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INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 1998
- NAMPAK LIMITED
NAMPAK LIMITED
(REGISTRATION NUMBER 68/08070/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
GROUP INCOME UNAUDITED AUDITED
STATEMENT 6 MONTHS ENDED YEAR ENDED
31 MARCH 30 SEPT
1998 1997 CHANGE 1997
RM RM % RM
TURNOVER 3 718,7 3 656,9 2 7 070,7
------- ------- -------
OPERATING PROFIT 416,8 458,5 (9) 835,6
DIVIDEND INCOME 9,9 8,1 21,6
NET INTEREST RECEIVED/
(PAID) (NOTE 1) 4,1 (20,5) (35,1)
------- ------- -------
PROFIT BEFORE TAXATION AND
ABNORMAL ITEMS 430,8 446,1 (3) 822,1
ABNORMAL ITEMS (NOTE 2) - (2,7) 4,3
------- ------- -------
PROFIT BEFORE TAXATION 430,8 443,4 (3) 826,4
TAXATION 128,4 149,9 259,8
------- ------- -------
PROFIT AFTER TAXATION 302,4 293,5 3 566,6
ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS IN
SUBSIDIARIES 7,3 10,1 19,5
------- ------- -------
ATTRIBUTABLE TO SHAREHOLDERS
IN NAMPAK LIMITED 295,1 283,4 4 547,1
------- ------- -------
NUMBER OF ORDINARY SHARES
IN ISSUE (000) 508 053 506 633 507 191
WEIGHTED AVERAGE NUMBER
OF ORDINARY SHARES ON
WHICH HEADLINE EARNINGS
AND NET PROFIT PER
SHARE ARE BASED (000) 507 869 506 376 506 631
HEADLINE EARNINGS
PER ORDINARY SHARE*
(CENTS) 57,6 56,1 3 106,5
------- ------- -------
DIVIDEND PER SHARE
(CENTS) 14,8 14,4 3 41,5
NET PROFIT PER SHARE
(CENTS) 58,1 55,9 4 108,0
* HEADLINE EARNINGS PER
ORDINARY SHARE HAS BEEN
CALCULATED IN TERMS OF
THE REQUIREMENTS OF AC 306.
DETERMINATION OF HEADLINE
EARNINGS
NET PROFIT FOR THE PERIOD
PER INCOME STATEMENT 295,1 283,4 547,1
ADJUSTED FOR:
NET PROFIT ON SALE OF
FIXED ASSETS (2,6) (5,6) (8,0)
MOVEMENT IN PROVISIONS IN
RESPECT OF RESTRUCTURING AND
REORGANISING COSTS - 6,0 -
OTHER NON-TRADING ITEMS - - 0,4
HEADLINE EARNINGS FOR
THE PERIOD 292,5 283,8 539,5
------- ------- -------
GROUP BALANCE UNAUDITED AUDITED
SHEET 31 MARCH 30 SEPT
1998 1997 1997
RM RM RM
CAPITAL EMPLOYED
SHARE CAPITAL AND PREMIUM 346,7 339,0 341,1
RESERVES 2 553,7 2 207,5 2 323,1
------- ------- -------
INTEREST OF SHAREHOLDERS OF
NAMPAK LIMITED 2 900,4 2 546,5 2 664,2
INTEREST OF OUTSIDE SHAREHOLDERS 86,8 81,3 79,5
------- ------- -------
INTEREST OF ALL SHAREHOLDERS 2 987,2 2 627,8 2 743,7
DEFERRED TAXATION 79,3 84,6 82,3
INTEREST BEARING DEBT 112,2 347,8 199,3
------- ------- -------
3 178,7 3 060,2 3 025,3
------- ------- -------
EMPLOYMENT OF CAPITAL
FIXED ASSETS 2 086,5 1 917,1 2 066,5
INVESTMENTS AND LOANS (NOTE 3) 52,7 41,8 44,7
CURRENT ASSETS 2 087,5 2 121,5 2 191,0
------- ------- -------
INVENTORIES 936,1 1 067,0 942,9
ACCOUNTS RECEIVABLE 1 064,1 1 014,4 1 010,6
CASH RESOURCES (NOTE 4) 87,3 40,1 237,5
------- ------- -------
------- ------- -------
TOTAL ASSETS 4 226,7 4 080,4 4 302,2
CURRENT LIABILITIES 1 048,0 1 020,2 1 276,9
------- ------- -------
TAXATION 37,9 71,9 95,9
ACCOUNTS PAYABLE 934,9 875,3 1 043,5
SHAREHOLDERS FOR DIVIDEND 75,2 73,0 137,5
------- ------- -------
NET CURRENT ASSETS 1 039,5 1 101,3 914,1
------- ------- -------
3 178,7 3 060,2 3 025,3
------- ------- -------
TOTAL BORROWINGS: TOTAL
SHAREHOLDERS' FUNDS 3,8% 13,2% 7,3%
NET BORROWINGS/(CASH): TOTAL
SHAREHOLDERS' FUNDS 0,8% 11,7% (1,4%)
NET WORTH PER ORDINARY SHARE (CENTS) 571 503 525
------- ------- -------
GROUP CASH FLOW UNAUDITED AUDITED
STATEMENT 6 MONTHS ENDED YEAR ENDED
31 MARCH 30 SEPT
1998 1997 1997
RM RM RM
CASH OPERATING PROFIT 553,0 598,0 1 086,8
WORKING CAPITAL CHANGES (156,5) (149,4) 121,2
DIVIDENDS RECEIVED 10,0 8,1 15,8
NET INTEREST RECEIVED/(PAID)
INCLUDING CAPITALISED 4,1 (20,5) (31,2)
TAXATION PAID (190,4) (171,2) (254,7)
------- ------- -------
CASH AVAILABLE FROM OPERATIONS 220,2 265,0 937,9
DIVIDENDS PAID (138,7) (133,2) (209,8)
------- ------- -------
NET CASH INFLOW FROM OPERATING
ACTIVITIES 81,5 131,8 728,1
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES (150,9) (132,9) (372,5)
------- ------- -------
NET CASH (OUTFLOW)/INFLOW BEFORE
FINANCING ACTIVITIES (69,4) (1,1) 355,6
NET CASH OUTFLOW FROM FINANCING
ACTIVITIES (5,5) (31,7) (18,8)
------- ------- -------
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (74,9) (32,8) 336,8
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 137,3 (202,4) (202,4)
FOREIGN CURRENCY TRANSLATION
DIFFERENCES 0,8 0,3 2,9
------- ------- -------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD (NOTE 4) 63,2 (234,9) 137,3
------- ------- -------
NOTES UNAUDITED AUDITED
6 MONTHS ENDED YEAR ENDED
31 MARCH 30 SEPT
1998 1997 1997
RM RM RM
1. NET INTEREST RECEIVED/(PAID)
INTEREST PAID (8,4) (23,2) (44,3)
INTEREST RECEIVED 12,5 2,7 9,2
------- ------- -------
4,1 (20,5) (35,1)
------- ------- -------
2. ABNORMAL ITEMS BEFORE TAXATION
PROFIT ON DISPOSAL OF LAND
AND BUILDINGS - 5,1 4,6
RESTRUCTURING AND RATIONALISATION
COSTS AND OTHER ITEMS - (7,8) (0,3)
------- ------- -------
- (2,7) 4,3
------- ------- -------
3. INVESTMENTS AND LOANS
UNLISTED - DIRECTORS' VALUATION 59,9 48,9 51,0
------- ------- -------
4. CASH AND CASH EQUIVALENTS
CASH RESOURCES PER BALANCE SHEET 87,3 40,1 237,5
SHORT-TERM BORROWINGS REGARDED
AS CASH EQUIVALENTS (24,1) (275,0) (100,2)
------- ------- -------
63,2 (234,9) 137,3
------- ------- -------
5. SUPPLEMENTARY INFORMATION
DEPRECIATION 136,3 137,3 251,8
CAPITAL EXPENDITURE 143,9 132,4 321,2
------- ------- -------
- EXPANSION 76,1 55,6 216,4
- REPLACEMENT 67,8 76,8 104,8
------- ------- -------
CAPITAL COMMITMENTS 242,3 215,6 202,4
------- ------- -------
- CONTRACTED 172,4 182,9 56,6
- APPROVED NOT CONTRACTED 69,9 32,7 145,8
------- ------- -------
LEASE COMMITMENTS 140,6 163,4 193,3
------- ------- -------
- LAND AND BUILDINGS 122,2 147,5 175,1
- OTHER 18,4 15,9 18,2
------- ------- -------
CONTINGENT LIABILITIES INCLUDING
DEFERRED TAXATION 209,3 197,7 216,8
REVIEW OF RESULTS
TURNOVER GREW BY 2% IN A DEPRESSED AND HIGHLY COMPETITIVE MARKET, PARTICULARLY
IN THE AREA OF NON-DURABLE RETAIL SALES. A FURTHER ADVERSE INFLUENCING FACTOR
WAS ONE WEEK'S LESS TRADING IN THIS REPORTING PERIOD COMPARED TO THAT OF THE
PREVIOUS YEAR. CONSEQUENTLY, OPERATING PROFIT, AFTER A RETRENCHMENT CHARGE OF
R26 MILLION (1997: R12 MILLION), DECLINED BY 9%. ACTION TO REDUCE COSTS AND
RATIONALISE OPERATIONS CONTINUES.
AS ANTICIPATED, POSITIVE CASH FLOWS RESULTED IN A STRONG SWING IN INTEREST
COSTS WITH A NET POSITIVE CHANGE OF R25 MILLION.
DIVIDEND INCOME GREW AS THE INVESTMENTS IN SOUTHERN AFRICA PRODUCED BETTER
RESULTS.
THE EFFECTIVE RATE OF TAXATION DECLINED TO 29,8% (1997: 33,8%) AS A RESULT OF
FURTHER CAPITAL EXPENDITURE ALLOWANCES BEING BROUGHT TO ACCOUNT.
ATTRIBUTABLE PROFIT INCREASED BY 4% AND HEADLINE EARNINGS PER SHARE BY 3%.
SECTORAL INFORMATION
6 MONTHS ENDED YEAR ENDED
31 MARCH INC/ 30 SEPT
1998 1997 (DEC) 1997
PACKAGING RM RM % RM
TURNOVER 2 181,4 2 221,9 (1,8) 4 181,8
OPERATING PROFIT 292,7 276,5 5,8 481,9
MARGIN 13,4% 12,4% 11,5%
TOTAL ASSETS 2 426,7 2 425,0 2 404,8
OPERATING PROFITS IN THE DIVISIONS SERVING THE BEVERAGE MARKET WERE BUOYED BY
STRONG DEMAND IN SOFT DRINKS AND NEW PRODUCTS BUT THIS WAS MORE THAN OFFSET BY
POOR DEMAND IN VIRTUALLY ALL DIVISIONS OPERATING IN THE PRIMARY PACKAGING
MARKET. THE ANTICIPATED RECOVERY IN UNDERPERFORMING DIVISIONS WAS ACHIEVED,
DESPITE THE DIFFICULT TRADING CONDITIONS, AND HAD A SIGNIFICANT IMPACT ON THE
SECTOR'S PERFORMANCE.
6 MONTHS ENDED YEAR ENDED
31 MARCH INC/ 30 SEPT
1998 1997 (DEC) 1997
PAPER AND PRINTING RM RM % RM
TURNOVER 1 610,5 1 509,1 6,7 3 035,5
OPERATING PROFIT 124,1 182,0 (31,8) 353,7
MARGIN 7,7% 12,1% 11,7%
TOTAL ASSETS 1 712,7 1 615,3 1 659,9
ALL OPERATIONS IN THIS SECTOR FOUND THE MARKET VERY COMPETITIVE AND MARGINS
REMAINED UNDER SIGNIFICANT PRESSURE. AS A RESULT SUBSTANTIAL RETRENCHMENT AND
RESTRUCTURING COSTS WERE INCURRED. TISSUE DIVISION CONTINUED TO OPERATE IN A
VERY DIFFICULT MARKET.
FINANCIAL
TOTAL CAPITAL EXPENDITURE FOR THE PERIOD WAS R143,9 MILLION (1997:
R132,4 MILLION) WITH A SLIGHTLY HIGHER LEVEL FORECAST FOR THE SECOND HALF OF
THE YEAR AS THE MAJOR FURNACE UPGRADE IS COMPLETED IN THE GLASS DIVISION.
CASH AVAILABLE FROM OPERATIONS ENDED ON R220,2 MILLION (1997: R265,0 MILLION)
WITH GEARING REDUCING TO 3,8% (1997: 13,2%). ONGOING STRONG CASH FLOWS WILL
CONTINUE TO SUPPORT THE GROWTH OF THE BUSINESS.
PROSPECTS
CURRENT ECONOMIC FACTORS DO NOT INDICATE ANY MATERIAL INCREASE IN DEMAND FOR
THE REMAINDER OF THE YEAR. INTEREST EARNED IS EXPECTED TO INCREASE AND
RETRENCHMENT COSTS ARE EXPECTED TO BE LOWER IN THE SECOND HALF. THE GROUP
CONTINUES TO WORK TOWARDS ATTAINING WORLD CLASS LEVELS IN ITS MANUFACTURING
PROCESSES IN A MARKET ENVIRONMENT WHERE SELLING PRICES ARE GLOBALLY COMPARABLE.
EARNINGS FOR THE FULL YEAR ARE EXPECTED TO REMAIN UNDER PRESSURE BUT WILL SHOW
SOME REAL GROWTH.
DIVIDEND
THE DIRECTORS HAVE DECLARED AN INTERIM DIVIDEND (NO. 59) OF 14,8 CENTS PER
SHARE (1997: 14,4 CENTS) WHICH IS COVERED 3,9 TIMES AND IS PAYABLE TO
SHAREHOLDERS REGISTERED ON 5 JUNE 1998. PAYMENT OF DIVIDENDS BY WAY OF
ELECTRONIC FUNDS TRANSFER WILL BE MADE ON 10 JULY 1998. SHAREHOLDERS WHO HAVE
NOT ALREADY ELECTED TO RECEIVE PAYMENT BY WAY OF ELECTRONIC FUNDS TRANSFER ARE
URGED TO DO SO IN VIEW OF THE CONTINUED HIGH LEVELS OF CHEQUE FRAUD.
DIVIDEND CHEQUES WILL BE POSTED TO SHAREHOLDERS ON 10 JULY 1998.
ON BEHALF OF THE BOARD
B P CONNELLAN CHAIRMAN
T EVANS MANAGING DIRECTOR
18 MAY 1998
REGISTERED OFFICE:
NAMPAK CENTRE
114 DENNIS ROAD
ATHOLL GARDENS
SANDTON 2196
(P O BOX 784324
SANDTON 2146)
TELEPHONE:
(011) 444-7418
TRANSFER SECRETARIES:
RAND REGISTRARS LIMITED
BLOCK C
100 NORTHERN PARKWAY
ORMONDE 2091
(P O BOX 82549
SOUTHDALE 2135)
TELEPHONE:
(011) 496-2222
WEBSITE: WWW.NAMPAK.CO.ZA
DIRECTORS: B P CONNELLAN (CHAIRMAN), T EVANS (MANAGING), G E BORTOLAN, P L
CAMPBELL*, D E COOPER*, N CUMMING, D A HAWTON*, M M KATZ*, A S LANG (BRITISH),
A M MARTHINUSEN, K M MOKOAPE*, L M NDLOVU*, J W C SAYERS, R C WHITE, R A
WILLIAMS*.
ALTERNATE DIRECTORS: P A DE WEERDT, G V D DUFFEY, A D S MORAIS (PORTUGUESE), R
G TOMLINSON. *NON-EXECUTIVE
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