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Transpaco Limited - Interim Group Results For The 6 Months Ended 31 December 2004 TRANSPACO LIMITEDReg. No. 1951/000799/06ISIN: ZAE000007480Share Code: TPCINTERIM GROUP RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2004 HIGHLIGHTS INCREASE HEADLINE EARNINGS PER SHARE 48,7c 15% DIVIDEND PER SHARE 8c 14% NAV PER SHARE 392c 18%CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Audited 6 months 6 months % 12 months R"000 Dec 2004 Dec 2003 Change Jun 2004 Turnover 170 340 157 904 8 300 796 Cost of sales 110 258 101 578 9 193 651 Gross Profit 60 082 56 326 7 107 145 Operating Costs 35 728 33 585 6 67 309 Depreciation 5 994 4 915 22 10 277 Operating Income 18 360 17 826 3 29 559 Net interest paid 1 042 1 542 (32) 2 871 Income before taxation 17 318 16 284 6 26 688 Taxation 3 929 4 254 (8) 6 693 Current taxation 2 609 2 577 4 670 Deferred taxation 898 1 102 1 179 Secondary taxation on 422 575 844 companies Income after taxation 13 389 12 030 11 19 995 Weighted average number of 27 319 27 823 27 239 shares in issue ("000) Diluted weighted average 29 375 29 878 29 203 number of shares in issue ("000) Earnings per share (cents) 49.0 43.2 13 73.4 Diluted earnings per share 45.6 40.3 13 68.5 (cents) Headline earnings per share 48.7 42.3 15 71.8 (cents) Diluted headline earnings 45.3 39.4 15 67.0 per share (cents) Dividend per share (cents)* 8.0 7.0 18.0 Reconciliation of headline earnings (R"000) Basic earnings 13 389 12 030 19 995 Profit on disposal of plant (85) (263) (426) and equipment Headline earnings 13 304 11 767 13 19 569 *Dividend declared after the periodCONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 6 months 6 months 12 months
R"000 Dec 2004 Dec 2003 Jun 2004 ASSETS Non-current assets 79 148 67 598 67 508 Property, plant and equipment 78 566 66 984 66 908 Intangibles 582 614 600 Current assets 123 881 97 927 104 741 Inventories 37 048 22 932 28 104 Accounts receivable 79 312 73 513 57 930 Taxation 2 760 1 436 3 493 Cash resources 4 761 46 15 214 TOTAL ASSETS 203 029 165 525 172 249 EQUITY AND LIABILITIES Capital and reserves 107 275 91 980 96 747 Issued capital 276 278 275 Reserves 1 688 1 688 1 688 Accumulated profit 105 311 90 014 94 784 Non-current liabilities 31 509 25 300 19 116 Interest bearing borrowings 27 488 22 253 15 993 Deferred taxation 4 021 3 047 3 123 Current liabilities 64 245 48 245 56 386 Trade and other payables 56 619 37 566 49 144 Bank overdraft 0 738 0 Current portion of interest 7 626 9 941 7 242 bearing borrowings TOTAL EQUITY AND LIABILITIES 203 029 165 525 172 249 Number of shares in issue `000 `000 `000 Number of shares in issue 27 214 28 089 27 786 (net of 3 338 854 treasury shares) Net movement on treasury shares 139 (322) (572) Ranking number of shares 27 353 27 767 27 214 Salient features Net asset value per share 392 331 356 (cents) Gearing ratio % 28 36 8 Shareholders Funds: Total 54 56 62 assets % Interest cover (x) 17.6 11.6 10.3 Operating margin % 10.8 11.3 9.8 ABRIDGED CONSOLIDATED CASH FLOW Unaudited Unaudited Audited 6 months 6 months 12 months R"000 Dec 2004 Dec 2003 Jun 2004 Cash flow from operating activities Cash generated from 1 418 3 898 42 819 operations Dividend paid (3 050) (4 165) (6 106) Finance charges (1 042) (1 542) (2 871) Taxation paid (2 298) (1 362) (5 781) Net cash flow from operating (4 972) (3 171) 28 061 activities Cash flow from investing activities Proceeds on disposal plant 158 870 2 006 and equipment Acquisition of plant and (17 707) (18 231) (24 477) equipment Net cash flow from investing (17 549) (17 361) (22 471) activities Cash flow from financing activities Increase in long term 11 495 9 544 3 284 borrowings Increase in short term 384 3 161 462 borrowings Employee compensation reserve 0 0 (130) Net movement on treasury 189 (976) (2 103) shares Net cash flow from financing 12 068 11 729 1 513 activities Net movement in cash for the (10 453) (8 803) 7 103 period Cash and cash equivalents at 15 214 8 111 8 111 the beginning of the year Cash and cash equivalents at 4 761 (692) 15 214 the end of the period STATEMENT OF CHANGES IN EQUITY Unaudited Unaudited Audited 6 months 6 months 12 months
R"000 Dec 2004 Dec 2003 Jun 2004 Opening balance 96 747 85 091 85 091 Earnings attributable to 13 389 12 030 19 865 shareholders Dividend paid (3 050) (4 165) (6 106) Net movement on treasury 189 (976) (2 103) shares Closing balance 107 275 91 980 96 747 NATURE OF BUSINESSTranspaco is a leading plastic products and packaging manufacturer, recycler and distributor.BUSINESS REVIEWThe board is pleased to report results reflecting an increase in headline earnings per share of 15% to 48,7 cents (Dec 2003: 42,3 cents) Turnover increased by 8% to R170 million (Dec 2003: R158 million), mainly attributable to volume growth and to a lesser extent price increases. The increase in turnover and the containment of manufacturing expenses, neutralised the effect of the raw material price increases, which proved difficult to pass on in light of a low inflationary environment. Low cost import competition further placed pressure on the group"s margins which were reduced to maintain market share. Operating costs were well managed. Depreciation grew by 22% due to plant expansions at the Recycling and Rigid divisions. Net interest paid decreased by 32% to R1,0 million (Dec 2003: R1,5 million) resulting from strong cash management. Interest cover increased to 17,6 times (Dec 2003: 11,6 times). Tax payable reduced by 8% to R3,9 million (Dec 2003: R4,3 million) due to the tax holiday enjoyed by our facility in KwaNdebele. The establishment of a pallet wrap and cast polypropylene division (Specialised Films) in November accounted for an increase in Property, Plant and Equipment of 17% to R78 million (Dec 2003: R67 million). The increase in inventory levels is due to: - the explosion at Transpaco"s major raw material supplier which raised concerns of a raw material shortage, necessitating increased inventory levels; - an average increase of 50% in the cost of raw materials during the year; - the establishment of the new Specialised Films division. PROSPECTSTranspaco"s expansion into the Specialised Film division came on stream during November with sales exceeding expectations. The board is optimistic that this development will provide growth for the group in the years ahead. Margins continue to be under pressure with management making a concerted effort to alleviate the negative effects of the high raw material prices and low cost import competition. Notwithstanding that the manufacturing sector is under pressure, Transpaco remains optimistic in achieving its objectives of attaining real earnings growth for the 2005 financial year.BEE INITIATIVE AND PROPOSED ACQUISITION As recorded in the cautionary announcement dated 15 February 2005: - Transpaco continues to be involved in negotiations with a BEE party which if finalised will transform Transpaco into a broad based black economic empowered entity; - negotiations are at an advanced stage for the acquisition of a packaging entity, details of which will be made available at the appropriate time. If the transaction is finalised the acquisition will add further growth to the group. DIVIDEND The board has declared an interim dividend of 8 cents per share to shareholders recorded in the register on Friday 1 April 2005 payable on Monday 4 April 2005. The last day to trade "cum" dividend will be Wednesday, 23 March 2005. Shares will commence trading "ex" dividend from the commencement of business on Thursday, 24 March 2005. The record date will be Friday, 1 April 2005. Share certificates may not be dematerialised or rematerialised between Thursday, 24 March 2005 and Friday, 1 April 2005, both days inclusive.BASIS OF ACCOUNTINGThese unaudited results are prepared in accordance with South African statements of Generally Accepted Accounting Practice, the Companies Act and the listing requirements of the JSE Securities Exchange South Africa. The accounting policies used are consistent in all material respects with those applied in the audited financial statements for the year ended June 2004. ON BEHALF OF THE BOARDAJ Aaron PN Abelheim L WeinbergNon- executive Chairman Chief Executive Financial Director DATE 23 February 2005DirectorsAJ Aaron* (Chairman); PN Abelheim (Chief Executive); HA Botha; JS Botha; SR Bouzaglou; SL Chaitel; DR Hilewitz*; SI Jacobson*; AC Salomon*; SP van der Linde*; L Weinberg *non-executive Website www.transpaco.co.zaAuditors Ernst & YoungSponsor Investec Bank LimitedRegistered Office 331 6th Street, Wynberg, SandtonTransfer Secretaries Computershare Investor Services 2004 (Pty) Ltd70 Marshall Street, Johannesburg Date: 23/02/2005 04:06:32 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
