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NAMPAK LIMITED - INTERIM REPORT AND DIVIDEND DECLARATION

Release Date: 11/05/2000 13:23
Code(s): NPK NPKP NPP1
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NAMPAK LIMITED
(REGISTRATION NUMBER 1968/008070/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)

GROUP INCOME STATEMENT UNAUDITED AUDITED 6 MONTHS ENDED YEAR ENDED 31 MARCH 30 SEPT 2000 1999 CHANGE 1999
RM RM % RM
TURNOVER 4 593,5 3 752,0 22 7 942,9 OPERATING PROFIT (NOTE 1) 464,1 367,0 27 826,4
DIVIDEND INCOME - 11,0 4,9 NET INTEREST RECEIVED
(NOTE 2) 1,0 24,8 30,6
PROFIT BEFORE TAXATION 465,1 402,8 15 861,9
TAXATION 128,5 114,1 233,4
PROFIT AFTER TAXATION 336,6 288,7 17 628,5 SHARE OF ASSOCIATE
COMPANY'S LOSS 0,1 - 1,6 ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS IN SUBSIDIARIES 22,5 3,6 26,0 ATTRIBUTABLE TO SHAREHOLDERS
IN NAMPAK LIMITED 314,0 285,1 10 600,9 NUMBER OF ORDINARY SHARES
IN ISSUE (000) 508 995 508 741 508 811 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES ON WHICH HEADLINE EARNINGS AND NET PROFIT PER
SHARE ARE BASED (000) 508 968 508 733 508 756 HEADLINE EARNINGS PER ORDINARY SHARE*
(CENTS) 61,5 55,6 11 117,6 DIVIDEND PER SHARE
(CENTS) 17,8 16,1 11 51,0 NET PROFIT PER SHARE
(CENTS) 61,7 56,0 10 118,1 *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 314,0 285,1 600,9 ADJUSTED FOR: NET PROFIT ON SALE OF
FIXED ASSETS (1,0) (2,2) (2,5) HEADLINE EARNINGS FOR THE
PERIOD 313,0 282,9 598,4
GROUP BALANCE SHEET UNAUDITED AUDITED
31 MARCH 30 SEPT
2000 1999 1999
RM RM RM ASSETS
NON-CURRENT ASSETS 3 589,9 2 391,4 2 496,4
PROPERTY, PLANT AND EQUIPMENT 3 476,8 2 233,6 2 451,4
INVESTMENTS AND ASSOCIATES (NOTE 3) 113,1 157,8 45,0
CURRENT ASSETS 3 020,4 2 233,7 3 022,4
INVENTORIES 1 143,0 953,8 975,8
ACCOUNTS RECEIVABLE 1 566,0 1 119,8 1 326,5
BANK BALANCES, DEPOSITS AND CASH 311,4 160,1 720,1
TOTAL ASSETS 6 610,3 4 625,1 5 518,8 EQUITY AND LIABILITIES
CAPITAL AND RESERVES 2 971,9 2 806,0 2 988,3
CAPITAL 354,7 353,1 353,9
NON-DISTRIBUTABLE RESERVES 348,9 185,9 251,5
RETAINED EARNINGS 2 268,3 2 267,0 2 382,9
MINORITY INTEREST 237,3 90,5 214,4
NON-CURRENT LIABILITIES 1 823,2 600,3 511,3
INTEREST BEARING DEBT 1 471,1 263,1 268,4
DEFERRED TAXATION 352,1 337,2 242,9
CURRENT LIABILITIES 1 577,9 1 128,3 1 804,8
ACCOUNTS PAYABLE 1 427,4 990,5 1 556,7
TAXATION 59,8 55,9 69,3
SHAREHOLDERS FOR DIVIDEND 90,7 81,9 178,8
TOTAL EQUITY AND LIABILITIES 6 610,3 4 625,1 5 518,8 TOTAL BORROWINGS : TOTAL
SHAREHOLDERS' FUNDS 45,8% 9,1% 8,0% NET BORROWINGS/(CASH) : TOTAL
SHAREHOLDERS' FUNDS 36,0% 3,6% (14,0%) NET WORTH PER ORDINARY SHARE
(CENTS) 584 551 587
GROUP STATEMENT OF CHANGES UNAUDITED AUDITED IN EQUITY 6 MONTHS ENDED YEAR ENDED 31 MARCH 30 SEPT 2000 1999 1999
RM RM RM NET GAINS/(LOSS) RECOGNISED
DIRECTLY IN EQUITY 96,3 (1,3) 65,3
TRANSFER TO RETAINED EARNINGS (4,0) - (0,1) NON-DISTRIBUTABLE RESERVE ARISING
ON ACQUISITION OF BUSINESS 102,1 - 68,8 DECREASE IN FOREIGN CURRENCY
TRANSLATION RESERVE (1,8) (1,3) (3,4)
NET PROFIT FOR THE YEAR 314,0 285,1 600,9
GOODWILL WRITTEN OFF (341,9) (178,9) (208,5) AGGREGATE INCREASE IN NET WORTH 68,4 104,9 457,7 CAPITAL TRANSACTIONS WITH AND
DISTRIBUTIONS TO OWNERS (84,8) (81,5) (258,8) SHARE PREMIUM ON NEW ISSUE 1,8 0,1 0,8
PREFERENCE DIVIDENDS - - (0,1)
ORDINARY DIVIDENDS (90,6) (81,6) (259,6) TRANSFER FROM NON-DISTRIBUTABLE
RESERVES 4,0 - 0,1
ADDED TO EQUITY DURING THE PERIOD (16,4) 23,4 198,9 EQUITY AT THE BEGINNING OF THE
PERIOD 2 988,3 3 055,5 3 055,5 EFFECT OF CHANGE IN ACCOUNTING
POLICY - (273,9) (266,1) EQUITY AT THE END OF THE PERIOD 2 971,9 2 805,0 2 988,3 GROUP CASH FLOW STATEMENT UNAUDITED AUDITED 6 MONTHS ENDED YEAR ENDED 31 MARCH 30 SEPT 2000 1999 1999
RM RM RM
CASH OPERATING PROFIT 638,6 519,2 1 141,7 WORKING CAPITAL CHANGES (416,6) (285,8) (164,3) NET INTEREST RECEIVED INCLUDING
CAPITALISED 1,0 23,2 31,7
TAXATION PAID (143,6) (126,5) (150,3) CASH AVAILABLE FROM OPERATIONS 79,4 130,1 858,8
DIVIDENDS PAID (178,8) (146,2) (241,3) NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES (99,4) (16,1) 617,5 NET CASH OUTFLOW FROM INVESTING
ACTIVITIES (1 513,0) (440,3) (434,6) NET CASH (OUTFLOW)/INFLOW BEFORE
FINANCING ACTIVITIES (1 612,4) (456,4) 182,9 NET CASH INFLOW FROM FINANCING
ACTIVITIES 1 275,9 48,6 96,8 NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (336,5) (407,8) 279,7 CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 649,7 370,5 370,5 FOREIGN CURRENCY TRANSLATION
DIFFERENCES (1,8) 1,0 (0,5) CASH AND CASH EQUIVALENTS AT END
OF PERIOD (NOTE 4) 311,4 (36,3) 649,7 NOTES UNAUDITED AUDITED 6 MONTHS ENDED YEAR ENDED 31 MARCH 30 SEPT 2000 1999 1999
RM RM RM 1. OPERATING PROFIT - ABNORMAL ITEMS
OPERATING PROFIT 464,3 366,8 824,9 ABNORMAL ITEMS - PROFIT/(LOSS)
ON SALE OF ASSETS (0,2) 0,2 1,5
464,1 367,0 826,4 2. NET INTEREST RECEIVED
INTEREST PAID (20,7) (25,7) (32,3) INTEREST RECEIVED 21,7 50,5 62,9
1,0 24,8 30,6 3. INVESTMENTS AND LOANS
DIRECTORS' VALUATION 113,1 157,8 45,0 4. CASH AND CASH EQUIVALENTS
INTEREST BEARING DEBT (1 471,1) (263,1) (268,4) LESS LONG TERM LIABILITIES 1 471,1 66,7 198,0
BANK BALANCES, DEPOSITS AND CASH 311,4 160,1 720,1
311,4 (36,3) 649,7 5. SUPPLEMENTARY INFORMATION
DEPRECIATION 173,6 139,6 294,6
CAPITAL EXPENDITURE 178,2 98,4 203,8
- EXPANSION 83,2 60,8 126,4
- REPLACEMENT 95,0 37,6 77,4
CAPITAL COMMITMENTS 160,1 109,6 18,0
- CONTRACTED 60,0 75,5 16,2
- APPOVED NOT CONTRACTED 100,1 34,1 1,8
LEASE COMMITMENTS 160,3 124,7 177,9
- LAND AND BUILDINGS 153,7 108,9 168,5
- OTHER 6,6 15,8 9,4
CONTINGENT LIABILITIES 9,1 11,1 10,3 REVIEW OF RESULTS
THE GROWTH IN THE NON-DURABLE SECTOR OF THE ECONOMY HAS BEEN DISAPPOINTING OVER THE PERIOD. WET WEATHER CONDITIONS IN THE FIRST QUARTER OF 2000 HAVE BEEN THE WORST EXPERIENCED BY THE SUB-CONTINENT IN MANY YEARS AND BOTH FACTORS HAVE NEGATIVELY AFFECTED THE DEMAND FOR THE GROUP'S PRODUCTS, PARTICULARLY THOSE DIVISIONS SUPPLYING THE BEVERAGE INDUSTRY.
TURNOVER SHOWED A 22% INCREASE TO R4 594 MILLION BOOSTED BY THE DOMESTIC ACQUISITIONS MADE LAST YEAR, THE CONSOLIDATION OF THE AFRICAN BUSINESSES AND TWO MONTHS' SALES FROM OUR INTERNATIONAL ACQUISITION, PLYSU PLC.
OPERATING PROFIT ROSE 27% TO R464,1 MILLION, LARGELY DUE TO THE ACQUISITIONS AND THE CONSOLIDATION OF THE AFRICAN BUSINESSES.
AFTER A DECLINE IN NET INTEREST RECEIVED, DUE TO THE FUNDING REQUIRED FOR THE PLYSU ACQUISITION, AND AN INCREASE IN MINORITIES, ATTRIBUTABLE PROFIT GREW BY 10% TO R314 MILLION. HEADLINE EARNINGS PER SHARE INCREASED BY 11% TO 61,5 CENTS PER SHARE.
THE SOUTH AFRICAN OPERATIONS CONTINUED TO GENERATE STRONG CASH FLOWS AND NET CASH OF R311 MILLION IS AVAILABLE TO THE SOUTH AFRICAN OPERATIONS. NET BORROWINGS OF R1 471 MILLION WERE INCURRED FOR THE PLYSU ACQUISITION.
THE 1999/2000 YEAR END CHANGE-OVER PRESENTED NO PROBLEMS FOR THE GROUP IN EITHER ITS SYSTEMS OR INFORMATION ACCESS AND AVAILABILITY.
INTERNATIONAL EXPANSION AND CONSOLIDATION OF ACQUISITIONS
IN LINE WITH OUR STATED STRATEGY OF INTERNATIONALISATION, 100% OF THE SHARE CAPITAL OF PLYSU, A FORMERLY LISTED PLASTIC PACKAGING MANUFACTURING COMPANY IN THE U K FOCUSED ON CONTAINERS FOR LIQUID FOODS, PERSONAL CARE PRODUCTS AND GENERAL PLASTIC CONTAINERS, WAS ACQUIRED. PLYSU HAS LOCATIONS IN THE UK AND IN EUROPE. INTEGRATION OF THAT BUSINESS WITH OUR EXISTING UK OPERATION,
BLOWMOCAN, AND WITHIN THE GREATER NAMPAK GROUP IS PROCEEDING WELL. SIGNIFICANT SYNERGIES ARE EXPECTED FROM THE INTEGRATION PROCESS AND THE MERGED ENTITY WILL FORM A SOLID PLATFORM FOR FURTHER EXPANSION INTERNATIONALLY.
THE RESULTS TO MARCH 2000 INCLUDE THE CONTRIBUTIONS FROM CROWN NAMPAK SOUTH AFRICA, THE TISSUE OPERATIONS OF NATIONAL TISSUE AND GREENFERN, AND THE PAPER CEMENT SACKS MANUFACTURING OPERATION OF THE ALPHA GROUP, FOR THE FULL HALF YEAR. INTEGRATION OF THESE OPERATIONS CONTINUES TO GO SMOOTHLY WITH THE MAJOR RATIONALISATION OF THE CROWN NAMPAK PLANTS TO TAKE PLACE IN THE SECOND HALF OF THIS YEAR.
REFOCUSING OF THE GROUP INTO CORE ACTIVITIES CONTINUED, WITH AGREEMENT REACHED IN PRINCIPLE TO SELL THE MONO CONTAINERS DIVISION TO HUHTAMAKI VAN LEER. IN JANUARY OF THIS YEAR A RESTRUCTURE OF THE GROUP'S TOP MANAGEMENT WAS ANNOUNCED TO PROVIDE RESOURCES TO FOCUS ON INTERNATIONAL GROWTH WHILST RETAINING A STRONG MANAGEMENT FOCUS ON AFRICA AND SOUTH AFRICA AND, AT THE SAME TIME, ADDING DEPTH TO THE SENIOR MANAGEMENT TEAM. SECTORAL INFORMATION - SOUTH AFRICA AND AFRICA METALS AND GLASS
BAD WEATHER CONDITIONS IN THE FIRST QUARTER OF 2000 RESULTED IN LOW LEVELS OF DEMAND. THIS, COMBINED WITH CONTINUING PRESSURE ON MARGINS, LED TO A 16,1% DECLINE IN OPERATING PROFIT TO R169,8 MILLION, WITH MARGINS FALLING TO 10,8%. 6 MONTHS ENDED YEAR ENDED 31 MARCH INC/ 30 SEPT
2000 1999 (DEC) 1999
RM RM % RM
TURNOVER 1 566,2 1 346,5 16,3 2 799,6
OPERATING PROFIT 169,8 202,3 (16,1) 314,9
MARGIN 10,8% 15,0% 11,2%
TOTAL ASSETS 1 417,2 1 273,3 1 444,4 PAPER
DESPITE THE EFFECT OF ADVERSE WEATHER CONDITIONS ON THE AGRICULTURAL SECTOR, THE BENEFITS OF LAST YEAR'S ACQUISITIONS AND THE RATIONALISATION OF DIVISIONS TOGETHER WITH THE CONSOLIDATION OF PACKAGING INDUSTRIES (MALAWI) LIMITED AND HUNYANI HOLDINGS LIMITED, HAS RESULTED IN A PLEASING GROWTH IN BOTH OPERATING PROFIT AND MARGIN. WE EXPECT FURTHER IMPROVEMENTS IN THIS AREA.
6 MONTHS ENDED YEAR ENDED 31 MARCH INC/ 30 SEPT
2000 1999 (DEC) 1999
RM RM % RM
TURNOVER 1 574,5 1 301,8 20,9 2 924,2
OPERATING PROFIT 125,9 54,5 131,2 203,3
MARGIN 8,0% 4,2% 7,0%
TOTAL ASSETS 1 692,0 1 666,5 2 197,4 PLASTICS
RELATIVELY LOW DEMAND AND THE INABILITY TO PASS ON SUBSTANTIAL INCREASES IN RAW MATERIAL PRICES IN THE PERIOD RESULTED IN OPERATING MARGINS FALLING TO 7,0% FROM 8,0%.
6 MONTHS ENDED YEAR ENDED 31 MARCH INC/ 30 SEPT
2000 1999 (DEC) 1999
RM RM % RM
TURNOVER 982,3 941,2 4,4 1 910,2
OPERATING PROFIT 68,9 75,0 (8,2) 148,5
MARGIN 7,0% 8,0% 7,8%
TOTAL ASSETS 937,3 982,7 966,1 OTHER
THIS SECTOR COMPRISES BDM TECHNOLOGIES AND THE GROUP PROPERTY DIVISION. THE INCREASE IN OPERATING PROFIT IS PRIMARILY DUE TO THE ANNUAL REVIEW OF RENTALS TO MARKET RELATED LEVELS AND AN IMPROVED PERFORMANCE FROM BDM TECHNOLOGIES. 6 MONTHS ENDED YEAR ENDED 31 MARCH INC/ 30 SEPT
2000 1999 (DEC) 1999 (EXCLUDING INTRA-GROUP
ADJUSTMENTS) RM RM % RM
TURNOVER 73,8 65,8 12,1 127,3
OPERATING PROFIT 18,9 11,4 65,8 19,5 SECTORAL INFORMATION - INTERNATIONAL
THE RESULTS INCLUDE BLOWMOCAN FOR SIX MONTHS AND PLYSU FOR TWO MONTHS. IN THE FIRST QUARTER OF 2000 THESE BUSINESSES ALSO EXPERIENCED GREAT DIFFICULTY IN PASSING ON SUBSTANTIAL POLYMER PRICE INCREASES DURING THE PERIOD. SOME COSTS WERE ALSO INCURRED IN THE RATIONALISATION PROCESS, WHICH PROCESS WILL CONTINUE FOR THE BALANCE OF THE YEAR.
MANAGEMENT HAS MADE GOOD PROGRESS IN STREAMLINING THE COMBINED BUSINESSES AND THE FORECAST FOR THE BALANCE OF THE YEAR AND FOR NEXT YEAR ARE IN LINE WITH OUR EXPECTATIONS.
6 MONTHS ENDED YEAR ENDED 31 MARCH INC/ 30 SEPT
2000 1999 (DEC) 1999
RM RM % RM
TURNOVER 450,6 154,9 190,9 298,5
OPERATING PROFIT 26,0 15,3 70,2 27,1
MARGIN 5,8% 9,9% 9,1%
TOTAL ASSETS 2 922,4 225,8 216,4 PROSPECTS
DESPITE INTEREST RATE CUTS IN 1999 AND A REDUCTION IN THE INDIVIDUAL TAX RATE, VOLUME GROWTH IN THE UNDERLYING SOUTH AFRICAN ECONOMY FOR NON-DURABLE CONSUMER GOODS REMAINS LOW. HOWEVER, THE BENEFITS FROM THE ACQUISITIONS MADE WILL CONTINUE TO HAVE A POSITIVE IMPACT AND WE WOULD EXPECT A SLIGHTLY IMPROVED RATE OF GROWTH IN EARNINGS FOR THE SECOND HALF OF THE YEAR. DIVIDEND
THE DIRECTORS HAVE DECLARED AN INTERIM DIVIDEND (NO. 63) OF 17,8 CENTS PER SHARE (1999: 16,1 CENTS) WHICH IS COVERED 3,5 TIMES AND IS PAYABLE TO
SHAREHOLDERS REGISTERED ON 26 MAY 2000. PAYMENT OF DIVIDENDS BY WAY OF ELECTRONIC FUNDS TRANSFER WILL BE MADE ON 7 JULY 2000. 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 7 JULY 2000 ON BEHALF OF THE BOARD B P CONNELLAN CHAIRMAN
T EVANS DEPUTY CHAIRMAN AND CHIEF EXECUTIVE OFFICER 11 MAY 2000
DIRECTORS: B P CONNELLAN* (CHAIRMAN), T EVANS (DEPUTY CHAIRMAN AND CHIEF EXECUTIVE OFFICER), G E BORTOLAN (MANAGING - SOUTH AFRICA AND AFRICA), 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 G TOMLINSON, R A WILLIAMS*.
ALTERNATE DIRECTORS: P A DE WEERDT, A D S MORAIS (PORTUGUESE), S C NGIDI. SECRETARY: N P O'BRIEN. *NON-EXECUTIVE
REGISTERED OFFICE: NAMPAK CENTRE, 114 DENNIS ROAD, ATHOLL GARDENS, SANDTON 2196, SOUTH AFRICA (P O BOX 784324, SANDTON 2146, SOUTH AFRICA). TELEPHONE: +27 11 719-6300. WEBSITE: WWW.NAMPAK.CO.ZA
TRANSFER SECRETARIES: MERCANTILE REGISTRARS LIMITED, 11 DIAGONAL STREET, JOHANNESBURG 2001, SOUTH AFRICA (P O BOX 1053, JOHANNESBURG 2000, SOUTH AFRICA) TELEPHONE: +27 11 370-5000.

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