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NAMPAK LIMITED
REGISTRATION NUMBER 1968/008070/06
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
GROUP RESULTS AND DIVIDEND DECLARATION - YEAR ENDED 30 SEPTEMBER 2000
THE AUDITED CONSOLIDATED RESULTS OF THE GROUP FOR THE YEAR ARE SET OUT BELOW.
INCOME STATEMENT
2000 1999 %
RM RM CHANGE
REVENUE 9 854,1 7 942,9 24
PROFIT FROM OPERATIONS 970,5 824,9 18
DIVIDEND INCOME - 4,9
NET INTEREST (PAID)/RECEIVED (58,3) 30,6
PROFIT BEFORE TAXATION AND
ABNORMAL ITEMS 912,2 860,4
ABNORMAL ITEMS (10,0) 1,5
PROFIT BEFORE TAXATION 902,2 861,9
TAXATION 229,1 233,4
PROFIT AFTER TAXATION 673,1 628,5
ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS IN SUBSIDIARIES 48,1 27,6
ATTRIBUTABLE TO SHAREHOLDERS
IN NAMPAK LIMITED 625,0 600,9 4
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES ON WHICH HEADLINE
EARNINGS AND ATTRIBUTABLE PROFIT
PER SHARE ARE BASED (000) 509 050 508 756
BASIC EARNINGS PER ORDINARY
SHARE (CENTS) 122,8 118,1 4
HEADLINE EARNINGS PER ORDINARY
SHARE (CENTS) 123,1 117,6 5
DIVIDENDS PER ORDINARY SHARE
(CENTS) 53,3 51,0 5
DETERMINATION OF HEADLINE EARNINGS
NET PROFIT PER INCOME STATEMENT 625,0 600,9
ADJUSTED FOR :
LOSS/(PROFIT) ON SALE OF
OPERATIONS NET OF TAXATION 2,0 (3,1)
LOSSES ON RE-ORGANISATION OF DEBT 2,3 -
(PROFIT)/LOSS ON SALE OF FIXED
ASSETS NET OF TAXATION (2,4) 0,6
HEADLINE EARNINGS FOR THE YEAR 626,9 598,4
ABRIDGED BALANCE SHEET
2000 1999
RM RM
ASSETS
NON-CURRENT ASSETS
FIXED ASSETS AND INVESTMENTS 3 725,6 2 496,4
CURRENT ASSETS 3 405,0 3 022,4
INVENTORIES 1 182,6 975,8
TRADE & OTHER ACCOUNTS
RECEIVABLE 1 726,8 1 326,5
CASH RESOURCES 495,6 720,1
TOTAL ASSETS 7130,6 5 518,8
EQUITY & LIABILITIES
TOTAL SHAREHOLDERS' FUNDS 2 777,5 3 202,7
NON-CURRENT LIABILITIES
DEFERRED TAXATION 391,8 242,9
INTEREST BEARING DEBT 1 485,7 268,4
4 655,0 3 714,0
CURRENT LIABILITIES
ACCOUNTS PAYABLE, PROVISIONS
AND SHAREHOLDERS FOR DIVIDEND 2 475,6 1 804,8
7 130,6 5 518,8
NET WORTH PER SHARE (CENTS) 500,1 587,3
ABRIDGED CASH FLOW STATEMENT
2000 1999
RM RM
CASH OPERATING PROFIT 1 358,9 1 137,9
WORKING CAPITAL CHANGES 66,0 (164,3)
CASH GENERATED FROM OPERATIONS 1 424,9 973,6
REQUIRED FOR OPERATIONS (438,9) (356,1)
NET CASH INFLOW FROM OPERATING
ACTIVITIES 986,0 617,5
CASH OUTFLOW FROM INVESTING
ACTIVITIES (2 466,2) (434,6)
NET CASH (OUTFLOW)/INFLOW BEFORE
FINANCING ACTIVITIES (1 480,2) 182,9
CASH INFLOW FROM FINANCING
ACTIVITIES 1 150,6 96,8
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (329,6) 279,7
REVIEW OF RESULTS
AS INDICATED AT THE HALF YEAR THE DEMAND FOR NON-DURABLE GOODS WAS WEAK, AND
THIS PATTERN HAS CONTINUED FOR THE SECOND HALF. IT IS APPARENT THAT ANY
BENEFIT FROM TAX AND INTEREST RATE CUTS TO THE CONSUMER HAS BEEN ABSORBED INTO
THE DURABLE AND SEMI-DURABLE MARKETS. CELLPHONES, THE LOTTERY, CASINOS AND
HIGHER FUEL COSTS HAVE ALSO ADVERSELY AFFECTED CONSUMER SPENDING ON NON-DURABLE
GOODS.
THE RESULTS REFLECT THE FULL IMPACT OF THE ACQUISITIONS MADE LAST YEAR AND THE
INCLUSION OF PLYSU FROM 1 JANUARY 2000. TURNOVER INCREASED BY 24% AND
OPERATING PROFIT BY 18%. MARGINS FELL FROM 10,4% TO 9,9% AS A RESULT OF
MINIMAL GROWTH IN DOMESTIC VOLUMES, CONTINUED PRESSURE ON PRICING AND INCREASED
RAW MATERIAL PRICES THAT COULD NOT BE PASSED ON TO CUSTOMERS.
A CHANGE FROM INTEREST RECEIVED TO INTEREST PAID, AS A RESULT OF THE LOANS OF
R1,5 BILLION RAISED TO FUND THE PLYSU ACQUISITION, AND THE INCLUSION OF THE
CROWN NAMPAK MINORITIES FOR THE FIRST FULL YEAR OF OPERATION, IMPACTED ON
HEADLINE EARNINGS WHICH GREW BY ONLY 5% FROM 117,6 CPS TO 123,1 CPS.
CASH FLOWS REMAINED STRONG, AND THE GROUP ENDED THE YEAR WITH NET DEBT BELOW R1
BILLION - A GEARING LEVEL OF 36%.
PLANNED DISPOSALS OF NON-CORE ACTIVITIES CONTINUED, WITH THE DISPOSAL OF THE
MONO CONTAINERS OPERATION TO HUHTAMAKI-VAN LEER FOR R58 MILLION.
ACQUISITION
PLYSU PLC, A COMPANY LISTED ON THE LONDON STOCK EXCHANGE, WAS ACQUIRED IN
DECEMBER 1999 AND CONSOLIDATED WITH EFFECT FROM 1 JANUARY 2000.
THE ACQUISITION HAS PROCEEDED AS PLANNED AND PLYSU AND BLOWMOCAN ARE NOW
AMALGAMATED AND THE BENEFITS OF THE SYNERGIES AND IMPROVED MANAGEMENT FOCUS ARE
BEGINNING TO FLOW THROUGH. THE EFFECT OF THE ACQUISITION IN THE YEAR UNDER
REVIEW WAS NOT MATERIAL TO HEADLINE EARNINGS. GOODWILL OF R680 MILLION
INCURRED ON ACQUISITION WAS WRITTEN OFF TO RESERVES.
DIVISIONAL PERFORMANCE
METALS
TURNOVER GREW BY 6% BUT ONGOING PRESSURE ON MARGINS AND A COOL AND WET SUMMER
WHICH RESULTED IN A LOWER CONSUMPTION OF BEVERAGES, CAUSED OPERATING PROFIT TO
FALL BY 12%. VOLUMES IN FOOD CAN AND OTHER METAL CONTAINERS WERE STATIC.
PAPER
THE MARKET IN THIS SECTOR REMAINED DIFFICULT, AND WAS ADVERSELY AFFECTED BY A
POOR AGRICULTURAL SEASON, SEVERE FLOODS AND LOWER DEMAND FROM THE COMMERCIAL
AND INDUSTRIAL SECTORS. CORRUGATED AND PRINTPAK RECOVERED WELL OFF A LOW BASE
DUE TO EFFICIENCY IMPROVEMENTS AND COST REDUCTIONS.
TISSUE MARGINS AND VOLUMES SUFFERED AS A RESULT OF THE WEAK CONSUMER DEMAND
EXPERIENCED DURING THE YEAR, AND THE INCREASE IN THE PRICE OF PULP AND WASTE
PAPER, THAT COULD NOT BE RECOVERED THROUGH SELLING PRICES. RATIONALISATION
BENEFITS FOLLOWING THE ACQUISITION MADE LAST YEAR RESULTED IN AN IMPROVED
PROFIT.
PLASTICS
WITH THE INCLUSION OF PLYSU THIS SECTOR SHOWED A SIGNIFICANT INCREASE IN
TURNOVER. HOWEVER, THE SHARP INCREASE IN POLYMER PRICING COULD NOT BE PASSED
ON IN SELLING PRICES DUE TO HIGH COMPETITIVE PRESSURES. THE IMPACT ON THE
SOUTH AFRICAN OPERATIONS WAS PARTICULARLY SEVERE AND OPERATING PROFIT FOR THE
SOUTH AFRICAN OPERATIONS DECLINED SUBSTANTIALLY.
NAMITECH (FORMERLY BDM TECHNOLOGIES)
NAMITECH SHOWED A GROWTH IN BOTH TURNOVER AND OPERATING PROFIT ASSISTED BY THE
RAPIDLY GROWING MARKET FOR PRE-PAID RECHARGE VOUCHERS FOR THE CELLPHONE
INDUSTRY.
AFRICA
DESPITE THE UNCERTAINTY CAUSED BY THE ZIMBABWEAN SITUATION THE GROUP'S AFRICAN
INVESTMENTS CONTINUED TO CONTRIBUTE TO PROFITS.
IN ZAMBIA THE SHAREHOLDING IN INTERNATIONAL CARTONS AND PACKAGING WAS INCREASED
TO 100%.
PROSPECTS
FOR SOME TIME NOW THE SOUTH AFRICAN ECONOMY HAS FAILED TO MEET GROWTH
EXPECTATIONS. THE GROUP HAS FORMULATED COMPREHENSIVE PLANS TO SUPPORT THE
PROFIT BASE WITH SPECIAL EMPHASIS ON COST REDUCTION (ESPECIALLY IN GENERAL AND
ADMINISTRATIVE COSTS), IMPROVED PROCUREMENT AND IMPROVED MARKETING SOLUTIONS TO
CUSTOMERS.
EUROPE WILL REMAIN THE MAIN THRUST FOR INVESTMENT AND EXPANSION. THE
CONTRIBUTION TO THE OPERATING PROFIT WILL INCREASE MATERIALLY IN 2001 FROM THIS
AREA.
MANAGEMENT HAS BEEN RESTRUCTURED TO DRIVE EARNINGS GROWTH IN THESE DIFFICULT
ECONOMIC TIMES WITHOUT LIMITING THE ABILITY TO GROW THE BUSINESS.
NAMITECH WILL CONTINUE TO BE A GROWTH BUSINESS DRIVEN BY ITS TECHNOLOGY FOCUS
IN THE TELECOMMUNICATIONS SECTOR.
DESPITE THE EXPECTED CONTINUED LOW LEVEL OF PERFORMANCE OF THE SOUTH AFRICAN
AND AFRICAN ECONOMIES AND THE COSTS REQUIRED TO RESTRUCTURE THE SOUTH AFRICAN
OPERATION, IT IS EXPECTED THAT THERE WILL BE SOME EARNINGS GROWTH NEXT YEAR
WITH THE REAL BENEFITS OF THE VARIOUS NEW INITIATIVES EVIDENT IN 2002.
DIVIDEND
THE BOARD HAS DECLARED A FINAL DIVIDEND (NO. 64) OF 37,2 CENTS PER SHARE (1999
: 34,9 CENTS) PAYABLE TO SHAREHOLDERS REGISTERED ON 1 DECEMBER 2000, MAKING A
TOTAL DISTRIBUTION FOR THE YEAR OF 53,3 CENTS (1999 : 51,0 CENTS). PAYMENT OF
DIVIDENDS BY WAY OF ELECTRONIC FUNDS TRANSFER WILL BE MADE ON 8 JANUARY 2001.
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 2001.
ON BEHALF OF THE BOARD
B P CONNELLAN CHAIRMAN
T EVANS DEPUTY CHAIRMAN AND CHIEF EXECUTIVE OFFICER
7 NOVEMBER 2000
DIRECTORS : B P CONNELLAN* (CHAIRMAN), T EVANS (DEPUTY CHAIRMAN AND CEO), G E
BORTOLAN (MANAGING - SOUTH AFRICA AND AFRICA), 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 G TOMLINSON, R A
WILLIAMS*.
ALTERNATES: P A DE WEERDT, A D S MORAIS (PORTUGUESE), S C NGIDI.
*NON EXECUTIVE
REGISTERED OFFICE: NAMPAK CENTRE, 114 DENNIS ROAD, ATHOLL GARDENS, SANDTON
2196.
(PO 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. (PO BOX 1053, JOHANNESBURG 2000, SOUTH AFRICA). TELEPHONE
: +27 11 370-5000
EUROPEAN ACQUISITION LIFTS NAMPAK
PRESS RELEASE
CONTINUING WEAK CONSUMER SPENDING ON NON-DURABLES AND THE WET WEATHER EARLIER
THIS YEAR RESULTED IN LOWER DEMAND FOR NAMPAK'S PACKAGING. CONSUMER SPENDING
ON NON-DURABLES ESPECIALLY WAS ADVERSELY AFFECTED BY CHANGING CONSUMER PATTERNS
WITH A GREATER PROPORTION OF PERSONAL DISPOSABLE INCOME GOING ON CELLPHONES,
THE LOTTERY, CASINOS AND HIGHER FUEL COSTS.
THE ACQUISITION OF PLYSU IN THE UNITED KINGDOM HELPED TO LIFT TOTAL TURNOVER BY
24% TO JUST UNDER R10 BILLION IN 2000. OPERATING PROFIT INCREASED BY 18% TO
R971 MILLION BUT THE IMPACT OF HIGHER INTEREST AND MINORITY SHAREHOLDINGS
RESULTED IN HEADLINE EARNINGS PER SHARE GROWING BY ONLY 5% IN THE YEAR ENDED
SEPTEMBER 2000.
DEPUTY CHAIRMAN AND CEO, TREVOR EVANS, SAID THAT THE ACQUISITION OF PLYSU AND
ITS INTEGRATION WITH BLOWMOCAN HAD PROCEEDED WELL AND HAD ALREADY RESULTED IN
COST SAVINGS, THE FULL BENEFIT OF WHICH WILL BE REALISED IN THE YEAR AHEAD.
THIS HAD CREATED A SOUND PLATFORM IN EUROPE WHERE FURTHER ACQUISITIONS WOULD BE
SOUGHT IN THE COMING YEARS.
EVANS SAID THAT THE VERY LOW GROWTH IN PACKAGING VOLUMES IN SOUTH AFRICA,
COUPLED WITH HIGHER RAW MATERIAL PRICES THAT COULD NOT BE FULLY RECOVERED AND
ONGOING SELLING PRICE PRESSURE, RESULTED IN THE OVERALL GROUP MARGIN DECLINING
FROM 10,4% TO 9,9%.
IN THE METALS SECTOR TURNOVER GREW BY ONLY 6% MAINLY AS A RESULT OF LOWER
BEVERAGE CAN SALES WHICH WERE PARTICULARLY HARD HIT BY THE WET SUMMER AND AN
INCREASING CONSUMER PREFERENCE FOR BEER AND CIDER IN GLASS BOTTLES. OPERATING
PROFIT WAS DOWN BY 12% AND REFLECTS THE LOWER SALES AND PRESSURE ON SELLING
PRICES.
THE PAPER SECTOR PERFORMED WELL ON THE STRENGTH OF THE ACQUISITIONS AND COST
REDUCTIONS IN TISSUE, AS WELL AS EFFICIENCY IMPROVEMENTS IN CORRUGATED AND
PRINTPAK. EVANS NOTED THE PLEASING IMPROVEMENT IN THIS SECTOR WHICH INCREASED
OPERATING PROFIT BY 60% ON ONLY AN 11% INCREASE IN SALES.
HIGHER POLYMER RAW MATERIAL PRICES HAD A SEVERE IMPACT ON THE PLASTICS SECTOR,
AND OPERATING MARGINS CAME UNDER SEVERE PRESSURE PARTICULARLY IN SOUTH AFRICA.
EVANS SAID THAT OVERALL IT HAD BEEN A DIFFICULT YEAR FOR THE GROUP AS THE SOUTH
AFRICAN ECONOMY CONTINUED TO PERFORM BELOW EXPECTATIONS AND CONSUMERS DIVERTED
MORE OF THEIR SPENDING AWAY FROM NON-DURABLE ITEMS UPON WHICH MUCH OF PACKAGING
DEPENDS. HOWEVER, HE SAID THAT HE WAS PLEASED WITH THE WAY THE VARIOUS
ACQUISITIONS HAD BEEN INTEGRATED INTO THE GROUP.
EVANS SAID THAT NOTWITHSTANDING CAPITAL EXPENDITURE OF OVER R400 MILLION AND
THE ACQUISITION OF PLYSU FOR ALMOST R1 BILLION THE GROUP'S CASH POSITION
REMAINED STRONG. BORROWINGS AT YEAR END WERE LESS THAN R1 BILLION WITH A
GEARING OF 36%.
LOOKING AHEAD TO NEXT YEAR, HE SAID THAT MEANINGFUL VOLUME GROWTH WILL DEPEND
ON THE EXTENT OF GROWTH OF NON-DURABLES IN THE SOUTH AFRICAN ECONOMY. NO
RELIANCE IS HOWEVER BEING PLACED ON THIS AND PLANS ARE IN PLACE TO FURTHER
REDUCE THE COST STRUCTURE OF THE GROUP WHICH WOULD ENSURE THAT OPERATING PROFIT
CONTINUES TO INCREASE. THE COSTS OF RESTRUCTURING WILL HOWEVER DEPRESS
EARNINGS IN 2001.
THE MAIN FOCUS OF INVESTMENT AND EXPANSION WOULD BE EUROPE AND IT IS EXPECTED
THAT THIS REGION'S CONTRIBUTION TO BOTH SALES AND OPERATING PROFIT WOULD
INCREASE STILL FURTHER IN THE YEAR AHEAD.
NAMITECH, FORMERLY BDM TECHNOLOGIES, OPERATED IN AN AREA OF THE ECONOMY
EXPERIENCING ABOVE-AVERAGE GROWTH AND THIS BUSINESS WOULD BE EXPANDED, DRIVEN
BY ITS TECHNOLOGY FOCUS IN THE TELECOMMUNICATIONS AND SMART CARD ENABLED
BUSINESS SOLUTIONS SECTORS, HE SAID.
EVANS CONCLUDED BY SAYING THAT ALTHOUGH 2001 WILL BE ANOTHER TOUGH YEAR, THE
BENEFITS OF THE COST REDUCTIONS IN SOUTH AFRICA AND EXPANSION IN EUROPE WILL
FLOW THROUGH IN 2002 AND BEYOND. ANY GROWTH IN THE SOUTH AFRICAN ECONOMY WILL
OBVIOUSLY BE A WELCOME BONUS AND WILL CONTRIBUTE TO EARNINGS GROWING AT A
FASTER PACE THAN PLANNED.
7 NOVEMBER 2000
PRODUCED AND RELEASED BY NAMPAK LIMITED
FOR FURTHER INFORMATION PLEASE CONTACT TREVOR EVANS ON +27 11 7196363
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