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MPACT LIMITED - Unaudited interim results for the six months ended 30 June 2012 and cash dividend declaration

Release Date: 06/09/2012 08:00
Code(s): MPT     PDF:  
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Unaudited interim results for the six months ended 30 June 2012 and cash dividend declaration

Mpact Limited
(Incorporated in the Republic of South Africa)
(Company registration number: 2004/025229/06)
Income tax number: 9003862175
JSE share code: MPT JSE ISIN: ZAE000156501
("Mpact" or "the Group" or "the Company")

Unaudited interim results
for the six months ended 30 June 2012
and cash dividend declaration

Highlights

 Revenue of R3.2 billion up 11.7% excluding Paperlink

 Underlying operating profit up 8.4% to R222 million excluding Paperlink

 Basic underlying earnings per share increased to 63.7 cents
  (June 2011: 4.3 cents)

 Return on Capital Employed (ROCE) of 14.1%
  (June 2011: 13.4%)

 Gearing down to 36% (June 2011: 96%)

 Interim gross cash dividend declared of 20 cents per share
  (June 2011: nil cents per share)

COMPANY PROFILE
Mpact is a significant Southern African packaging Group in paper and plastics packaging products.
The Paper business is integrated across the recycled paper-based corrugated packaging value chain
and comprises three divisions being recycling, paper manufacturing and corrugated. The Plastics
business manufactures rigid plastic packaging such as bottles, containers and preforms for the fast
moving consumer goods markets; styrene trays and plastic jumbo bins. The Group employs approximately
3,700 people in 30 operations in South Africa, Namibia, Mozambique and Zimbabwe. Mpact has a Level 4
B-BBEE rating as certified by independent ratings agency, Empowerdex.

COMMENTARY
The directors of Mpact are pleased to present a solid set of results reflecting a good performance by
the Group in challenging market conditions in the first six months of the financial period to 30 June 2012.
The results for the period reflect a continuation of the Group's strategy of the modernisation and
optimisation of Mpact's existing operations and a focus on developing new business opportunities. 
Tough market conditions in the Paper business resulted in the business absorbing part of its
increased operating costs. Mpact's revenue growth was achieved through market share gains, particularly
against imports and improved demand from the agricultural sector.

GROUP PERFORMANCE
Revenue of R3,210 million was 11.7% higher than the comparable prior period excluding Paperlink
(6.8% as reported), due to increased sales volumes and higher average selling prices. The Company sold its
paper merchant business, Paperlink at the end of March 2011. Underlying operating profit of R222 million
was 8.4% higher than the comparable prior period, excluding Paperlink (12.4% as reported). Return on
capital employed for the period improved to 14.1% (June 2011: 13.4%). The increase in underlying earnings
per share from 4.3 cents to 63.7 cents is attributable to improved operating profit and lower financing
costs.

Paper business
Revenue was 10.5% higher than the prior period at R2,387 million. Sales volume increased versus the
comparable prior period due to improved agricultural sector demand and market share gains against
imports of packaging papers attributable to the weaker rand. Underlying operating profit of R231 million
was 5.0% higher than the comparable prior period profit due to higher average selling prices which were
partially offset by increased costs.

Plastics business
Revenue of R823 million was 15.2% higher than the comparable prior period, of which approximately 12.2%
is attributable to volume growth and higher average selling prices and 3% to the PET tray business acquired
in February 2012. Volume growth is attributable mainly to improved sales of bulk bins to the agricultural
market and new business in the PET preforms, bottles and closures sector. Underlying operating profit
of R37 million was 64.9% higher than the comparable prior period profit. Good progress was made
on the modernisation and reorganisation projects undertaken over the past 12 months.

Special items
In the six months ended 30 June 2012, special items amounted to R5.4 million in respect of a settlement
charge relating to the defined benefit pension plan (June 2011: R5.4 million related to listing transaction
costs).

Net finance costs
Net finance costs of R64 million were lower than the comparable prior period by 65.5% as a result of the
debt restructuring which took place on 5 July 2011 prior to listing on the JSE on 11 July 2011.

Tax
The effective tax rate of 31.4% (June 2011: 31.9%), was higher than the normal company income tax rate of
28% mainly due to interest not deductible for tax purposes.

Earnings per share
Basic earnings and headline earnings per ordinary share for the six months ended 30 June 2012 were
61.3 cents and 61.2 cents, respectively, compared to 1.0 cent and 0.8 cent per share, respectively, for the
six months ended 30 June 2011. Underlying earnings per share increased from 4.3 cents to 63.7 cents over
the same period.

Net debt
Net debt at 30 June 2012 was R1,382 million, an increase of R75 million from 31 December 2011, due
to year-end working capital timing differences. The Company paid its maiden dividend of R65.6 million on
30 April 2012. Net debt is substantially lower in relation to the comparable prior period due to the capital
restructuring prior to listing.

Cash dividend
The Board has declared an interim gross cash dividend of 20 cents per ordinary share payable on
8 October 2012. In terms of the new Dividends Tax effective from 1 April 2012, the dividend has been
declared from income reserves; the dividend withholding tax rate is 15%. Mpact has no STC credits. Net
local dividend amount is 17 cents per share for shareholders liable to pay Dividends Tax and 20 cents per
share for shareholders exempt from paying Dividends Tax. The number of shares in issue at the date of
declaration is 163,575,656.

The salient dates for the dividend are as follows:
Last day to trade to receive a dividend                                           Friday, 28 September 2012
Shares commence trading "ex" dividend                                                Monday, 1 October 2012
Record date                                                                          Friday, 5 October 2012
Payment date                                                                         Monday, 8 October 2012

Share certificates may not be dematerialised or rematerialised between Monday, 1 October 2012 and
Friday, 5 October 2012, both days inclusive.

OUTLOOK
Although increased demand from the agricultural sector and the displacement of imported packaging
paper is encouraging, the marginal growth in non-agricultural sectors evident in the first half of the year
remains a concern across all product sectors.

Nevertheless Mpact continues to be well positioned within the sectors it operates and will look for
opportunities to entrench itself as South Africa's leading paper and plastics packaging producer.

Change in directorate
Brett Clark was appointed to the Board on 1 June 2012 and to the position of Chief Financial Officer with
effect from 1 July 2012.

On 30 June 2012 Les Leong retired from the Board and as Chief Financial Officer of Mpact. The Board
wishes to thank Les for his invaluable contribution towards the success of Mpact and particularly the
demerger from Mondi and listing on the JSE in 2011.

AJ Phillips                                            BW Strong
Chairman                                               Chief Executive Officer
4 September 2012

Directors:
Independent Non-Executive:
AJ Phillips (Chairman), NP Dongwana, NB Langa-Royds, TDA Ross, AM Thompson

Executive:
BW Strong (Chief Executive Officer), BDV Clark (Chief Financial Officer)

Company secretary:
MN Sepuru

Registered office:
4th Floor, No. 3 Melrose Boulevard, Melrose Arch, 2196
(Postnet Suite #179, Private Bag X1, Melrose Arch, 2076)

Transfer secretaries:
Link Market Services South Africa (Proprietary) Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000, South Africa)

Sponsor:
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196
(PO Box 786273, Sandton, 2146)

Condensed consolidated statement of financial position

                                                          (Unaudited)     (Unaudited)          (Audited)
                                                               As at            As at             As at
                                                        30 June 2012     30 June 2011  31 December 2011
                                                 Note             Rm              Rm                 Rm
ASSETS
Non-current assets                                           3,125.0         3,107.2            3,121.5
Goodwill and other intangible assets                         1,053.2         1,080.5            1,064.8
Property, plant and equipment                                1,956.9         1,921.7            1,935.1
Other non-current financial assets and
 investment in associates                                      104.6            71.0              106.3
Deferred tax assets                                             10.3            34.0               15.3
Current assets                                               2,446.3         2,225.8            2,483.7
Inventories                                                    718.4           730.7              729.3
Trade and other receivables                                  1,436.7         1,270.1            1,332.3
Cash and cash equivalents                                      291.2           225.0              422.1
Total assets                                                 5,571.3         5,333.0            5,605.2
EQUITY AND LIABILITIES
Capital and reserves
Stated capital                                      9        2,334.1           244.3            2,334.1
Other reserves                                                  26.3          (83.0)             (22.5)
Retained earnings/(accumulated loss)                            23.6          (55.6)             (10.5)
Equity attributable to equity holders of Mpact               2,384.0           105.7            2,301.1
Non-controlling interests in subsidiaries                       84.2            77.4              110.9
Total equity                                                 2,468.2           183.1            2,412.0
Non-current liabilities                                      1,292.8         3,919.6            1,308.2
Long-term borrowings                               10        1,124.9         3,777.9            1,151.2
Retirement benefit obligations                                  60.5            69.2               58.9
Deferred taxation liabilities                                   88.3            12.4               61.1
Other non-current liabilities                                   19.1            60.1               37.0
Current liabilities                                          1,810.3         1,230.3            1,885.0
Short-term borrowings                              10          548.3           142.8              577.9
Trade and other payables and provisions                      1,252.3         1,075.1            1,298.0
Current tax liabilities                                          9.7            12.4                9.1
Total equity and liabilities                                 5,571.3         5,333.0            5,605.2

Condensed consolidated statement of comprehensive income

                                                                   (Unaudited)
                                                          Six months ended 30 June 2012
                                                                       Rm
                                                       Before           Special              After
                                                      special             items            special
                                              Note      items          (note 6)              items
Revenue                                          4    3,209.8                             3,209.8
Cost of sales                                       (1,944.8)                           (1,944.8)
Gross margin                                          1,265.0                             1,265.0
Administration and other operating
 expenditure                                        (1,042.7)             (5.4)          (1,048.1)
Operating profit                                 5      222.3             (5.4)              216.9
Profit on disposal of investments                                                              
Share of associates' profit                               2.2                                 2.2
Total profit from operations and associates             224.5             (5.4)              219.1
Net finance costs                                      (63.7)                              (63.7)
Finance costs                                    7     (71.5)                              (71.5)
Investment income                                         7.8                                 7.8
Profit/(loss) before tax                                160.8             (5.4)              155.4
Tax (charge)/credit                                    (50.3)               1.5             (48.8)
Profit/(loss) for the period from
 continuing operations                                  110.5             (3.9)              106.6
Other comprehensive income/(loss),
 net of taxation                                                                               0.3
Effect of cash flow hedges                                                                       
Actuarial (losses)/gains and surplus
 restrictions on post-retirement
 benefit schemes                                                                                 
Exchange differences on translation
 of foreign operations                                                                         0.3
Cash flow hedge reserve recycled
 through profit and loss                                                                         
Taxation on other comprehensive income                                                           
Total comprehensive income                                                                   106.9
Profit attributable to:
Equity holders of Mpact                                                                      100.6
Non-controlling interests in subsidiaries                                                      6.0
Profit for the period                                                                        106.6
Comprehensive income attributable to:
Equity holders of Mpact                                                                      100.9
Non-controlling interests in subsidiaries                                                      6.0
Total comprehensive income                                                                   106.9
Earnings per share (EPS) attributable
 to equity holders of Mpact                      8
Basic EPS (cents)                                                                             61.3
Diluted EPS (cents)                                                                           61.3

              (Unaudited)                                      (Audited)
     Six months ended 30 June 2011                    Year ended 31 December 2011
                  Rm                                              Rm
  Before           Special              After      Before            Special            After
 special             items            special     special              items          special
   items           (note 6)             items       items            (note 6)           items
 3,006.3                             3,006.3     6,281.0                            6,281.0
(1,829.9)                           (1,829.9)   (3,775.5)                          (3,775.5)
 1,176.4                             1,176.4     2,505.5                            2,505.5
  (978.7)             (5.4)            (984.1)   (1,989.0)             (53.1)        (2,042.1)
   197.7              (5.4)             192.3       516.5              (53.1)           463.4
                                                                     0.3              0.3
     1.6                                 1.6         2.3                                2.3
   199.3              (5.4)             193.9       518.8              (52.8)           466.0
  (184.8)                             (184.8)     (256.3)             (34.3)          (290.6)
  (200.7)                             (200.7)     (284.7)             (34.3)          (319.0)
    15.9                                15.9        28.4                               28.4
    14.5              (5.4)               9.1       262.5              (87.1)           175.4
    (2.9)                               (2.9)      (76.1)               8.4            (67.7)
    11.6              (5.4)               6.2       186.4              (78.7)           107.7

                                         (1.3)                                           41.6
                                          3.7                                             4.1


                                         (5.8)                                           28.4

                                          0.2                                             1.6

                                                                                        23.1
                                          0.6                                           (15.6)

                                          4.9                                           149.3

                                          1.7                                            90.1
                                          4.5                                            17.6
                                          6.2                                           107.7

                                          0.4                                           131.4
                                          4.5                                            17.9
                                          4.9                                           149.3



                                          1.0                                            54.9
                                          1.0                                            54.9

Condensed consolidated statement of changes in equity

                                                                                               Share-based           Cash flow
                                                                                Stated            payments               hedge
                                                                               capital            reserves            reserves
                                                                                    Rm                  Rm                  Rm
Balance 1 January 2011 (audited)                                                 244.3                12.1              (19.6)
Total comprehensive income                                                                                               2.7
Issue of shares under employee share scheme                                                         (0.6)                   
Share scheme charges for the period                                                                   3.8                   
Dividends paid to non-controlling shareholders                                                                             
Reclassification                                                                                    (0.4)                   
Contribution paid to Mondi share incentive scheme                                                   (6.4)                   
Balance at 30 June 2011 (unaudited)                                              244.3                 8.5              (16.9)
Total comprehensive income                                                                                              16.9
Issue of shares                                                                2,089.8                                      
Demerger arrangements                                                                              (15.5)                   
Share scheme charges for the period                                                                   8.5                   
Dividends paid to non-controlling shareholders                                                                             
Reclassification                                                                                      0.3                   
Change in foreign subsidiary functional currency                                                                           
Increase in shareholding of subsidiary                                                                                     
Increase in non-controlling interest in a subsidiary                                                                       
Balance at 31 December 2011 (audited)                                          2,334.1                 1.8                   
Dividends paid                                                                                                             
Total comprehensive income                                                                                                 
Decrease in non-controlling interest and put option exercised                                                              
Share scheme charges for the period                                                                   2.7                   
Dividends paid to non-controlling shareholders                                                                             
Balance at 30 June 2012 (unaudited)                                            2,334.1                 4.5                   

      Post-                   Retained                Total
 retirement                    earnings/    attributable to          Non-
   benefits       Other     (accumulated     equity holders   controlling      Total
   reserves    reserves^            loss)          of Mpact     interests     equity
         Rm          Rm               Rm                 Rm            Rm         Rm
      (3.3)      (67.3)           (58.3)              107.9          73.2      181.1
      (4.2)         0.2              1.7                0.4           4.5        4.9
                                   0.6                                         
                                                     3.8                     3.8
                                                                (0.3)      (0.3)
                                   0.4                                         
                                                   (6.4)                   (6.4)
      (7.5)      (67.1)           (55.6)              105.7          77.4      183.1
       24.6         1.1             88.4              131.0          13.4      144.4
                                                 2,089.8                 2,089.8
                                (15.9)             (31.4)                  (31.4)
                                                     8.5                     8.5
                                                                (1.2)      (1.2)
                                 (0.3)                                         
                  24.6           (25.9)              (1.3)                   (1.3)
                                 (1.2)              (1.2)         (2.4)      (3.6)
                                                                 23.7       23.7
       17.1      (41.4)           (10.5)            2,301.1         110.9    2,412.0
                                (65.6)             (65.6)                  (65.6)
                   0.3            100.6              100.9           6.0      106.9
                  45.8            (0.9)               44.9        (29.7)       15.2
                                                     2.7                     2.7
                                                                (3.0)      (3.0)
       17.1         4.7             23.6            2,384.0          84.2    2,468.2

^ Other reserves consist of the option to equity holder reserves, revaluation reserves and foreign currency translation reserves.

Condensed consolidated statement of cash flows
                                                           (Unaudited)   (Unaudited)       (Audited)
                                                           Six months    Six months            Year
                                                                ended         ended           ended
                                                              30 June       30 June     31 December
                                                                 2012          2011            2011
                                                                   Rm            Rm              Rm
Operating cash flows before movements in working capital        386.8         342.4           765.0
Net (increase)/decrease in working capital                    (161.8)       (109.4)            48.1
Cash generated from operations                                  225.0         233.0           813.1
Taxation paid                                                  (16.0)         (5.5)          (23.6)
Dividends received from associates                                1.4             -               - 
Net cash inflows from operating activities                      210.4         227.5           789.5
Investment in property, plant and equipment                   (165.7)       (167.0)         (337.4)
Other investing activities                                      (1.2)          90.5            82.2
Net cash outflows from investing activities                   (166.9)        (76.5)         (255.2)
Issue of shares                                                                  -         2,089.8
Net (repayment of)/proceeds from borrowings                    (34.8)         184.9       (2,021.8)
Interest paid                                                  (43.1)       (189.5)         (269.8)
Dividends paid to external shareholders                        (65.6)             -               -
Other financing activities                                     (25.4)        (17.2)          (21.4)
Net cash outflows from financing activities                   (168.9)        (21.8)         (223.2)
Net (decrease)/increase in cash and cash equivalents          (125.4)         129.2           311.1
Cash and cash equivalents at beginning of the period^           406.9          95.8            95.8
Cash and cash equivalents at end of the period^                 281.5         225.0           406.9

^ Cash and cash equivalents net of overdrafts.

Notes
1.  Basis of preparation
    The condensed financial information has been prepared in accordance with the framework concepts and the
    measurement and recognition requirements of International Financial Reporting Standards ("IFRS") of the International
    Accounting Standards Board, the AC 500 standards as issued by the Accounting Practices Board, and is in compliance
    with IAS 34: Interim Financial Reporting, and the requirements of the Companies Act of South Africa. The report has
    been prepared using accounting policies that comply with IFRS which are consistent with those applied in the financial
    statements for the year ended 31 December 2011. The preparation of the Group's consolidated results for the half-year
    ended 30 June 2012 was supervised by the Chief Financial Officer, BDV Clark, CA(SA). These results are unaudited.

2.   Accounting policies
     The accounting policies and methods of computation used are consistent with those applied in the preparation of
     the annual financial statements for the year ended 31 December 2011, except for the change in internal cost
     allocations referred to in note 4 below.

     The following revised accounting standard, which had no significant impact on the Group, was adopted in the current
     period:
      IAS 12: Income Taxes.

3.   Seasonality
     Seasonal effects in the Group's markets have historically resulted in higher turnover and operating profits for the
     second half, when compared to the first half.

                                                        (Unaudited)    (Unaudited)          (Audited)   
                                                        Six months     Six months               Year   
                                                             ended          ended              ended   
                                                      30 June 2012   30 June 2011   31 December 2011   
                                                                Rm             Rm                 Rm   
4.   Group segment analysis                                                                       
     Revenue                                                                                           
     Paper                                                 2,394.4        2,169.4            4,591.2   
     Plastics                                                823.0          714.5            1,577.0   
     Corporate and other business(1)                                       131.8              131.8   
                                                           3,217.4        3,015.7            6,300.0   
     Less: Inter-segment revenue                             (7.6)          (9.4)             (19.0)   
     Total revenue                                         3,209.8        3,006.3            6,281.0   
     Operating profit(2)                                                                                 
     Paper                                                   230.8          244.6              560.3   
     Plastics                                                 37.1           29.5              113.9   
     Corporate and other business(1)                        (45.6)         (76.4)            (157.7)   
     Segment total                                           222.3          197.7              516.5
     Special items (note 6)                                  (5.4)          (5.4)             (87.1)   
     Share of associates profit                                2.2            1.6                2.3   
     Net finance cost (excluding special financing)         (63.7)        (184.8)            (256.3)   
     Profit before tax                                       155.4            9.1              175.4   
     Assets
     Paper                                                 2,797.7        2,712.7            2,743.6   
     Plastics                                              1,168.1        1,078.1            1,120.9   
     Corporate and other business(3)                       1,605.5        1,542.2            1,740.7   
     Total assets                                          5,571.3        5,333.0            5,605.2   

1   includes Paperlink, the paper merchant business sold at the end of March 2011.
2   in the current period the internal cost re-allocation basis between the Paper and Plastics businesses and the Corporate
    office was changed to provide a more meaningful representation of each segment's performance. Had this change
    been effected in the prior year, the operating profit for the Paper business would have been R219.8 million for the period
    ended 30 June 2011 (31 December 2011: R510.7 million), and operating profit for the Plastics business would have been
    R22.5 million for the period ended 30 June 2011 (31 December 2011: R100.0 million). Corporate cost for the same period
    would have decreased as a result of the re-allocation.
3   includes goodwill and other intangible assets.
                                                                         (Unaudited)            (Unaudited)              (Audited)
                                                                         Six months             Six months                   Year
                                                                              ended                  ended                  ended
                                                                       30 June 2012           30 June 2011       31 December 2011
                                                                                 Rm                     Rm                     Rm
5.   Operating profit
     Included in operating profit are:
     Amortisation of intangible assets                                         11.6                   12.0                   24.1
     Depreciation                                                             151.5                  145.9                  299.3

6.   Special items
     Listing transaction costs                                                                        5.4                   46.3
     Special finance costs                                                                                                 34.3
     Demerger arrangements                                                                                                  6.8
     Profit on disposal of part investment in associate                                                                   (0.3)
     Defined benefit pension plan settlement charge                             5.4                                            
                                                                                5.4                    5.4                   87.1
7.   Finance costs
     Bank and other borrowings                                                 68.8                  191.1                  266.0
     Defined benefit arrangements                                               2.7                    9.6                   18.7
     Special finance costs                                                                                                  34.3
                                                                               71.5                  200.7                  319.0

8.   Earnings per share                                                       Cents                  Cents                  Cents
         Earnings per share (EPS)
         Basic EPS                                                             61.3                    1.0                   54.9
         Diluted EPS                                                           61.3                    1.0                   54.9
         Underlying earnings per share(1) 
         Basic underlying EPS                                                  63.7                    4.3                  102.9
         Diluted underlying EPS                                                63.6                    4.3                  102.8
         Headline earnings per share(2)
         Basic headline EPS                                                    61.2                    0.8                   54.3
         Diluted headline EPS                                                  61.1                    0.8                   54.2
     
1   Underlying EPS excludes the impact of special items.
2   The presentation of headline EPS is mandated under the JSE Listings Requirements. Headline earnings has been
    calculated in accordance with Circular 3/2009, 'Headline Earnings', as issued by The South African Institute of Chartered
    Accountants.

The calculation of headline earnings, based on basic earnings is as follows:

                                                                (Unaudited)          (Unaudited)             (Audited)
                                                                 Six months           Six months                  Year
                                                                      ended                ended                 ended
                                                               30 June 2012         30 June 2011      31 December 2011
                                                                         Rm                   Rm                    Rm
Profit for the period attributable to
 equity holders of Mpact                                              100.6                  1.7                  90.1
Special items (see note 6)                                              5.4                  5.4                  87.1
Related tax                                                           (1.5)                                     (8.4)
Underlying earnings for the period                                    104.5                  7.1                 168.8
Special items to be included in headline earnings                     (5.4)                (5.4)                (87.4)
(Profit) on disposal of tangible and intangible assets                (0.4)                (0.5)                 (1.1)
Related tax                                                             1.7                  0.1                   8.7
Headline earnings for the period                                      100.4                  1.3                  89.0

                                                                  Number of            Number of             Number of
                                                                     shares               shares                shares
Basic number of shares outstanding(1)                           164,046,476          164,046,476           164,046,476
Effect of dilutive potential ordinary shares                        173,484                                   173,484
Diluted number of ordinary shares outstanding(2)                164,219,960          164,046,476           164,219,960

1   As at 30 June 2011 and 31 December 2011 the number of shares used in the calculation of earnings per share was
    164,046,476 ordinary shares, which represented the aggregate number of shares listed on 11 July 2011.
2   Diluted EPS is calculated by adjusting the weighted average number of ordinary shares in issue, on the assumption of
    conversion of all potentially dilutive ordinary shares.

                                                                     (Unaudited)           (Unaudited)              (Audited)
                                                                     Six months            Six months                   Year
                                                                          ended                 ended                  ended
                                                                   30 June 2012          30 June 2011       31 December 2011
                                                                             Rm                    Rm                     Rm
9.   Stated capital
     Ordinary
     Balance at beginning of the period
     (1 January 2011: 159,950 shares of R0.001 each)
     (1 January 2012: 164,046,476 shares of no par value)                2,334.1                                          
     Conversion to shares of no par value                                                      244.3                  244.3
     Issue of share capital of no par value                                                                        2,089.8

     Balance at end of period
     (30 June 2012 and 31 December 2011: 164,046,476
      shares with no par value)                                          2,334.1                                    2,334.1
     (30 June 2011: 23,192,750 shares of no par value)                                         244.3                      
     Share premium                                                                                                       
     Balance at beginning of the period                                                        244.3                  244.3
     Conversion to shares of no par value                                                    (244.3)                (244.3)

     Total issued stated capital                                         2,334.1                244.3                2,334.1

10. Borrowings
     Bank borrowings                                                    1,100.0              1,014.7                1,100.0
     Shareholder loans                                                      9.8              2,740.8                   32.0
     Finance lease liability                                               15.1                 22.4                   19.2
     Long-term borrowings                                                1,124.9              3,777.9                1,151.2
     Short-term borrowings and short-term portion
      of long-term borrowings                                              548.3                142.8                  577.9
     Total borrowings                                                    1,673.2              3,920.7                1,729.1

The Company's borrowing powers are not restricted. In the current year Mpact restructured its funding facilities by
sub-dividing its current banking facility into smaller facilities. There have been no changes to the overall terms of the
banking facilities.

11. Businesses combination
    On 1 February 2012 the Group acquired a PET tray business as a going concern for R8 million.

12. Retirement benefit
    In November 2011 the trustees of the defined benefit pension plan in South Africa, with agreement from the
    participating pensioners and employees, resolved to wind up the fund subject to regulatory approval, which was
    obtained in January 2012. Mpact Limited will receive a cash reimbursement of the pension surplus. An amount of
    R21.3 million relating to the surplus is reflected under non-current assets and a settlement charge of R5.4 million is
    recognised as a special item in the statement of comprehensive income.

                                         (Unaudited)   (Unaudited)     (Audited)   
                                         Six months    Six months          Year   
                                              ended         ended         ended   
                                            30 June       30 June   31 December   
                                               2012          2011          2011   
                                                 Rm            Rm            Rm   
13. Capital commitments                                                       
      Contracted capital commitments         102.5          63.1          51.5   
      Approved capital commitments            66.5          79.7          20.9   
    Capital commitments                       169.0         142.8          72.4   

These commitments will be met from existing cash resources and borrowing facilities available to the Group.

                                                         (Unaudited)   (Unaudited)     (Audited)   
                                                         Six months    Six months          Year   
                                                              ended         ended         ended   
                                                            30 June       30 June   31 December   
                                                               2012          2011          2011   
                                                                 Rm            Rm            Rm   
14. Contingent liabilities                                     26.5          13.0           8.6   

15. Net asset value per share                                                                     
    Asset value per share is disclosed in accordance with                                             
    the JSE Listings Requirements. Net asset value per                                                
    share is defined as net assets divided by the number                                              
    of ordinary shares in issue as at the period-end.                                                 
    Net asset value per share (cents)                       1,504.6         111.6       1,470.3   

16. Related parties
    Transactions between the Company and its respective subsidiaries, which are related parties, have been eliminated on
    consolidation.

    The Group and its subsidiaries, in the ordinary course of business, enter into various sales, purchases and service
    transactions with associates and others in which the Group has a material interest. These transactions are under terms
    that are no less favourable than those arranged with third parties. These transactions in total are not significant.
    There have been no significant changes to the related parties in this interim reporting period.

17. Post-balance sheet events
    The following post-balance sheet events occurred, that have no impact on the Group's reported financial position
    as at 30 June 2012:

     On 13 July 2012 Mpact completed the repurchase of 470,820 shares from its shareholders as a result of an odd-lot
      offer and specific offer.
     In July 2012 Mpact entered into a four-year interest rate swap to hedge R400 million of its floating rate debt at a fixed
      rate of 7.58%.

Disclaimer
This document including, without limitation, those statements concerning the demand
outlook, expansion projects and its capital resources and expenditure, may be considered to
be forward-looking statements. By their nature, forward-looking statements involve risk and
uncertainty and although Mpact believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such expectations
will prove to have been correct. Accordingly, results could differ materially from those
set out in the forward-looking statements as a result of, among other factors, changes in
economic and market conditions, success of business and operating initiatives, changes in
the regulatory environment and other government action and business and operational
risk management. While Mpact has taken reasonable care to ensure the accuracy of the
information presented, Mpact accepts no responsibility for any consequential, indirect,
special or incidental damages, whether foreseeable or unforeseeable, based on claims
arising out of misrepresentation or negligence arising in connection with a forward-looking
statement. This document is not intended to contain any profit forecasts or profit estimates.

Mpact Limited
(Incorporated in the Republic of South Africa)
(Company registration number: 2004/025229/06)
Income tax number: 9003862175
JSE share code: MPT JSE ISIN: ZAE000156501
("Mpact" or "the Group" or "the Company")

www.mpact.co.za
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