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Audited results for the year ended 31 December 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: ZAE 000156501
("Mpact" or "the Group" or "the Company")
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012 AND CASH DIVIDEND DECLARATION
HIGHLIGHTS
- Revenue of R6.8 billion up 10.9% excluding Paperlink
- Underlying operating profit up 11.6% to R585 million excluding Paperlink
- Basic underlying earnings per share increased to 191.1 cents (December 2011: 102.9 cents)
- Return on Capital Employed (ROCE) of 16.0% (December 2011: 13.8%)
- Gearing down to 29% (December 2011: 35%)
- Total gross cash dividends for the year of 70 cents per share (December 2011: 40 cents per share)
COMPANY PROFILE
Mpact is a leading producer of paper and plastics packaging in Southern Africa. 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 and PET trays and plastic jumbo bins. The Group employs approximately 3,790
people in 31 operations in South Africa, Namibia, Mozambique and Zimbabwe. Mpact has a
Level 4 B-BBEE rating as certified by independent ratings agency, Empowerdex.
COMMENTARY
2012 marks the first full financial year for Mpact since its listing on the JSE Limited (JSE) in July 2011.
Whilst there were early indications in 2012 of an economic recovery, albeit modest, the South African economy showed
subdued real GDP growth, rising raw material input and administered prices, high levels of unemployment, strikes across
many sectors, above inflationary wage increases and a weak Rand.
Despite these challenges the Group delivered a commendable set of results, underpinned by a sound strategy and effective
execution.
GROUP PERFORMANCE
Revenue of R 6,821 million was 10.9% higher than the comparable prior period excluding Paperlink (8.6% as reported),
driven primarily by increased sales volumes across both businesses. Volumes in continuing businesses were up 7.8% versus
prior year. The Company sold its paper merchant business, Paperlink, at the end of March 2011. Underlying operating profit
of R585 million was 11.6% higher than the comparable prior period, excluding Paperlink (13.2% as reported), achieved
through improved productivity and stringent cost control. ROCE for the year improved to 16.0% (2011: 13.8%) which is
above Mpact's through-the-cycle target of 15%. The increase in underlying earnings per share from 102.9 cents to 191.1
cents is due to the improved trading performance as well as lower finance costs as a result of net debt having been
substantially reduced as part of the capital restructuring prior to listing in July 2011. Net debt reduced to R1,056 million
(2011: R1,307 million) and gearing was down to 29% from 35% at the end of the prior year.
Paper business
Revenue in the Paper business was 10.3% higher than the prior period at R5,042 million due primarily to good volume
growth in export fruit packaging and the displacement of imported paper. Underlying operating profit of R562 million
was 10.1% higher than the prior period profit due to improved throughput and stringent cost control. The operating
profit margin of 11.2% is in line with the comparable prior period.
Plastics business
In the Plastics business revenue of R1,778 million was 12.8% higher than the comparable prior period, of which
approximately three percentage points is attributable to the PET tray business acquired in February 2012 and the
balance to volume growth and higher average selling prices in the existing businesses. Good volume growth was
underpinned by improved sales of bulk bins to the agricultural market. Underlying operating profit of R117 million was
16.7% higher than the prior period profit. The relocation of the closures plant to Wadeville was successfully completed
during the period and the integration of the PET tray business has progressed well.
Agreements for the supply of preforms and closures to Amalgamated Beverage Industries (ABI) until December 2017 and
June 2017 respectively, have been signed. While the terms are less favourable to Mpact in the short term than the
previous agreements, the returns over the full duration are acceptable.
Special items
For the year ended 31 December 2012, special items amounted to R6.0 million in respect of a settlement charge relating to
the defined benefit pension plan of R5.4 million and an asset impairment of R0.6 million (December 2011: R87.1 million
related to listing transaction costs and special financing costs).
Net finance costs
Net finance costs of R127.8 million were lower than the comparable prior period by 50.1% due to the debt restructuring
which took place on 5 July 2011 prior to listing on the JSE.
Tax
The effective tax rate of 30.0% (December 2011: 38.6%), was higher than the normal company income tax rate of 28%
mainly due to interest not deductible for tax purposes. Non-productive loans, for tax purposes, of R445 million on 31
December 2011 were repaid from operating cash flows during the year.
Earnings per share
Basic earnings and headline earnings per ordinary share for the year ended 31 December 2012 were 188.5 cents (December
2011: 54.9 cents) and 187.5 cents (December 2011: 54.3 cents), respectively. Underlying earnings per share increased from
102.9 cents to 191.1 cents over the same period.
Net debt
Net debt at 31 December 2012 was R1,056 million, a decrease of R251 million from 31 December 2011, due to strong cash
flow generation and improved working capital management.
Cash dividend
The Board has declared a final gross cash dividend of 50 cents per ordinary share for the year ended 31 December 2012.
Total gross dividends for the year, including the interim dividend of 20 cents per share paid on 8 October 2012 amounts to
70 cents per share (December 2011: 40 cents per share). 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
final dividend amount is 42.50 cents per share for shareholders liable to pay Dividends Tax and 50 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 final dividend are as follows:
Last day to trade to receive a dividend Friday, 19 April 2013
Shares commence trading "ex" dividend Monday, 22 April 2013
Record date Friday, 26 April 2013
Payment date Monday, 29 April 2013
Share certificates may not be dematerialised or rematerialised between Monday, 22 April 2013 and Friday, 26 April 2013,
both days inclusive.
OUTLOOK
For the foreseeable future Mpact expects GDP and consumer demand growth to remain subdued in South Africa. We
anticipate continued upward pressure on input costs such as labour, transport, electricity and municipal services.
Consequently, the Group expects trading conditions to remain highly competitive with the associated margin pressure.
Mpact's focus for the year will be on maintaining its market positions, productivity improvement and finding new
business opportunities.
The Group is confident that its strategy and resilience position Mpact well in the sectors in which it operates.
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.
AJ Phillips BW Strong
Chairman Chief Executive Officer
7 March 2013
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)
Sponsors:
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)
MPACT LIMITED
AUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2012
2012 2011
Before Special After Before Special After
special items special special items special
Notes items (note 5) items items (note 5) items
GROUP R'm R'm R'm R'm R'm R'm
Revenue 3 6,820.8 - 6,820.8 6,281.0 - 6,281.0
Cost of sales (4,079.7) - (4,079.7) (3,775.5) - (3,775.5)
Gross margin 2,741.1 - 2,741.1 2,505.5 - 2,505.5
Administration and other
operating expenses (1,829.6) (5.4) (1,835.0) (1,665.6) (53.1) (1,718.7)
Depreciation, amortisation and
impairments (326.8) (0.6) (327.4) (323.4) - (323.4)
Operating profit 3/4 584.7 (6.0) 578.7 516.5 (53.1) 463.4
Profit on disposal of
investments - - - - 0.3 0.3
Share of associates profit 8.6 - 8.6 2.3 - 2.3
Total profit from operations
and associates 593.3 (6.0) 587.3 518.8 (52.8) 466.0
Net finance costs (127.8) - (127.8) (256.3) (34.3) (290.6)
Investment income 9.9 - 9.9 28.4 - 28.4
Finance costs (137.7) - (137.7) (284.7) (34.3) (319.0)
Profit before taxation 465.5 (6.0) 459.5 262.5 (87.1) 175.4
Tax (charge)/credit (139.7) 1.7 (138.0) (76.1) 8.4 (67.7)
Profit from operations 325.8 (4.3) 321.5 186.4 (78.7) 107.7
Other comprehensive income:
Effects of cash flow hedges (4.7) 4.1
Actuarial (losses)/gains and
surplus restriction on post-
retirement benefit schemes (1.1) 28.4
Exchange differences on
translation of foreign operations
(0.1) 1.6
Cash flow hedge reserve
recycled through profit and loss - 23.1
Tax relating to components of
other comprehensive income 1.6 (15.6)
Other comprehensive (loss)/
income for the financial year net
of tax (4.3) 41.6
Total comprehensive income
for the financial year 317.2 149.3
Attributable to:
Non-controlling interests in
subsidiaries 12.7 17.9
Equity holders of Mpact 304.5 131.4
317.2 149.3
MPACT LIMITED
AUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)
for the year ended 31 December 2012
2012 2011
After special After special
Notes items items
GROUP (continued) R'm R'm
Profit for the financial year 321.5 107.7
Attributable to:
Non-controlling interests in subsidiaries 12.7 17.6
Equity holders of Mpact 308.8 90.1
Earnings per share (EPS) for profit attributable to
equity holders of Mpact
Basic EPS (cents) 6 188.5 54.9
Diluted EPS (cents) 6 187.9 54.9
MPACT LIMITED
AUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 December 2012
Notes 2012 2011
R'm R'm
Goodwill and other intangible assets 1,057.1 1,064.8
Property, plant and equipment 1,999.2 1,935.1
Investments in associates 70.2 69.1
Financial asset investments 10.6 10.6
Deferred tax assets 6.0 15.3
Retirement benefits surplus - 26.6
Non-current assets 3,143.1 3,121.5
Inventories 826.7 729.3
Trade and other receivables 1,462.9 1,329.2
Cash and cash equivalents 399.5 422.1
Derivative financial instruments 2.7 3.1
Current tax receivable 1.6 -
Current assets 2,693.4 2,483.7
Total assets 5,836.5 5,605.2
Short-term borrowings 332.8 577.9
Trade and other payables 1,478.6 1,293.6
Current tax liabilities 1.5 9.1
Other current liabilities 25.6 -
Provisions 1.8 2.5
Derivative financial instruments 0.8 1.9
Current liabilities 1,841.1 1,885.0
Non-current borrowings 1,122.3 1,151.2
Retirement benefits obligation 63.1 58.9
Deferred taxation liabilities 161.4 61.1
Other non-current liabilities - 37.0
Derivative financial instruments 6.2 -
Non-current liabilities 1,353.0 1,308.2
Total liabilities 3,194.1 3,193.2
Stated capital 7 2,326.0 2,334.1
Retained earnings/(accumulated loss) 215.6 (10.5)
Other reserves 11.2 (22.5)
Total attributable to equity holders of Mpact 2,552.8 2,301.1
Non-controlling interests in subsidiaries 89.6 110.9
Total equity 2,642.4 2,412.0
Total equity and liabilities 5,836.5 5,605.2
MPACT LIMITED
AUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2012
2012 2011
R'm R'm
Operating cash flows before movements in
working capital 913.7 765.0
Net (increase)/decrease in working capital (48.4) 48.1
Cash generated from operations 865.3 813.1
Dividends from associates and subsidiaries 7.5 -
Taxation paid (38.3) (23.6)
Net cash inflows from operating activities 834.5 789.5
Cash flows from investing activities
Acquisition of subsidiaries, net of cash (7.1) (16.8)
Proceeds from disposal of a business - 90.0
Proceeds from disposal of associate - 0.3
Replacement of property, plant and
equipment (362.5) (337.4)
Proceeds from the disposal of property, plant
and equipment 4.6 7.8
Acquisition of intangible assets (8.9) -
Investment in associate - (13.9)
Loan repayments from/(advances to) related
parties 1.6 2.4
Loan (advances to)/repayments from external
parties (1.6) 2.4
Interest received 9.9 10.0
Net cash outflows from investing activities (364.0) (255.2)
Cash flows from financing activities
Repayment of borrowings (261.5) (2,021.8)
Finance costs paid (102.0) (269.8)
Dividends paid to non-controlling interests (4.3) (1.5)
Dividends paid to equity holders of Mpact
Limited (98.3) -
Acquisition of non-controlling interest in a
subsidiary (1.8) (3.6)
Proceeds from non-controlling shareholder on
corporatisation of a business - 23.7
Issue of ordinary (share buy back)/share capital (8.1) 2,089.8
Repayment of other non-current liabilities (20.3) (40.0)
Net cash outflows from financing activities (496.3) (223.2)
Net (decrease)/increase in cash and cash
equivalents (25.8) 311.1
Cash and cash equivalents at beginning of
year(1) 406.9 95.8
Cash and cash equivalents at end of year1 381.1 406.9
(1) Cash and cash equivalents net of overdrafts.
MPACT LIMITED
AUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2012
Total
Share- Cash Post- Retained attributable
based flow retirement earnings/ to equity Non-
Stated payment hedge benefit Other (accumul- holders of controlling Total
capital reserves(2) reserves reserves reserves(1) ated loss) Mpact Ltd interests equity
Group R'm R'm R'm R'm R'm R'm R'm R'm R'm
Balance at 31 December 2010 244.3 12.1 (19.6) (3.3) (67.3) (58.3) 107.9 73.2 181.1
Total comprehensive income for the year - - 19.6 20.4 1.3 90.1 131.4 17.9 149.3
Issue of shares 2,089.8 - - - - - 2,089.8 - 2,089.8
Demerger arrangements - (22.5) - - - (15.3) (37.8) - (37.8)
Share plan charges for the year - 12.3 - - - - 12.3 - 12.3
Dividends paid to non-controlling interests - - - - - - - (1.5) (1.5)
Reclassification - (0.1) - - - 0.1 - - -
Change in foreign subsidiary functional currency - - - - 24.6 (25.9) (1.3) - (1.3)
Increase in shareholding of subsidiary - - - - - (1.2) (1.2) (2.4) (3.6)
Increase in non-controlling interest in a subsidiary - - - - - - - 23.7 23.7
Balance at 31 December 2011 2,334.1 1.8 - 17.1 (41.4) (10.5) 2,301.1 110.9 2,412.0
Total comprehensive income for the year - - (3.4) (0.8) (0.1) 308.8 304.5 12.7 317.2
Dividends paid - - - - - (98.3) (98.3) - (98.3)
Share buy back (3) (8.1) - - - - - (8.1) - (8.1)
Share plan charges for the year - 8.5 - - - - 8.5 - 8.5
Dividends paid to non-controlling interests - - - - - - - (4.3) (4.3)
Reclassification of pension fund reserve - - - (16.6) - 16.6 - - -
Decrease in non-controlling interest and put option
exercised (4) - - - - 46.1 (1.0) 45.1 (29.7) 15.4
Balance at 31 December 2012 2,326.0 10.3 (3.4) (0.3) 4.6 215.6 2,552.8 89.6 2,642.4
(1) Other reserves consist of the option to equity holder reserve of R16.0 million debit, (2011: R61.8 million debit) revaluation reserve of R0.8 million (2011: R0.8 million) and
currency translation adjustment reserve of R19.8 million (2011: R19.6 million).
(2) As a result of the demerger from Mondi, Mpact employees no longer participate in the Mondi bonus share plans. This resulted in an advanced vesting of the share based
payment reserve relating to the Mondi share plans. The Mondi share plan charge for the prior year including the advanced vesting of the shares amounted to R10.5 million.
Subsequent to the advanced vesting of the Mondi share plan, Mpact has set up its own share plans. The closing balance of the share based payment reserve as at
31 December 2012 represents the reserve relating to the Mpact share plans.
(3) On 13 July 2012 the Company repurchased 470 820 ordinary shares, at an offer price of R17.17 per share as a result of an odd-lot and specific offer.
(4) Minority shareholders of a group subsidiary exercised their put option which resulted in a decrease in their shareholding.
MPACT LIMITED
NOTES TO THE AUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
as at 31 December 2012
1. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and comply with the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, and is in compliance with the information
required by IAS 34, and the Companies Act, 71 of 2008.
The Group's annual financial statements, from which these condensed annual financial statements have been
derived, have been audited by the Company's auditors, Deloitte & Touche, whose unmodified report is available for
inspection at the registered office of the Company.
The preparation of these annual financial statements for the year ended 31 December 2012 was supervised by the
Chief Financial Officer, Mr BDV Clark CA(SA).
These condensed consolidated financial statements should be read in conjunction with the Group's annual
financial statements, from which they have been derived.
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
allocation referred to in note 3.
The Group has adopted the following Standards, amendments to published Standards and Interpretations during
the current year, all of which had no significant impact on the Group's results:
- IAS 1 - Presentation of Financial Statements
- IAS 12 - Income Taxes
The auditors, Deloitte & Touche, have issued their unmodified audit opinion on the Group's annual financial
statements for the year ended 31 December 2012. The audit was conducted in accordance with International
Standards on Auditing. This preliminary report has been derived from the Group's annual financial statements
and is consistent in all material respects. A copy of their audit report is available for inspection at the
company's registered office. The auditor's report does not necessarily cover all of the information contained in
this announcement. Shareholders are therefore advised that in order to obtain a full understanding of the
nature of the auditor's work, they should obtain a copy of that report together with the accompanying financial
information from the registered office of the Company.
3. OPERATING SEGMENTS
Operating segment revenue
2012 2011
Segment Internal External Segment Internal External
revenue revenue(1) revenue revenue revenue(1) revenue
R'm R'm R'm R'm R'm R'm
Paper 5,058.6 (16.2) 5,042.4 4,591.2 (18.6) 4,572.6
Plastics 1,778.6 (0.2) 1,778.4 1,577.0 (0.4) 1,576.6
Corporate and other
businesses(2) - - - 131.8 - 131.8
Segments total 6,837.2 (16.4) 6,820.8 6,300.0 (19.0) 6,281.0
Inter-segment elimination (16.4) 16.4 - (19.0) 19.0 -
Group total 6,820.8 - 6,820.8 6,281.0 - 6,281.0
(1) Inter-segment transactions are conducted on an arm's length basis.
(2) Corporate and other businesses relate to the Merchant business which was sold at the end of March 2011.
OPERATING SEGMENTS continued
2012 2011
R'm R'm
Operating segment operating profit/(loss)(1)
Paper 562.4 560.3
Plastics 116.7 113.9
Corporate and other businesses (94.4) (157.7)
Segments total 584.7 516.5
Special items (see note 5) (6.0) (87.1)
Share of associates profit 8.6 2.3
Net finance costs (127.8) (256.3)
Group profit before tax 459.5 175.4
Significant components of operating profit before special
items
Depreciation and amortisation
Paper 183.6 167.6
Plastics 109.5 111.6
Corporate and other businesses 33.7 44.2
Segments total 326.8 323.4
Operating segment assets
Segment assets (2)
Paper 2,837.4 2,743.6
Plastics 1,296.0 1,120.9
Corporate and other businesses 1,093.4 1,142.5
Inter-segment elimination (2.6) (1.9)
Segment total 5,224.2 5,005.1
Unallocated:
Investments in associates 70.2 69.1
Deferred tax assets 6.0 15.3
Other non-operating assets (3) 126.0 83.0
Group trading assets 5,426.4 5,172.5
Financial asset investments 10.6 10.6
Cash and cash equivalents 399.5 422.1
Group assets 5,836.5 5,605.2
(1) In the current year the internal cost re-allocation basis between the Paper and Plastics businesses and
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 R510.7 million and the operating profit for the Plastics business would have been R100.0
million. Corporate costs for the same period would have decreased as a result of the re-allocation.
(2) Segment assets are operating assets and as at 31 December 2012 consist of property, plant and equipment
of R1,999.2 million (2011: R1,935.1 million), goodwill and other intangible assets of R1,057.1 million (2011:
R1,064.8 million), retirement benefits surplus of Rnil (2011: R26.6 million), inventories of R826.7 million
(2011: R729.3 million) and operating receivables of R1,341.2 million (2011: R1,249.3 million).
(3) Other non-operating assets consist of derivative assets of R2.7 million (2011: R3.1 million), other non-
operating receivables of R121.7 million (2011: R79.9 million) and current tax receivable R1.6 million (2011:
Rnil million).
2012 2011
R'm R'm
4. OPERATING PROFIT
Operating profit for the year has been arrived
at after charging:
Impairment charge of property, plant and
equipment 0.6 -
Depreciation of property, plant and equipment 310.2 299.3
Amortisation of intangibles 16.6 24.1
5. SPECIAL ITEMS
Listing transaction costs(1) - 46.3
Special financing costs(2) - 34.3
Demerger arrangements (3) - 6.8
Profit on disposal of part investment in
associate - (0.3)
Defined benefit pension plan settlement
charge(4) 5.4 -
Impairment of property, plant and
equipment 0.6 -
Total special items before tax and non-
controlling interests 6.0 87.1
Tax (1.7) (8.4)
4.3 78.7
Non-controlling interests - -
Total special items attributable to equity
holders of Mpact 4.3 78.7
(1) Listing transaction costs associated with the listing of the Company on the Johannesburg Stock Exchange in
July 2011.
(2) As a result of the demerger from Mondi, and separate listing, the Group restructured, and settled its long
term debt including its floating rate debt. As a result of the settlement of the floating rate debt, the
corresponding interest rate swap on this debt was terminated. The costs of R23.1 million of early
termination of the interest rate swap, have been included in finance costs for the prior year. In addition,
finance costs of R11.2 million were incurred on the debt financing arrangements.
(3) Equity-settled demerger arrangements for senior management have resulted in a fair value charge for the
Group.
(4) A settlement charge recognised in the current year relating to the winding up of the defined benefit pension
plan.
6. EARNINGS PER SHARE
Cents per share
2012 2011
Earnings per share (EPS)
Basic EPS 188.5 54.9
Diluted EPS 187.9 54.9
Underlying earnings per share for the financial year(1)
Basic underlying EPS 191.1 102.9
Diluted underlying EPS 190.5 102.8
Headline earnings per share for the financial year(2)
Basic headline EPS 187.5 54.3
Diluted headline EPS 186.9 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 3/2012, Headline Earnings', as issued by the South African
Institute of Chartered Accountants.
The calculation of basic and diluted EPS, basic and diluted underlying EPS, and basic and diluted headline EPS is
based on the following data:
Earnings
2012 2011
R'm R'm
Profit for the financial year attributable to equity holders of
Mpact 308.8 90.1
Special items (see note 5) 6.0 87.1
Related tax (1.7) (8.4)
Underlying earnings for the financial year 313.1 168.8
Special items to be included in headline earnings (5.4) (87.4)
Profit on disposal of tangible and intangible assets (2.9) (1.1)
Related tax 2.3 8.7
Headline earnings for the financial year 307.1 89.0
Weighted number of shares
2012 2011
Basic number of ordinary shares outstanding 163,825,216 164,046,476
Effect of dilutive potential ordinary shares(1) 533,954 173,484
Diluted number of ordinary shares outstanding 164,359,170 164,219,960
(1) 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.
2012 2011
R'm R'm
7. STATED CAPITAL
Authorised share capital
217,500,000 shares of no par value - -
Issued share capital
Conversion of share premium to stated capital - 244.3
Issue of 163,575,656 (2011:164,046,476) shares
of no par value 2,334.1 2,089.8
Repurchase of shares (8.1) -
2,326.0 2,334.1
On 28 April 2011 the number of ordinary shares in issue was increased from 159,950 ordinary shares to 23,192,750
ordinary shares following a share split. On 5 July 2011 an additional 140,853,726 ordinary shares were issued to the
then shareholders as part of Mpact's capital restructuring prior to listing. Consequently the Company listed on 11
July 2011 with 164,046,476 issued ordinary shares. All issued and authorised ordinary shares in the Company with a
par value have been converted into ordinary shares of no par value. On 13 July 2012 the listing of 470,820 ordinary
shares of no par value was withdrawn in terms of the Company's specific repurchase of shares.
8. BUSINESS COMBINATIONS
On 1 February 2012, the Group acquired a PET tray business for R8.0 million as a going concern. Profit for the year
arising on this acquisition was not material for the Group.
2012 2011
R'm R'm
9. CAPITAL COMMITMENTS
Contracted for, but not provided 62.5 51.5
Approved, not yet contracted for 43.2 20.9
105.7 72.4
The capital commitments will be financed from existing cash resources and borrowing facilities.
10. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
a. Contingent liabilities for the Group comprise aggregate amounts at 31 December 2012 of R7.7 million
(2011: R8.6 million) in respect of loans and guarantees given to banks and other third parties.
b. A Group mill is the subject of a land claim, which should not have a material impact on the financial position
of the Group.
c. There are a number of legal and tax claims against the Group. Provision is made for all liabilities that are
expected to materialise.
d. In the current year a settlement was reached in respect of a dispute relating to the valuation of put options
in a group subsidiary. The settlement agreement provides for a deferred payment contingent upon the
achievement of certain EBITDA and ROCE levels for the years 2013 to 2018, subject to a maximum amount
of R18.4 million.
e. There were no significant contingent assets for the Group at 31 December 2012 and 31 December 2011.
11. RELATED PARTY TRANSACTIONS
The Group and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and services
transactions with joint ventures and 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.
12. POST-BALANCE SHEET EVENTS
On 6 February 2013, a Group subsidiary acquired a PET tray business for R15.0 million, as a going concern.
Date: 07/03/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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