 740 575
COMMENTARY
Group Profile
Astrapak Limited ("Astrapak" or "the Company" or "the Group"), headquartered
in Sandton, manufactures and distributes an extensive range of plastic
packaging products achieving annualised revenues of more than R2 billion.
The Group has manufacturing facilities in the main centres of South Africa
and a joint venture in Mauritius and employs more than 3 000 people.
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 innovation-led growth in plastic packaging,
which should continue to gain an increasing share of the packaging market,
and plans to expand through continued organic and acquisitive growth.
During the period under review the Group evaluated numerous acquisition
opportunities and concluded the acquisition of Alex White Holdings Limited
("Alex White").
Financial Results
The financial results for the period were characterised by continued growth
in consumer spending, unusually high increase in raw material input costs, a
poor trading month in April, the acquisition of Alex White from 1 June 2006
and the under-performance of some operating entities.
Turnover for the period increased by 12% over the prior year. The
acquisition of Alex White and Consupaq (effective subsequent to the
comparative period) accounted for 5% of the increased turnover, volume
growth 3% and raw material related price increases of 4%.
EBITDA increased to R157,0m (R146,8m), an increase of 7% and an EBITDA
margin of 15.8% (16.5%). The reduction in margin is largely attributable to
raw material price increases and the timing of the recovery of these price
increases from customers. The depreciation charge for the period was 15%
higher than last year due to the higher level of capital expenditure
incurred in the previous year. The resultant profit from operations was
R104,8m (R101,4m), an increase of 3.3% over the prior year and yielding a
margin of 10.5% (11.4%).
Net interest paid of R19,4m, which includes the provision for debenture
interest, remained constant and included the finance charges associated with
the purchase of Alex White.
The taxation expense amounted to R18,3m (R19,9m) and includes the payment of
Secondary Taxation on Companies. The Group"s effective taxation rate was
21.4% (24.1%).
Cash flows from the Group"s operations were utilised to facilitate the
following capital outflows:
- The acquisition of 100% of Alex White for a consideration of R58m paid
in June 2006;
- The purchase of 25% of Tamperpak (Pty) Ltd for R2,4m;
- The purchase of 2,946m Astrapak linked units for R39,1m; and
- R72m on capital expenditure, mainly for capacity enhancing projects.
The effect of the capital outflows together with the investment in
inventories (due to high polymer prices and shortage of materials) resulted
in an increase in net interest bearing debt of R177,6m to R316,8m. The net
interest bearing debt to equity ratio increased from 22% to 44%.
Headline earnings per linked unit ("HEPLU") increased by 6% over the period
to 57,3 cents (54,0 cents). Fully diluted HEPLU increased by 7.5%. Profit
attributable to linked Unitholders of the parent amounted to R62,8m
(R59,4m).
Prospects
Household consumer spending is forecast to continue growing albeit at a
slower rate because of a rising interest rate environment. The recent
softening of the Rand has created further export opportunities and we
believe that polymer prices have peaked and expect the next price movement
to be downward.
The Group has made, and will continue to make, significant expansion and
development of its manufacturing capabilities. These investments and an
expected reduction in the net investment in working capital should become
more evident in the next financial reporting periods for the Group.
Post Balance Sheet Events
The Company has received the authority from its Linked Unitholders to create
4m non redeemable, non participating, cumulative preference shares of R0.001
(one tenth of a cent) each ("the preference shares"). Any preference share
issued by Astrapak will be listed on the JSE Limited. The rights attaching
to the preference shares were set out in a notice to Linked Unitholders
recently sent to Linked Unitholders.
The Company is currently undertaking a private placement of the preference
shares with a view to raising an initial minimum amount of R150m.
The Company will in a separate announcement set out the results of the
private placement of the preference shares and the amount of capital raised.
The Company has also received the authority from debenture holders of the
Company to redeem any part of the debentures in the capital of the Company
("the Debentures") currently in issue at any time as and when determined by
the Board of directors of Astrapak.
Subsequent to 31 August 2006, the Company completed the acquisitions of
Plastform (a division of Consol Limited) and Ultrapak (a division of Durban
Bag (Proprietary) Limited). The latter is subject to Competition Commission
approval.
Basis of Presentation and Accounting Policies
The financial results are prepared in accordance with IAS 34 (Interim
Financial Reporting), the requirements of the South African Companies Act,
Act 61 of 1973, and the Listing requirements of the JSE Limited in a manner
consistent with the annual results for the year ended 28 February 2006.
Distribution to Linked Unitholders
A provision for debenture interest of R3,2m has been made, which
approximates the average prime rate of interest for the six months ended 31
August 2006. Debenture interest for the full year ending 28 February 2007
will be declared and is payable in June 2007.
Changes to the Board of Directors
On 28 September 2006 Mr Russell Upton, Chairman of the Group since 1 January
2001, resigned from the Board. Mr Thierry Dalais has been appointed to the
position of acting-Chairman. The Board would like thank Mr Upton for his
valuable contribution to the growth of the Group during his tenure as
Chairman.
On 14 July 2006 Mrs Yolande Cowley resigned as Company Secretary and was
replaced by Mr Gary King.
Acknowledgements
The 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
results achieved by the Group.
For and on behalf of the Board
R Crewe-Brown H A Todd
(Chief Executive Officer) (Financial Director)
Sandton
24 October 2006
OPERATING ENTITIES
RIGIDS DIVISION
Cinqpet
Consupaq
Hilfort Plastics
JJ Precision Plastics
Marcom Plastics
PAK 2000
Plastop
Plastop (KwaZulu-Natal)
Thermopac
FILMS DIVISION
Barrier Film Converters
City Packaging
East Rand Plastics
International Edgeboard Technologies
International Tube Technologies
Packaging Consultants
Pack-Line Holdings
Peninsula Packaging
Tristar Plastics
FLEXIBLES DIVISION
Alex White
Astrapak Flexible
Astraflex
Astra Repro
Cape Wrappers
Diverse Labelling Consultants
Knilam Packaging
Saflite (Cape)
Standard Labels (Mauritius)
Tamperpak
Board of Directors: R T Dalais* (Acting Chairman), R Crewe-Brown (Chief
Executive Officer), M Baglione, P C Botha*, W J Venter, G Petzer, H A Todd,
M Diedloff, T Kgage*, C Molefe* *Non-executive
Company Secretary: G King
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 Investor Services 2004 (Pty) Ltd Ground Floor, 70
Marshall Street, Johannesburg, 2001 PO Box 61051, Marshalltown, 2107
Date: 25/10/2006 07:00:42 AM Produced by the JSE SENS Department
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