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TRANSPACO LIMITED - Reviewed condensed consolidated results for the year ended 30 June 2012 and dividend declaration

Release Date: 22/08/2012 07:05
Code(s): TPC     PDF:  
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Transpaco Limited
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC


REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2012 AND DIVIDEND ANNOUNCEMENT GROUP TURNOVER UP 11% GROUP HEADLINE EARNINGS UP 3% FINAL DIVIDEND PER SHARE 49 CENTS INTRODUCTION
The board is pleased to report on the year ended 30 June 2012 (the year) in which Transpaco maintained growth and delivered a pleasing performance, despite trading conditions proving more challenging than expected.
A number of factors combined to create a difficult environment. The economy remained sluggish constraining overall growth. In addition margins were pressured by spiraling energy costs, intensified competition from local and international manufacturers and aggressive local raw material prices requiring the group to develop alternative sources of supply. Further, an industry-wide strike during July and August 2011 adversely affected the market well into the second half of the year.
Nonetheless Transpaco achieved turnover in excess of the R1 billion mark for the first time, attributable in the main to the groups proactive marketing and sales performance.
Transpacos solid performance was strengthened by controlled operating efficiencies and stringent management of operating expenses, supported by a reduction in net interest paid. FINANCIAL RESULTS
The group increased headline earnings by 3,1% to R65,3 million (June 2011: R63,3 million).
Headline earnings per share (HEPS) decreased by 3,9,% to 205,6 cents (June 2011: 214,0 cents) and earnings per share (EPS) by 3,3% to 209,4 cents (June 2011: 216,5 cents).
Diluted HEPS increased 2,8 % to 201,1 cents (June 2011:195,7 cents).
In comparing results year-on-year, cognisance must be taken of the 3 312 126 additional shares issued during February 2011 as a result of Transpacos BEE shareholder converting its cumulative voting preference shares into ordinary shares. The weighted average number of shares in issue taken into account when calculating HEPS and EPS is 31 781 552 (June 2011: 29 605 600).
In the absence of the additional shares in issue, HEPS would have increased by 3,1% to 221,7 cents and EPS by 3,9% to 224,8 cents compared to the previous year.
Total operating profit grew slightly to R95,8 million (June 2011: R95,2 million) on turnover of R1 058,0 million (June 2011: R954,0 million). Operating profit in the Paper division increased.
Market conditions in the Plastic division lead to margin squeeze, resulting in a decline in operating profits for that division.
In addition the R24 million investments in new plant and equipment and the associated costs at Specialised Films resulted in its contribution to the Plastic divisions operating profits to decline, as anticipated. The impact is short-term and Specialised Films is expected to benefit positively from this investment in the future.
The groups level of working capital remains well-managed. During the year this was impacted by the need to replace uncompetitive local raw material suppliers with international counterparts. Importing raw material carried extended lead times which resulted in a need to increase inventory.
Cash generated from operations amounted to R101,8 million (June 2010: R129,1 million). Transpacos net interest-bearing debt-to-equity position remains cash positive and interest cover improved to 67,8 times (June 2011: 33,3 times).
Net asset value per share increased by 15,7% to 1002 cents (June 2011:866 cents). PROSPECTS
The group will continue its proven business strategy, targeting growth and maintaining strict financial management while identifying and pursuing appropriate acquisitions. TRANSFORMATION
An independent accredited verification agency has assessed Transpaco as a Level 5 B-BBEE contributor. Improving this rating is a strategic and operational imperative for sustainability, and to this end Transpaco continues to promote comprehensive transformation strategies throughout the group at all levels. DIVIDEND
The board has declared a final gross cash dividend out of income reserves of 49 cents per share. This resulted in total dividends of 80 cents per share for the year (June 2011:72 cents per share), an increase of 11,1%. Transpaco has no STC credits. After applying the dividend withholding tax of 15% a net final dividend of 41,65000 cents per share will be paid to those shareholders who are not exempt from the dividends tax. The issued shares at the date of declaration is 33 177 372 ordinary shares. The salient dates for the dividend are as follows:
Last date to trade shares cum dividend: Friday, 14 September 2012
Shares trade ex dividend: Monday, 17 September 2012 Record date: Friday, 21 September 2012 Payment date: Tuesday, 25 September 2012
Share certificates may not be dematerialised or rematerialised between Monday, 17 September 2012 and Friday, 21 September 2012, both days inclusive. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The reviewed condensed consolidated annual financial results have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), its interpretations adopted by the International Standards Board (IASB), the presentation and disclosure requirements set out in IAS 34 Interim Financial Reporting and comply with the Listings Requirements of the JSE Limited and the South African Companies Act No 71 of 2008. The accounting policies are consistent in all material respects with those applied in the preparation of the groups annual financial statements for the year ended 30 June 2011. Transpaco has adopted all applicable new and amended standards, the effect of which had no material impact on the reviewed condensed consolidated annual financial results. REVIEW OF INDEPENDENT AUDITORS
The groups auditors Ernst & Young Inc. have reviewed the condensed consolidated financial information for the year. Their review report is available for inspection at Transpacos registered office. APPROVAL AND PREPARATION
These condensed consolidated annual financial results have been prepared under the direction and supervision of the Financial Director, L Weinberg CA(SA). 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*; SR Bouzaglou; SI Jacobson*; D Thomas*; SP van der Linde* * non-executive Date: 22 August 2012 Auditors: Ernst & Young Incorporated
Transpaco Limited: Registration number: 1951/000799/06 Share code: TPC ISIN: ZAE000008480 Income tax number: 9975/112/71/6 Company Secretary: HJ van Niekerk Sponsor: Investec Bank Limited Registered Office: 331 6th Street Wynberg Sandton
Transfer Secretaries: Computershare Investor Services (Pty) Ltd 70 Marshall Street Johannesburg Website: www.transpaco.co.za NOTES
1) During August 2011 the board of directors took a decision to dispose of the plant and machinery of the PET and PVC divisions and close those operations. The disposals of both these operations have been completed.
2) The sale of the property that housed the PVC division was sold during the year. Transfer of this property is expected shortly. STATEMENT OF COMPREHENSIVE INCOME Reviewed Audited 12 months % 12 months R000 Note Jun-12 Change Jun-11 CONTINUING OPERATIONS Revenue 1 047 021 907 909 Turnover 1 044 221 15.2 906 058 Cost of sales (660 088) (549 436) Profit before operating costs and depreciation 384 133 7.7 356 622 Operating costs (256 077) (225 206) Depreciation (27 486) (24 006) Operating profit 100 570 (6.3) 107 410 Finance income 2 800 1 851 Finance costs (4 032) (4 677) Profit before taxation 99 338 (5) 104 584 Taxation (29 019) (31 683) Profit for the year from continuing operations 70 319 (3.5) 72 901 DISCONTINUED OPERATIONS Loss for the year from discontinued operations 1 (3 756) (8 812) Profit for the year 66 563 64 089 Other comprehensive income Total comprehensive income 66 563 3.9 64 089 Weighted average number of shares in issue (000) 31 782 29 606 Diluted weighted average number of shares in issue (000)32 485 32 398 Continuing operations Earnings per share (cents) 221.3 (10.1) 246.1 Diluted earnings per share (cents) 216.5 (3.8) 225 Headline earnings per share (cents) 218.7 (10.3) 243.7 Diluted headline earnings per share (cents) 214 (3.9) 222.7 Continuing and discontinued operations Earnings per share (cents) 209.4 (3.3) 216.5 Fully diluted earnings per share (cents) 204.9 3.5 198 Headline earnings per share (cents) 205.6 (3.9) 214 Fully diluted headline earnings per share (cents) 201.1 2.8 195.7 Dividend per share (cents)* 80 11.1 72
*Includes interim dividend of 31 cents (June 2011: 29 cents) and a dividend declared after the period of 49 cents (June 2011: 43 cents) Reconciliation of headline earnings (R000) Continuing operations Basic earnings 70 319 72 901 Negative goodwill (191) Profit on disposal of property, plant and equipment (797) (551) 69 522 (3.7) 72 159 Continuing and discontinued operations Basic earnings 66 563 64 089 Negative goodwill (191) Profit on disposal of property, plant and equipment (1 230) (551) Headline earnings 65 333 3.1 63 347 STATEMENT OF CASH FLOWS Reviewed Audited 12 months 12 months R000 Jun-12 Jun-11 Cash flow from operating activities Cash generated from operations 101 877 129 070 Dividends paid (23 452) (19 906) Finance costs from continuing operations (4 032) (4 677) Finance costs from discontinued operations (452) (34) Finance income from continuing operations 2 800 1 851 Finance income from discontinued operations 271 Taxation paid (26 784) (15 288) Net cash inflow from operating activities 50 228 91 016 Cash flow from investing activities Proceeds on disposal of property, plant and equipment 13 341 1 543 Expansion and replacement of property, plant and equipment (67 007) (31 979) Decrease in unlisted investments 33 Increase in long-term receivables (2 951) Increase in short-term receivables (2 110) Acquisition of business (43 107) Net cash outflow from investing activities (58 694) (73 543) Cash flow from financing activities Movement in treasury shares 1 698 790 Decrease in preference share liability (343) Decrease in long-term borrowings (926) (11 479) Decrease in short-term borrowings (2 247) (2 668) Net cash (outflow) from financing activities (1 475) (13 700) Net movement in cash for the year (9 941) 3 773 Cash and cash equivalents at the beginning of the year 80 493 76 720 Cash and cash equivalents at the end of the year 70 552 80 493 SEGMENTAL ANALYSIS Paper Properties Total Dis-
Plastic and Board and Group Continuing continued Total
R000 Products Products Services Operations Operations Group
Turnover - 2012 644 389 399 832 1 044 221 9 976 1 054 197
Turnover to customers 685 076 417 509 1 102 585 11 320 1 113 905 Less turnover to internal
customers 40 687 17 677 58 364 1 344 59 708
Turnover 2011 578 393 327 665 906 058 47 931 953 989
Turnover to customers 618 491 342 830 961 321 47 931 1 009 252 Less turnover to internal customers 40 098 15 165 55 263 55 263
Operating profit/(loss) 2012 54 981 44 227 1 362 100 570 (4 858) 95 712 Operating profit/(loss) 2011 64 649 41 531 1 230 107 410 (12 200) 95 210 Capital expenditure 2012 57 255 9 374 378 67 007 67 007
Capital expenditure 2011 24 388 15 099 265 39 752 39 752
Assets 2012 336 742 141 248 87 062 565 052 565 052
Assets 2011 277 583 154 368 55 726 487 677 487 677
Liabilities 2012 153 049 72 051 19 429 244 529 244 529
Liabilities 2011 130 405 62 639 20 153 213 197 213 197 STATEMENT OF FINANCIAL POSITION Reviewed Audited 12 months 12 months R000 Note Jun-12 Jun-11 ASSETS Non-current assets 195 482 167 862 Property, plant and equipment 185 659 159 231 Intangibles 482 482 Goodwill 3 204 3 204 Unlisted investmnets 33 Long-term receivables 2 951 Deferred taxation 3 186 4 912 Current assets 368 685 319 815 Inventories 123 521 89 422 Trade and other receivables 169 942 148 729 Short-term receivables 2 110 Taxation receivable 2 560 1 171 Cash at bank and in hand 70 552 80 493 Non-current asset classified as held-for-sale 2 885 TOTAL ASSETS 565 052 487 677 EQUITY AND LIABILITIES Capital and reserves 320 523 274 480 Issued share capital 320 317 Share premium 11 019 11 019 Other reserve 2 438 1 204 Distributable reserve 306 746 261 940 Non-current liabilities 46 694 43 766 Interest-bearing borrowings 24 968 25 894 Deferred taxation 21 726 17 872 Current liabilities 197 835 169 431 Trade payables and accruals 162 951 128 805 Provisions 16 186 16 443
Current portion of interest-bearing borrowings 18 191 20 438 Taxation payable 507 3 745 TOTAL EQUITY AND LIABILITIES 565 052 487 677 Number of shares in issue (000)
Number of shares (Net of treasury shares) 31 691 28 192 Shares issued 3 312 Movement in treasury shares 300 187 Ranking number of shares 31 991 31 691 Salient features Net asset value per share (cents) 1 002 866 Operating margin % 9.1 10
Net interest-bearing debt : equity ratio % Net cash positiveNet cash positive Interest cover (X) 67.8 33.3 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Preference Share Distri Share Share holder's Other bution
R'000 Capital Premium Interest Reserves Reserve Total
Balance at 30 June 2010 282 9 273 469 216 969 226 993
Profit for the year 64 089 64 089 Other comprehensive income
Total comprehensive income 282 9 273 469 281 058 291 082 Share-based payments 735 735 Dividend paid (19 906) (19 906)
Shares issued 33 11 019 (9 273) 1 779
Movement in treasury shares 2 788 790
Balance at 30 June 2011 317 11 019 1 204 261 940 274 480 Profit for the year 66 563 66 563 Other comprehensive income
Total comprehensive income 317 11 019 1 204 328 503 341 043 Share-based payments 1 234 1 234 Dividend paid (23 452) (23 452)
Movement in treasury shares 3 1 695 1 698
Balance at 30 June 2012 320 11 019 2 438 306 746 320 523 DISCONTINUED OPERATIONS Reviewed Audited 12 months 12 months R000 Jun-12 Jun-11 Turnover 9 976 47 931 Expenses (14 834) (60 131) Operating loss (4 858) (12 200) Finance income 271 Finance costs (452) (34) Loss before tax from discontinued operations (5 039) (12 234) Taxation 1 283 3 422 Loss for the year from discontinued operations (3 756) (8 812) Loss per share (cents) from discontinued operations (11.8) (29.8) Diluted loss per share (cents) from discontinued operations (11.6) (27.2) Headline loss per share (cents) from discontinued operations (13.2) (29.8) Diluted headline loss per share (cents) from discontinued operations (12.9) (27.2) Cash flows from discontinued operations Net cash flows from operating activities (7 193) 1 794 Net cash flows from investing activities 5 305 (775) Net cash flows from financing activities (201) Net cash flows (1 888) 818 CAPITAL COMMITMENTS Reviewed Reviewed 12 months 12 months R000 Jun-12 Jun-11 Capital expenditure authorised and contracted Plant and equipment 12 821 24 178
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