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(REGISTRATION NUMBER 68/08070/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
GROUP RESULTS AND DIVIDEND DECLARATION - YEAR ENDED 30 SEPTEMBER 1998
THE AUDITED CONSOLIDATED RESULTS OF THE GROUP FOR THE YEAR ARE SET OUT BELOW.
INCOME STATEMENT
1998 1997 %
RM RM CHANGE
TURNOVER 7 361,1 7 070,7 4
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OPERATING PROFIT 792,0 835,6 (5)
DIVIDEND INCOME 16,4 21,6
NET INTEREST RECEIVED/(PAID) 15,2 (35,1)
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PROFIT BEFORE TAXATION AND
ABNORMAL ITEMS 823,6 822,1
ABNORMAL ITEMS 0,7 4,3
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PROFIT BEFORE TAXATION 824,3 826,4
TAXATION 234,7 259,8
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PROFIT AFTER TAXATION 589,6 566,6 4
ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS IN SUBSIDIARIES 16,7 19,5
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ATTRIBUTABLE TO SHAREHOLDERS
IN NAMPAK LIMITED 572,9 547,1 5
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WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES ON WHICH HEADLINE
EARNINGS AND ATTRIBUTABLE PROFIT
PER SHARE ARE BASED (000) 508 167 506 631
ATTRIBUTABLE PROFIT PER
ORDINARY SHARE (CENTS) 112,7 108,0 4
HEADLINE EARNINGS PER
ORDINARY SHARE (CENTS) 112,0 106,5 5
DIVIDENDS PER ORDINARY SHARE (CENTS) 43,6 41,5 5
DETERMINATION OF HEADLINE EARNINGS
NET PROFIT PER INCOME STATEMENT 572,9 547,1
ADJUSTED FOR :
PROFIT ON SALE OF OPERATIONS
NET OF TAXATION 0,4 -
PROFIT ON SALE OF FIXED ASSETS
NET OF TAXATION 3,3 8,0
OTHER NON-TRADING ITEMS - (0,4)
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HEADLINE EARNINGS FOR THE YEAR 569,2 539,5
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ABRIDGED BALANCE SHEET
1998 1997
RM RM
CAPITAL EMPLOYED
TOTAL SHAREHOLDERS' FUNDS 3 143,3 2 743,7
DEFERRED TAXATION 76,9 82,3
INTEREST BEARING DEBT 174,7 199,3
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3 394,9 3 025,3
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EMPLOYMENT OF CAPITAL
FIXED ASSETS AND INVESTMENTS 2 351,3 2 111,2
CURRENT ASSETS 2 471,0 2 191,0
- INVENTORIES 902,6 942,9
- ACCOUNTS RECEIVABLE 1 121,0 1 010,6
- CASH RESOURCES 447,4 237,5
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TOTAL ASSETS 4 822,3 4 302,2
ACCOUNTS PAYABLE, PROVISIONS AND
SHAREHOLDERS FOR DIVIDEND 1 427,4 1 276,9
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3 394,9 3 025,3
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NET WORTH PER SHARE (CENTS) 601,1 525,2
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ABRIDGED CASH FLOW STATEMENT
1998 1997
RM RM
CASH OPERATING PROFIT 1 057,8 1 086,8
WORKING CAPITAL CHANGES 117,5 121,2
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CASH GENERATED FROM OPERATIONS 1 175,3 1 208,0
REQUIRED FOR OPERATIONS (476,4) (479,9)
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NET CASH INFLOW FROM OPERATING
ACTIVITIES 698,9 728,1
CASH OUTFLOW FROM INVESTING
ACTIVITIES (479,2) (372,5)
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NET CASH INFLOW BEFORE FINANCING
ACTIVITIES 219,7 355,6
CASH INFLOW/(OUTFLOW) FROM FINANCING
ACTIVITIES 6,9 (18,8)
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NET INCREASE IN CASH AND CASH
EQUIVALENTS 226,6 336,8
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REVIEW OF RESULTS
PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS AND HEADLINE EARNINGS PER SHARE
BOTH GREW BY 5% WHILST TURNOVER GREW BY ONLY 4%.
CONSIDERING THE HARSH ECONOMIC CLIMATE AND THE PRESSURES ON THE PACKAGING
INDUSTRY IN 1998, NAMPAK'S PERFORMANCE ONCE AGAIN HIGHLIGHTED THE GROUP'S
ABILITY TO PRODUCE EARNINGS GROWTH UNDER THE MOST TRYING CIRCUMSTANCES AS A
RESULT OF ITS WIDE RANGE OF PRODUCTS, SOUND MANAGEMENT AND STRONG FINANCIAL
POSITION.
OPERATING MARGIN DECLINED TO 10,8% (1997 : 11,8%) AS SUBSTANTIAL INDUSTRY
OVER-CAPACITY FORCED MARGINS LOWER AND PREVENTED RAW MATERIAL COST INCREASES
FROM BEING FULLY RECOVERED IN SELLING PRICES. CONTINUED FOCUS ON COST CONTROLS
AND OPERATING EFFICIENCIES HELPED TO OFFSET TO SOME EXTENT THE UNDER-RECOVERY
OF COST INCREASES.
TIGHT CONTROL OF WORKING CAPITAL ASSISTED IN PRODUCING A STRONG POSITIVE CASH
FLOW AND, AT THE END OF THE YEAR, NET CASH BALANCES TOTALLED R272,7 MILLION
DESPITE CAPITAL EXPENDITURE OF R379,7 MILLION AND EXPENDITURE ON ACQUISITIONS
OF R100,1 MILLION. AS A RESULT, INTEREST EARNED ENDED ON R15,2 MILLION AGAINST
INTEREST PAID IN 1997 OF R35,1 MILLION.
ALLOWANCES ON CAPITAL EXPENDITURE REDUCED THE EFFECTIVE TAX RATE TO 28,5% (1997
: 31,4%).
IN THE PACKAGING SECTOR SALES VOLUMES WERE GENERALLY MAINTAINED BUT OPERATING
PROFITS REMAINED UNDER PRESSURE. EXCEPTIONS WERE PETPAK WHICH BENEFITED FROM
NEW DEVELOPMENTS AND INVESTMENTS, LIQUID PACKAGING WHICH BENEFITED FROM A
MAJOR RESTRUCTURE, AND FLEXIBLE WHICH IMPROVED ITS PERFORMANCE AS A RESULT OF
THE QUIX ACQUISITION. MEGAPAK, POLYFOIL AND BLOWMOCAN ACHIEVED THE EARNINGS
TURNAROUNDS ANTICIPATED IN LAST YEAR'S STATEMENT.
IN THE PAPER AND PRINTING SECTOR TURNOVER WAS UNDER PRESSURE ACROSS THE BOARD
AND MARGINS WERE ACCORDINGLY LOWER THAN LAST YEAR. CORRUGATED, SACKS AND
TISSUE CONTINUED TO OPERATE IN DIFFICULT MARKET CONDITIONS AND EXPERIENCED A
DECLINE IN OPERATING PROFIT.
PROSPECTS
FORECASTS PREDICT MINIMAL GROWTH IN THE ECONOMY FOR THE FORTHCOMING FINANCIAL
YEAR. THE RESULTANT LACK OF GROWTH IN CONSUMER DEMAND WILL NEGATIVELY IMPACT
ON THE SOUTH AFRICAN PACKAGING INDUSTRY GENERALLY. THE GROUP WILL CONTINUE TO
FOCUS ON PRODUCTION EFFICIENCIES AND WILL AGAIN BENEFIT FROM ITS STRONG CASH
FLOWS. GROWTH INITIATIVES CURRENTLY UNDER WAY, INCLUDING THE PROPOSED CROWN
CORK TRANSACTION, SHOULD BE BENEFICIAL. HOWEVER, ANYTHING OTHER THAN A MODEST
GROWTH IN EARNINGS IS DIFFICULT TO PREDICT IN THE UNCERTAIN ECONOMIC
ENVIRONMENT.
ANNUAL FINANCIAL STATEMENTS
THESE WILL BE POSTED TO SHAREHOLDERS ON OR ABOUT 27 NOVEMBER 1998.
DIVIDEND
THE BOARD HAS DECLARED A FINAL DIVIDEND (NO. 60) OF 28,8 CENTS PER SHARE (1997
: 27,1 CENTS) PAYABLE TO SHAREHOLDERS REGISTERED ON 4 DECEMBER 1998, MAKING A
TOTAL DISTRIBUTION FOR THE YEAR OF 43,6 CENTS (1997 : 41,5 CENTS). PAYMENT OF
DIVIDENDS BY WAY OF ELECTRONIC FUNDS TRANSFER WILL BE MADE ON 8 JANUARY 1999.
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 8 JANUARY 1999.
ON BEHALF OF THE BOARD
B P CONNELLAN
CHAIRMAN
T EVANS
MANAGING DIRECTOR
11 NOVEMBER 1998
DIRECTORS : B P CONNELLAN (CHAIRMAN), T EVANS (MANAGING), G E BORTOLAN, P L
CAMPBELL*, D E COOPER*, N CUMMING, G V D DUFFEY, D A HAWTON*, M M KATZ*, A S
LANG (BRITISH), A M MARTHINUSEN, K M MOKOAPE*, L M NDLOVU*, J W C SAYERS, R A
WILLIAMS*.
ALTERNATES: P A DE WEERDT, A D S MORAIS (PORTUGUESE), R G TOMLINSON.
*NON EXECUTIVE
REGISTERED OFFICE: NAMPAK CENTRE, 114 DENNIS ROAD, ATHOLL GARDENS, SANDTON
2196.
(PO BOX 784324, SANDTON 2146, SOUTH AFRICA). TELEPHONE: (011) 444-7418.
WEBSITE : WWW.NAMPAK.CO.ZA
TRANSFER SECRETARIES: RAND REGISTRARS LIMITED, BLOCK C, 100 NORTHERN PARKWAY,
ORMONDE 2091. (PO BOX 82549, SOUTHDALE 2135, SOUTH AFRICA). TELEPHONE :
(011) 496-2222
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