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TRANSPACO LIMITED
REG. NO 1951/00799/06
AUDITED ANNUAL RESULTS FOR THE YEAR 30 JUNE 2000
CONSOLIDATED INCOME STATEMENT
ANNUALISED
12 MONTHS 12 MONTHS 15 MONTHS
JUNE 2000 JUNE 1999 JUNE 1999
UNAUDITED
NOTE R '000 R '000 R '000
TURNOVER 238 435 178 200 222 751
OPERATING INCOME 33 625 28 718 35 898
DEPRECIATION 5 530 3 316 4 145
NET FINANCE CHARGES 4 732 3 110 3 888
NET INCOME BEFORE TAXATION 23 363 22 292 27 865
TAXATION 6 795 5 826 7 283
NET INCOME AFTER TAXATION 16 568 16 466 20 582
EXCEPTIONAL ITEM 1 14 468 - -
INCOME ATTRIBUTABLE TO SHAREHOLDERS 31 036 16 466 20 582
DIVIDEND 3 271 2 290 2 290
INCOME FOR THE PERIOD 27 765 14 176 18 292
ADJUSTMENT-PRIOR YEARS 392 - -
RETAINED INCOME FOR THE PERIOD 28 157 14 176 18 292
NO OF ORDINARY SHARES IN
ISSUE (000'S) 32 711 32 711 32 711
EARNINGS PER SHARE (CENTS) 94 50 63
HEADLINE EARNINGS PER SHARE (CENTS) 50 50 63
DIVIDEND PER SHARE (CENTS) 10,0 5,6 7,0
INTERIM 5,0 - -
FINAL 5,0 5,6 7,0
DIVIDEND COVER 5,0 9,0 9,0
NOTE 1 PROFIT ON SALE OF BUBBLE PAC DIVISION
CONSOLIDATED BALANCE SHEET
12 MONTHS 15 MONTHS
JUNE 2000 JUNE 1999
R '000 R '000
ASSETS
PROPERTY, PLANT AND EQUIPMENT 55 854 41 082
INTANGIBLES 1 184 711
CURRENT ASSETS 85 160 65 553
INVENTORIES 29 665 25 643
ACCOUNTS RECEIVABLE 55 458 39 873
CASH RESOURCES 37 37
TOTAL ASSETS 142 198 107 346
EQUITY AND LIABILITIES
SHAREHOLDERS FUNDS 71 942 43 785
NON-CURRENT LIABILITIES 15 710 8 877
DEFERRED TAXATION 1 728 337
CURRENT LIABILITIES 52 818 54 347
ACCOUNTS PAYABLE 41 208 32 891
BANK OVERDRAFT 9 974 19 166
SHAREHOLDERS FOR DIVIDEND 1 636 L 290
TOTAL EQUITY AND LIABILITIES 142 198 107 346
NET ASSET VALUE PER SHARE (CENTS) 220 134
ABRIDGED CONSOLIDATED CASH FLOW
JUNE 2000 JUNE 1999
R '000 R '000
OPERATING CASH FLOW 48 092 36 020
MOVEMENT IN WORKING CAPITAL (9 285) (16 729)
NET INTEREST PAID (4 732) (3 888)
TAXATION PAID (9 872) (4 017)
DIVIDEND PAID (3 925) -
CASH GENERATED FROM
OPERATING ACTIVITIES 20 278 11 386
NET INFLOW FROM FINANCING ACTIVITIES 9 689 9 998
NET FIXED ASSETS ACQUIRED (20 775) (30 461)
9 192 (9 077)
OPENING NET CASH RESOURCES (19 129) (10 052)
CLOSING NET CASH RESOURCES (9 937) (19 129)
STATEMENT OF CHANGES IN EQUITY
JUNE 2000 JUNE 1999
R '000 R '000
OPENING BALANCE 43 785 21 147
EARNINGS ATTRIBUTABLE TO SHAREHOLDERS 31 428 20 582
ISSUE OF SHARE CAPITAL AND SHARE PREMIUM - 4 387
ACCUMULATED LOSS ACQUIRED
ON ACQUISITION OF SUBSIDIARY - (41)
DIVIDEND PAID (3 271) (2 290)
CLOSING BALANCE 71 942 43 785
NATURE OF BUSINESS
TRANSPACO OPERATES IN THE PLASTIC AND PACKAGING INDUSTRIES, MANUFACTURING AND
DISTRIBUTING FROM 10 FACILITIES WITH EMPHASIS IN:
* PACKAGING FOR THE RETAIL, INDUSTRIAL, AGRICULTURAL AND MINING SECTORS
* SCHOLASTIC AND OFFICE STATIONERY
* PLASTIC RECLAMATION AND RECYCLING
* VACUUM FORMING
* PLASTIC FABRICATION
* RAW MATERIAL TRADING IN LOCAL AND EXPORT MARKETS
REVIEW
THE YEAR TO 30 JUNE 2000 WAS CHARACTERISED BY CONSOLIDATION AND
RATIONALISATION. OPERATING INCOME GREW 17% TO R33,6 MILLION SUPPORTED BY A 34%
INCREASE IN SALES TO R238,4 MILLION. HOWEVER, THIS DID NOT TRANSLATE INTO AN
INCREASE IN EARNINGS PER SHARE FOR THE FOLLOWING REASONS:
* MARGINS WERE EFFECTED BY SUBSTANTIAL INCREASES IN RAW MATERIAL COSTS
RESULTING FROM INFLATED WORLD OIL PRICES AND A DEPRECIATION OF THE RAND. THESE
COST INCREASES COULD NOT BE RECOVERED IMMEDIATELY BUT MARGINS WILL CORRECT
THEMSELVES AS RAW MATERIAL PRICES STABILISE.
* ONE DIVISION DID NOT MEET PROFIT EXPECTATIONS. REMEDIAL ACTION HAS BEEN
TAKEN AND THE DIRECTORS ARE CONFIDENT THAT THIS DIVISION WILL REACH ITS
FORECASTS IN THE COMING YEAR.
GROUP INCOME BEFORE TAX AND EXCEPTIONAL ITEM WAS R23,4 MILLION -1999 ANNUALISED
R22,3 MILLION- WITH EARNINGS PER SHARE OF 50C FOR THE YEAR -1999 ANNUALISED
50C-.
EFFICIENT WORKING CAPITAL MANAGEMENT AND THE R18 MILLION CASH RECEIVED FROM THE
SALE OF BUBBLE PAC HAS RESULTED IN AN IMPROVED CASH POSITION AND A REDUCTION IN
THE DEBT EQUITY RATIO FROM 67% TO 42%.
THE NET ASSET VALUE INCREASED BY 86C PER SHARE OF WHICH 42C WAS CONTRIBUTED BY
RETAINED INCOME AND 44C BY THE PROFIT ON THE SALE OF THE BUBBLE PAC DIVISION.
THE FLEXIBLES DIVISION INVESTED R9,5 MILLION IN ESTABLISHING A NEW PRODUCTION
FACILITY. THIS EXPANSION IS REFLECTED IN THE GROUPS BALANCE SHEET WHILST WE
HAVE NOT HAD THE BENEFIT OF 12 MONTHS TRADING.
PLASTIC AND THE ENVIRONMENT
LITTER HAS BEEN IDENTIFIED AS A MAJOR SOURCE OF CONCERN AND MUST BE ADDRESSED
BY ALL SOUTH AFRICANS. THE PROPOSED LEGISLATION PERTAINING TO PLASTIC VEST TYPE
CARRIER BAGS IS UNLIKELY TO BE PROMULGATED IN ITS CURRENT FORM. TRANSPACO IS
COMMITTED TO A HEALTHY AND CLEAN ENVIRONMENT AND SUPPORTS THE DRIVE TOWARDS A
RECYCLING CULTURE. THE GROUP HAS MADE SUBSTANTIAL INVESTMENTS IN EXPANDING
SILVERPACK, ITS RECYCLING OPERATION, TO TAKE ADVANTAGE OF THE ANTICIPATED FLOW
OF POST CONSUMER WASTE.
THE CO-OPERATION BETWEEN GOVERNMENT, NATIONAL RETAILERS AND THE PLASTIC
INDUSTRY WILL CREATE OPPORTUNITIES FOR THE GROUP IN BOTH RECYCLING AND FINISHED
GOODS PRODUCTION.
PROSPECTS
TERBO PLASTICS -RIGID PVC FOIL- IS CURRENTLY INSTALLING PLANT AND EQUIPMENT TO
INCREASE PRODUCTION CAPACITY BY 50%. A R4 MILLION INVESTMENT WILL CATER FOR AN
INCREASE IN DEMAND FOR ITS PRODUCT.
FRAMEN -CORE WINDING- INSTALLED ADDITIONAL PLANT UPGRADING ITS EXISTING
FACILITIES AND INCREASING CAPACITY.
PLASTAFRICA -FLEXIBLE PLASTIC PACKAGING- HAS ENTERED THE REFUSE BAG MARKET AND
HAS INSTALLED THE NECESSARY EQUIPMENT TO MEET DEMAND.
PERANA -INJECTION MOULDING AND VACUUM FORMING- IS CURRENTLY UNDER-UTILISED. IT
HAS EMBARKED ON A CONCERTED MARKETING AND SALES DRIVE WHICH SHOULD PROVIDE
FUTURE BENEFITS AND GROWTH.
PE RECOVERIES IS EXPECTED TO BENEFIT FROM AN INCREASE IN EXPORT REVENUE
FOLLOWING ITS AGGRESSIVE ENTRY INTO THE INTERNATIONAL PLASTIC RAW MATERIAL
MARKET.
THE BOARD LOOKS FORWARD WITH ENTHUSIAM, CONFIDENCE AND A RETURN TO GROWTH IN
EARNINGS PER SHARE FOR THE YEAR AHEAD.
DIVIDEND DECLARATION
NOTICE IS HEREBY GIVEN THAT AN ORDINARY FINAL CASH DIVIDEND OF 5 CENTS PER
SHARE HAS BEEN DECLARED PAYABLE ON 6 OCTOBER 2000 TO SHAREHOLDERS REGISTERED IN
THE BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON 15 SEPTEMBER 2000. THE
TRANSFER BOOKS AND REGISTER OF MEMBERS WILL BE CLOSED FROM 18 SEPTEMBER 2000 TO
29 SEPTEMBER 2000, BOTH DAYS INCLUSIVE.
ON BEHALF OF THE BOARD:
S ABELHEIM P ABELHEIM
(CHAIRMAN) (CHIEF EXECUTIVE OFFICER)
31 AUGUST 2000
OTHER DIRECTORS: A AARON*, H BOTHA, K BOTHA, C BOUZAGLOU,
D HILEWITZ*, S JACOBSON*, E ROVETTI, A SHUB, C VIDERGAUZ
(* NON EXECUTIVE)
DIVISIONAL DIRECTORS: S CHAITEL, S HARMSE, K HARRIS, G HEROLDT,
L O'NEILL, C PHINN, A NORRIS, C TAYLOR, J WATTERS
COMPANY SECRETARY: SL CHAITEL
AUDITORS: ERNST & YOUNG
TRANSPACO POSTS SOLID RESULTS
THURSDAY, AUGUST 31, 2000
CONSOLIDATION AND RATIONALISATION IN LISTED PLASTIC AND PACKAGING GROUP
TRANSPACO LIMITED ("TRANSPACO") PRODUCED A SOLID SET OF RESULTS FOR THE YEAR
ENDED 30 JUNE 2000. OPERATING INCOME ROSE 17% TO R33,6 MILLION, SUPPORTED BY A
34% INCREASE IN SALES TO R238,4 MILLION.
HOWEVER, THE EARNINGS GROWTH DID NOT TRANSLATE INTO AN INCREASE IN HEADLINE
EARNINGS PER SHARE. BEFORE TAX INCOME GREW 5% TO R23,4 MILLION (1999
ANNUALISED: R22,3 MILLION) EQUATING TO EARNINGS OF 50 CENTS PER SHARE (1999
ANNUALISED: 50 CENTS).
CHIEF EXECUTIVE OFFICER PHIL ABELHEIM EXPLAINS, "OUR OPERATING MARGINS WERE
SEVERELY AFFECTED BY SUBSTANTIAL INCREASES IN RAW MATERIAL COSTS AS A RESULT OF
THE INFLATED WORLD OIL PRICES AND THE DEPRECIATED VALUE OF THE RAND. ALTHOUGH
THESE COST INCREASES COULD NOT BE RECOVERED IMMEDIATELY, THE MARGINS WILL
SELF-CORRECT AS RAW MATERIAL PRICES STABILISE. IN ADDITION, ONE OF THE GROUP'S
DIVISIONS DID NOT MEET PROFIT EXPECTATIONS, WHICH FURTHER IMPACTED ON EARNINGS.
APPROPRIATE REMEDIAL ACTION HAS BEEN TAKEN, PUTTING THE DIVISION BACK ON TRACK
TO MEET FORECASTS IN THE COMING YEAR."
WITH REGARD TO THE BALANCE SHEET, ABELHEIM ADVISES THAT EFFICIENT WORKING
CAPITAL MANAGEMENT AND THE R18,0 MILLION CASH RECEIVED FROM THE SALE OF BUBBLE
PAC HAVE RESULTED IN AN IMPROVED CASH POSITION AND A REDUCTION IN THE GROUP'S
DEBT EQUITY RATIO FROM 67% TO 42%. NET ASSET VALUE PER SHARE INCREASED BY 86
CENTS TO 220 CENTS, OF WHICH 42 CENTS WAS CONTRIBUTED BY RETAINED INCOME AND 44
CENTS BY THE BUBBLE PAC TRANSACTION.
COMMENTING ON THE PROPOSED LEGISLATION PERTAINING TO PLASTIC VEST-TYPE CARRIER
BAGS, ABELHEIM SAYS, "LITTER HAS BEEN IDENTIFIED AS A MAJOR SOURCE OF CONCERN
AND MUST BE ADDRESSED BY ALL SOUTH AFRICANS. WHILE THE PROPOSED LEGISLATION IS
NOT LIKELY TO BE PROMULGATED IN ITS CURRENT FORM, TRANSPACO REMAINS COMMITTED
TO A HEALTHY AND CLEAN ENVIRONMENT AND SUPPORTS THE DRIVE TOWARDS A RECYCLING
CULTURE. WE BELIEVE THAT THE CO-OPERATION BETWEEN GOVERNMENT, NATIONAL
RETAILERS AND THE PLASTIC INDUSTRY WILL CREATE OPPORTUNITIES FOR THE GROUP IN
BOTH RECYCLING AND FINISHED GOODS PRODUCTION."
TO THIS END, WE HAVE MADE SUBSTANTIAL INVESTMENTS IN UPGRADING OUR RECYCLING
OPERATION - SILVERPACK - TO TAKE ADVANTAGE OF THE ANTICIPATED INCREASED FLOW OF
POST CONSUMER WASTE."
LOOKING AHEAD, ABELHEIM IS CONFIDENT THAT TRANSPACO IS WELL-POSITIONED TO MEET
THE CHALLENGES OF THE FUTURE. HE CITES A NUMBER OF STRENGTHENING INITIATIVES
WITHIN THE GROUP'S OPERATIONS, INCLUDING;
* THE INSTALLATION OF PLANT AND EQUIPMENT TO INCREASE PRODUCTION CAPACITY BY
50% AT RIGID PVC FOIL PRODUCER TERBO PLASTICS, DESIGNED TO CATER FOR INCREASED
DEMAND;
* THE INSTALLATION OF ADDITIONAL PLANT AT CORE WINDING DIVISION FRAMEN PAPER,
EFFECTIVELY UPGRADING THE EXISTING FACILITIES AND INCREASING CAPACITY;
* THE ENTRY OF FLEXIBLE PLASTIC PACKAGING OPERATION PLASTAFRICA INTO THE
REFUSE BAG MARKET THROUGH THE INSTALLATION OF THE NECESSARY EQUIPMENT;
* A CONCERTED MARKETING AND SALES DRIVE AT INJECTION MOULDING AND VACUUM
FORMING DIVISION PERANA IN ORDER TO BOOST CAPACITY UTILISATION; AND
* THE AGGRESSIVE ENTRY OF PE RECOVERIES INTO THE INTERNATIONAL PLASTIC RAW
MATERIAL MARKET, WHICH IS CERTAIN TO BOOST EXPORT REVENUES.
"WE ARE CONFIDENT OF ACHIEVING REAL GROWTH IN THE YEAR AHEAD," SAYS ABELHEIM.
"WE HAVE THE INFRASTRUCTURE, THE PRODUCTION CAPACITY AND THE RESOURCES TO
DELIVER. THIS, TOGETHER WITH THE OPTIMISM AND ENTHUSIASM OF OUR PEOPLE, WILL
TAKE US FORWARD."
ENDS
ISSUED BY: MICHELE ANDERSON
SASANI COMMUNICATIONS
(011) 784 2598
ON BEHALF OF: TRANSPACO
CONTACT: PHIL ABELHEIM
(011) 887 0430