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TRANSPACO LIMITED
REG NO. 51/00799/06
GROUP RESULTS FOR THE 12 MONTHS ENDED 31 MARCH 1999
REVENUE UP 52%
OPERATING INCOME UP 111%
ATTRIBUTABLE INCOME UP 164%
EARNINGS PER SHARE UP 30%
4 YEAR COMPOUNDED GROWTH IN EPS
CONSOLIDATED INCOME STATEMENT
REVIEWED AUDITED
1999 1998
R'000 R'000
REVENUE 177356 116767
OPERATING INCOME BEFORE FINANCE CHARGES 26173 12393
NET FINANCE CHARGES 2980 2881
INCOME BEFORE TAXATION 23193 9512
TAXATION 6123 3057
INCOME AFTER TAXATION ATTRIBUTABLE TO SHAREHOLDERS 17070 6455
NUMBER OF ORDINARY SHARES IN ISSUE (000'S) 32782 16000
EARNINGS PER SHARE (FULLY DILUTED) 52C 40C
CONSOLIDATED BALANCE SHEET
REVIEWED AUDITED
1999 1998
CAPITAL EMPLOYED R'000 R'000
SHAREHOLDERS INTEREST 42564 21146
LONG TERM LIABILITIES 5783 3789
DEFERRED TAXATION 892 606
49239 25541
EMPLOYMENT OF CAPITAL
FIXED ASSETS 35109 15641
NET CURRENT ASSETS 14130 9900
CURRENT ASSETS 69310 49665
STOCK 20328 16730
ACCOUNTS RECEIVABLE 47997 32105
CASH RESOURCES 985 830
CURRENT LIABILITIES 55180 39765
INTEREST BEARING 16929 11923
NON INTEREST BEARING 38251 27842
49239 25541
NET ASSET VALUE 130C 132C
CONSOLIDATED CASH FLOW STATEMENT
REVIEWED AUDITED
1999 1998
R'000 R'000
CASH GENERATED BY OPERATION
AFTER TAXATION AND INTEREST 17070 6455
DEPRECIATION OF FIXED ASSETS 3223 1448
CASH GENERATED BY OPERATIONS 20293 7903
RECEIVED SHARE CAPITAL 168 50
RECEIVED SHARE PREMIUM 4220 1284
WORKING CAPITAL (4271) (3931)
RECEIVED FROM SHARE INCENTIVE - 107
ACQUISITION OF FIXED ASSETS (22690) (6154)
ADVANCE/REPAYMENT - LONG TERM LIABILITIES 1994 741
DEFERRED TAXATION 286 -
TRANSPACO LIMITED
TRANSPACO IS A MANUFACTURING AND DISTRIBUTION COMPANY, OPERATING EXTENSIVELY IN
THE PLASTIC AND PACKAGING INDUSTRIES.
THE GROUPS EMPHASIS IS IN:-
PACKAGING FOR THE RETAIL, INDUSTRIAL, AGRICULTURAL AND MINING SECTORS
SCHOLASTIC AND OFFICE STATIONERY
PLASTIC RECLAMATION AND RECYCLING
INJECTION MOULDING
VACUUM FORMING
PLASTIC FABRICATION
TRANSPACO OPERATES FROM TEN MANUFACTURING SITES, DISTRIBUTING NATIONALLY
THROUGH ITS OWN OUTLETS AND INDEPENDENT COMPANIES. ITS CUSTOMER BASE EXTENDS
OVER ALL SECTORS OF THE ECONOMY.
THE OUTSTANDING RESULTS ACHIEVED BY TRANSPACO ILLUSTRATE ITS ABILITY TO EXCEL
UNDER EXTREMELY HARSH CONDITIONS. DESPITE HIGH INTEREST RATES, UNPRECEDENTED
NATIONAL INDUSTRIAL UNREST IN THE INDUSTRIES IN WHICH TRANSPACO OPERATE AND
RECESSIONARY ECONOMIC CONDITIONS, TRANSPACO ACHIEVED 30% GROWTH IN EARNINGS PER
SHARE FROM 40 CENTS TO 52 CENTS FOR THE 12 MONTHS ENDING MARCH 1999.
REVENUE INCREASED 51,9% WITH A CORRESPONDING OPERATING INCOME INCREASE OF
111,2%.
FINANCIAL RESULTS
GROUP REVENUE FOR THE PERIOD UNDER REVIEW WAS R 177,4 MILLION. OPERATING
INCOME BEFORE FINANCE COSTS INCREASED FROM R 12,4 MILLION TO R 26,2 MILLION.
THE IMPROVEMENTS WERE DUE TO:-
THE ACQUISITION OF SILVERPACK, PLASTECH, PRINTPLAST, PE RECOVERIES AND PERANA
PLASTICS
INCREASED REVENUE
EFFICIENT CONTROL OVER OPERATIONS
DEVELOPMENT OF NICHE MARKETS
THE BENEFITS OF RATIONALISATION OF THE MANUFACTURING FACILITIES
ATTRIBUTABLE INCOME WAS R 17,1 MILLION, TRANSLATING TO AN INCREASE IN EARNINGS
PER SHARE FROM 40 CENTS IN 1998 TO 52 CENTS IN 1999, FULLY DILUTED BASED ON
32,8 MILLION SHARES. THE INTEREST BEARING DEBT RATIO IMPROVED FROM 75% TO 51%
FIVE YEAR HISTORY
1999 1998 1997 1996 1995
R'000 R'000 R'000 R'000 R'000
REVENUE 117,356 116,767 74,935 68,654 53,646
OPERATING INCOME 26,173 12,393 5,179 3,847 2,250
ATTRIBUTABLE INCOME 17,070 6,455 2,103 1,649 732
EARNINGS PER SHARE 52C 40C 20C 15C 7C
4 YEAR EARNINGS PER SHARE COMPOUNDED GROWTH 64,5%
STATISTICAL INFORMATION 1999 1998 1997 1996 1995
NET INTEREST PAID (R000) 2980 2881 2076 1602 1234
INTEREST COVER 7,80 4,30 2,50 2,48 1,82
INTEREST BEARING
DEBT/EQUITY RATIO (%) 51 75 86 76 100
SHARES IN ISSUE (MILLION) 32,8 16,0 11,0 11,0 11,0
NET ASSET VALUE PER SHARE 130C 132C 121C 102C 72C
SHAREHOLDERS INTEREST (R000) 42,564 21,147 13,358 11,255 7,918
ACQUISITIONS
SHAREHOLDERS WILL RECALL THAT THE CONSIDERATIONS PAYABLE BY TRANSPACO FOR THE
ACQUISITIONS OF SILVERPACK, PRINTPLAST, PLASTECH, PERANA PLASTICS AND PE
RECOVERIES WERE SUBJECT TO THE ACHIEVEMENT OF CERTAIN PROFIT LEVELS FOR THE
YEAR ENDED 31 MARCH 1999. THE REQUIRED PROFIT LEVELS HAVE BEEN ACHIEVED.
REVIEW OF THE DIVISIONS
THE GROUP'S OPERATIONS ARE DIVIDED INTO FOUR DIVISIONS.
FLEXIBLE PLASTICS
THIS DIVISION MANUFACTURES POLYETHYLENE FLEXIBLE PACKAGING. HIGH-SPEED
MACHINERY IS UTILISED IN THE MANUFACTURE OF BOTH STANDARD AND CUSTOMISED
PLASTIC PACKAGING FOR THE RETAIL, WHOLESALE, INDUSTRIAL, AGRICULTURAL AND
MINING SECTORS. THIS DIVISION OPERATES OUT OF TWO FACILITIES, ONE IN
JOHANNESBURG AND THE OTHER IN KWA NDABELE.
PRINTPLAST AND PLASTAFRICA GAINED MARKET SHARE AND ASSEMBLED A PORTFOLIO OF
BLUE CHIP CLIENTS SUCH AS CNA, PICK 'N PAY, SHOPRITE AND WOOLWORTHS.
RIGID DIVISION
TERBO PRODUCES RIGID PVC FOIL FROM ITS FACILITY IN CHAMDOR. MATERIAL IS
SUPPLIED TO THERMO AND VACUUM FORMING CONVERTERS FOR THE APPAREL,
CONFECTIONERY, STATIONERY AND OTHER MARKETS. TERBO ALSO PRODUCES THE MEDIA
UTILISED FOR WATER COOLING AND WATER TREATMENT. THE INSTALLATION OF NEW
EQUIPMENT AT TERBO HAS ENABLED IT TO MANUFACTURE PRODUCTS FOR DIVERSE MARKETS.
PLASTECH EXTRUDES HEAVY-DUTY PIPES FOR THE TELECOMMUNICATION AND MINING
INDUSTRIES AND HAS RECENTLY ENTERED THE WATER PIPE MARKET.
PERANA PLASTICS IS AN INJECTION MOULDING VACUUM FORMING AND PLASTIC
FABRICATIONS BUSINESS. ITS RANGE OF PRODUCTS INCLUDES VIDEO STORAGE BOXES,
DISPLAY STANDS, INDUSTRIAL SIGNS AND STATIONERY COMPONENTS.
PERANA PLASTICS HAS EXPANDED ITS VACUUM FORMING DIVISION INTO FRIDGE
COMPONENTS. DEVELOPMENTS IN THE INJECTION MOULDING BUSINESS WILL INCLUDE THE
SUPPLY OF DISPOSABLE COSMETIC CONTAINERS.
RECYCLING DIVISION
PE RECOVERIES AND SILVERPACK'S RECYCLING PLANT REPRESENT ONE OF THE FINEST AND
MOST SOPHISTICATED SORTING, WASHING AND REPROCESSING FACILITIES IN THE COUNTRY.
PACKAGING DIVISION
FRAMEN PAPER MANUFACTURES CUSTOMISED CARDBOARD TUBES AND CORES FOR THE PAPER,
PRINTING, PLASTIC AND TEXTILE INDUSTRIES. BUBBLE PAC PRODUCES AIR BUBBLE
PROTECTIVE PACKAGING MATERIAL IN ROLLS, SHEETS AND BAGS.
TRANSPACO PACKAGING DISTRIBUTES PACKAGING NATIONALLY SUPPLYING OFF THE SHELF
AND CUSTOMISED PACKAGING MATERIAL TO ALL COMMERCIAL ENTERPRISES. THE PRODUCT
RANGE INCLUDES, CARTONS, TAPES, TWINES, WRAPPING PAPER, PLASTIC BAGS AND
RELATED PRODUCTS.
TRANSPACO PACKAGING WAS MOST AFFECTED BY THE DOWN TURN IN THE ECONOMY. WE ARE
PLEASED TO REPORT THAT AFTER RESTRUCTURING IT IS NOW TRADING WELL AND
CONTRIBUTING TO GROUP PROFITS.
DIVISIONAL CONTRIBUTION TO REVENUE AND OPERATING INCOME
REVENUE % OPERATING INCOME %
RIGID 31,4 47,9
RECYCLING 13,5 21,8
FLEXIBLE 27,2 21,0
PACKAGING 27,9 9,3
PROSPECTS
RECENT DEVELOPMENTS IN THE RETAIL CARRIER BAG MARKET HAVE OPENED UP SEVERAL
OPPORTUNITIES FOR THE GROUP'S FLEXIBLE PLASTICS DIVISION. THIS HAS RESULTED IN
MATERIAL CONTRACTS BEING SECURED WITH NATIONAL RETAIL CHAINS. NEW PRODUCTION
FACILITIES HAVE BEEN ESTABLISHED TO MEET THE INCREASE IN DEMAND.
PLASTECH OUR PIPE MANUFACTURING COMPANY WAS AWARDED THE SOUTH AFRICAN BUREAU OF
STANDARDS MARK DURING THE YEAR, ENABLING IT TO ENTER INTO THE LUCRATIVE WATER
PIPE MARKET. CONTRACTS HAVE BEEN SECURED WITH GOVERNMENT ORGANISATIONS.
FURTHER EXPANSION OPPORTUNITIES INTO AGRICULTURAL AND MINING MARKETS EXIST.
PE RECOVERIES HAS SECURED ORDERS IN THE EXPORT MARKET.
MANAGEMENT IS CONFIDENT THAT REAL GROWTH WILL BE ACHIEVED IN THE FORTHCOMING
YEAR. TRANSPACO REMAINS COMMITTED TO THE EXPANSION OF ITS EXISTING OPERATIONS
AND TO THE IDENTIFICATION AND ACQUISITION OF BUSINESSES THAT FULFIL THE GROUP'S
STRATEGIC GROWTH OBJECTIVES.
YEAR 2000 COMPLIANT
THE MILLENNIUM DATE CHANGE IS NOT EXPECTED TO PRESENT ANY MATERIAL OPERATING
DIFFICULTIES. ALL SUBSIDIARIES HAVE BEEN ASSESSED AND WHERE NECESSARY
COMPLIANCE UPGRADES HAVE TAKEN PLACE. NO MATERIAL COSTS HAVE BEEN INCURRED.
CHANGE IN YEAR-END
A DIRECTOR'S RESOLUTION WAS PASED ON 19 JANUARY 1999, CHANGING THE GROUP'S
YEAR-END FROM 31 MARCH TO 30 JUNE. ACCORDINGLY, TRANSPACO 1999 ANNUAL
FINANCIAL STATEMENTS WILL BE FOR A 15 MONTH PERIOD ENDING
30 JUNE 1999.
REDUCTION IN SHARE PREMIUM
A CIRCULAR, INCLUDING A NOTICE FOR THE CONVENING OF A GENERAL MEETING,
RECOMMENDING THE WRITING OFF OF THE GROUP'S INTANGIBLE ASSETS AGAINST THE SHARE
PREMIUM ACCOUNT OF TRANSPACO, WILL BE SENT TO SHARE HOLDERS. THESE FINANCIAL
STATEMENTS ARE PRESENTED TAKING THE EFFECT OF THIS INTO ACCOUNT.
DIVIDEND
IN VIEW OF THE CHANGE IN YEAR-END, A DIVIDEND WILL BE CONSIDERED AT THE NEW
YEAR END I.E. 30 JUNE 1999.
ON BEHALF OF THE BOARD:
S ABELHEIM (CHAIRMAN)
P ABELHEIM (CHIEF EXECUTIVE OFFICER)
SANDTON
25 MAY 1999
S ABELHEIM (CHAIRMAN)
P ABELHEIM (CHIEF EXECUTIVE OFFICER)
A AARON (NON-EXECUTIVE)
H BOTHA
K BOTHA
C BOUZAGLOU
D HILEWITZ (NON-EXECUTIVE)
S JACOBSON (NON-EXECUTIVE)
E ROVETTI
A SHUB
C VIDERGAUZ
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