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TPC - Transpaco Limited - Reviewed results: year ended 30 June 2007 and dividend
TRANSPACO LIMITED
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2007 AND DIVIDEND ANNOUNCEMENT
A leading manufacturer, recycler and distributor of plastic and paper packaging
products
REVENUE UP 59%
HEADLINE EARNINGS PER SHARE UP 41%
DIVIDEND PER SHARE UP 25%
INTRODUCTION
Robust organic growth, complemented by the benefits of acquisitions during the
year, resulted in an outstanding performance by Transpaco for the year ended 30
June 2007 ("the year").
CORPORATE ACTIVITY
The previously announced acquisitions of the plastic recycling facility in
Johannesburg, acquired from Sasol Products Limited effective 1 September 2006,
and the Cape-based retail plastic bag business acquired from Nampak Products
Limited effective 6 December 2006 ("the acquisitions"), are currently being
successfully integrated and have both contributed positively to group profit.
Transfer of the property in Bellville, Western Cape housing the Cape-based
plastic bag facility was completed in June 2007. Market response to the
acquisitions has been favourable.
FINANCIAL RESULTS
Headline earnings per share increased by 41% to 83,0 cents (June 2006: 58,8
cents). Revenue grew by 59% to R543,3 million (June 2006: R341,0 million) as a
result of both organic growth and acquisitions. This, together with stringent
expense control and improved manufacturing efficiency, drove an increase in
operating profit of 52% to R39,6 million (June 2006: R26,1 million). High raw
material costs continued to impact on gross profit margins. The increase in
operating expenses, depreciation and interest paid is attributable to the
acquisitions, additional plant purchased and a general increase in activities
across the group. Notwithstanding increased interest-bearing debt, interest
cover remains at a comfortable 5,3 times.
Cash generated from operations amounted to R13,6 million (June 2006: R35,2
million).The movement is the result of the working capital required at the Cape-
based retail plastic bag business. The ranking and weighted average number of
ordinary shares in issue increased due to 1 080 000 shares taken up during the
year in terms of the Transpaco Share Option Scheme. Diluted earnings per share
are affected by those shares and share options over 1 271 000 ordinary shares
allocated during the year. Net asset value per share increased by 12% to 449
cents (June 2006: 400 cents).
PROSPECTS
The acquisitions, which are earnings-enhancing, are expected to continue
impacting positively on group earnings. Transpaco will derive the benefit of the
acquisitions for the first time of a full 12 month period in the year to June
2008.
Additional plant at Britepak, Recycling and Specialised Films has been purchased
at a cost of R31,7 million, but has not yet been installed. This is also
expected to be earnings-enhancing. The benefits of the relaunched "Jiffy"-
branded domestic plastic bag products, which incurred significant initial costs
during the latter part of the year, should start to be realised in future years.
Ongoing organic growth remains a strategic objective of Transpaco, supported by
its continued policy of actively pursuing appropriate acquisition opportunities
that complement its existing businesses and expand and enhance its product
offering.
TRANSFORMATION
Post the group`s broad-based BEE transaction in 2005, which saw CEPPWAWU
Investments acquire a 27% stake in the group, Transpaco remains committed to the
process of transformation. CEPPWAWU Investments is a wholly-owned subsidiary of
The CEPPWAWU Development Trust which benefits the 70 000 members of CEPPWAWU
(Chemical, Energy, Paper, Printing, Wood and Allied Workers Union) including
many of Transpaco`s and its customers` staff. With the guidance and assistance
of the group`s BBBEE partners, scorecard requirements are continually being
addressed.
DIVIDEND
The board has declared a final dividend of 15 cents (June 2006:12 cents) per
share to shareholders recorded in the register on Friday 28 September 2007,
payable on Monday 1 October 2007. The dividend cover for the year is 3,32 times
(June 2006: 2,94 times).
The last day to trade cum dividend will be Thursday 20 September 2007. Shares
will commence trading ex dividend from the commencement of business on Friday 21
September 2007. The record date will be Friday 28 September 2007.
Share certificates may not be dematerialised or rematerialised between Friday 21
and Friday 28 September 2007, both days inclusive.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated financial information has been prepared in accordance
with the recognition and measurement criteria of all applicable statements and
interpretations of International Financial Reporting Standards ("IFRS") and is
presented in terms of the disclosure requirements set out in IAS 34 - Interim
Financial Reporting. The accounting policies applied to the condensed
consolidated financial information are consistent with those applied in the
annual financial statements for the year ended 30 June 2006.
REVIEW OF INDEPENDENT AUDITORS
The group`s auditors Ernst & Young have reviewed the condensed consolidated
financial information for the year ended 30 June 2007. Their unqualified review
report is available for inspection at Transpaco`s registered office.
ON BEHALF OF THE BOARD
AJ Aaron
Non-executive Chairman
PN Abelheim
Chief Executive
L Weinberg
Financial Director
DIRECTORS
AJ Aaron (Chairman)*; PN Abelheim (Chief Executive); L Weinberg (Financial
Director); HA Botha*; JS Botha; SR Bouzaglou; SI Jacobson*; D Thomas*; SP van
der Linde*
*non-executive
Date 30 August 2007
Auditors Ernst & Young Incorporated
Sponsor Investec Bank Limited
Registered Office 331 6th Street, Wynberg, Sandton
Transfer Secretaries Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg
Website www.transpaco.co.za
CONSOLIDATED INCOME STATEMENT
Reviewed Audited
12 months 12 months
R`000 June 2007 June 2006
Continuing operations
Turnover 543 274 341 036
Cost of sales 372 752 222 697
Gross Profit 170 522 118 339
Operating Costs 113 662 79 306
Depreciation 17 220 12 958
Operating profit 39 640 26 075
Net interest paid 8 025 4 508
Profit before taxation 31 615 21 567
Taxation 9 626 4 791
Profit after taxation from continuing 21 989 16 776
operations
Discontinued operations
Loss after tax from discontinued - (1 533)
operations
Profit after taxation 21 989 15 243
Weighted average number of shares in issue 26 332 26 085
(`000)
Diluted weighted average number of shares 31 568 31 168
in issue (`000)
Earnings per share (cents) 83,5 58,4
Continuing operations 83,5 64,3
Discontinued operations - (5.9)
Headline earnings per share (cents) 83.0 58,8
Continuing operations 83.0 62,2
Discontinued operations - (3,5)
Diluted earnings per share (cents) 69.7 48,9
Continuing operations 69.7 53,8
Discontinued operations - (4,9)
Diluted headline earnings per share 69.2 49,2
(cents)
Continuing operations 69.2 52,1
Discontinued operations - (2,9)
Dividend per share (cents)* 25,0 20,0
Reconciliation of headline earnings
(R`000)
Basic earnings 21 989 15 243
Impairment - 564
Termination costs on disposal of business - 69
Profit on disposal of plant and equipment (137) (546)
Headline earnings 21 852 15 330
*Includes interim dividend of 10 cents (June 2006: 8 cents) and a dividend
declared after the period of 15 cents (June 2006: 12 cents).
CONSOLIDATED BALANCE SHEET
Reviewed Audited
12 months 12 months
R`000 June 2007 June 2006
ASSETS
Non-current assets 123 085 89 545
Property, plant and equipment 115 267 83 132
Intangibles 482 482
Goodwill 3 204 3 204
Unlisted investments 2 549 1 672
Deferred taxation 1 583 1 055
Current assets 239 777 139 981
Unlisted Investments - 1 325
Inventories 69 536 36 459
Trade receivables 144 779 73 516
Taxation 5 661 4 893
Cash and cash equivalents 19 801 23 788
Non-current assets classified as held-for- - 252
sale
TOTAL ASSETS 362 862 229 778
EQUITY AND LIABILITIES
Capital and reserves 131 293 113 621
Issued capital 272 261
Preference shareholders interest 9 273 9 273
Non-distributable reserve 1 688 1 688
Distributable reserve 120 060 102 399
Non-current liabilities 62 085 44 489
Preference share liability 4 672 5 381
Interest-bearing borrowings 51 623 34 018
Deferred taxation 5 790 5 090
Current liabilities 169 484 71 571
Trade and other payables 118 433 56 560
Current portion of interest-bearing 19 645 15 011
borrowings
Bank overdraft 31 406 -
Liabilities directly associated with the - 97
assets classified as held-for-sale
TOTAL EQUITY AND LIABILITIES 362 862 229 778
Number of shares in issue (`000)
Number of shares in issue (net of 26 079 31 203
4 410 000 treasury shares)
Net movement on treasury shares 1 080 (2 916)
Shares purchased and cancelled - (2 208)
Ranking number of shares 27 159 26 079
Salient features
Net asset value per share (cents) 449 400
Gearing ratio (%) 67 27
Interest cover (x) 5,3 5,6
Operating margin (%) 7,2 6,7
ABRIDGED CONSOLIDATED CASH FLOW
Reviewed Audited
12 months 12 months
R`000 June 2007 June 2006
Cash flow from operating activities
Cash generated from operations 13 570 35 203
Ordinary dividend paid (5 835) (5 210)
Net interest paid (7 339) (4 219)
Taxation paid (10 222) (3 122)
Net cash flow from operating activities (9 826) 22 652
Cash flow from investing activities
Proceeds on disposal of property, plant 550 7 336
and equipment
Acquisition of property, plant and (49 516) (20 058)
equipment
Decrease/(increase) in unlisted 448 (137)
investments
Net cash flow from investing activities (48 518) (12 859)
Cash flow from financing activities
Net movement on treasury shares 1 518 (32 885)
Decrease in preference share liability (709) (648)
Increase /(decrease) in long-term 17 508 (2 263)
borrowings
Increase in short-term borrowings 4 634 2 336
Net cash flow from financing activities 22 951 (33 460)
Net movement in cash for the year (35 393) (23 667)
Cash and cash equivalents at the beginning 23 788 47 455
of the year
Cash and cash equivalents at the end of (11 605) 23 788
the year
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
12 months 12 months
R`000 June 2007 June 2006
Opening balance 113 621 136 473
Net profit for the year 21 989 15 243
Dividend paid (5 835) (5 210)
Net movement on treasury shares 1 518 (32 885)
Closing balance 131 293 113 621
CAPITAL COMMITMENTS
Reviewed Audited
12 months 12 months
R`000 June 2007 June 2006
Capital expenditure authorised and
contracted
Plant and equipment 31 723 3 512
SEGMENTAL ANALYSIS
Rigids Recycling Flexibles Packaging
R`000
Revenue - 2007 61 762 66 161 242 983 171 919
Revenue - 2006 58 484 35 076 112 036 135 160
Operating profit 1 183 8 974 8 221 19 164
- 2007
Operating profit 2 936 3 960 7 878 9 857
- 2006
SEGMENTAL ANALYSIS (Contd)
Properties and Total Discontinuing Total
R`000 Group Services Operations
Revenue - 2007 449 543 274 - 543 274
Revenue - 2006 280 341 036 14 218 355 254
Operating profit 2 098 39 640 - 39 640
- 2007
Operating profit 1 444 26 075 (2 062) 24 013
- 2006
Date: 30/08/2007 15:18:07 Supplied by www.sharenet.co.za
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