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TRANSPACO LIMITED - Reviewed Condensed Consolidated Results for the year ended 30 June 2013 and Dividend Announcement

Release Date: 21/08/2013 07:05
Code(s): TPC     PDF:  
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Reviewed Condensed Consolidated Results for the year ended 30 June 2013 and Dividend Announcement

Transpaco Limited
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC

Reviewed Condensed Consolidated Results for the year ended 30 June 2013 and Dividend Announcement

Group turnover up 7%
Net asset value up 12%
Final dividend per share 53,5 cents



Introduction
Transpaco maintained its consistent performance with good turnover growth and a slight increase in
headline earnings per share despite challenging trading conditions.


Turnover of R1,12 billion was attributable to a combination of volume growth and price increases. Aggressive
marketing and sales strategies remain a prime imperative to maintain this momentum, especially given the
difficult economic climate.


Transpaco’s performance was further strengthened by controlled operating costs, enhanced production and
manufacturing efficiencies, and well-managed working capital which was supported by minimal net interest
paid of R1,0 million (June 2012: R1,2 million).


Notwithstanding the group’s positive growth, margins remain under pressure from increased competition and
higher input costs – notably energy and plastic raw materials. Further, the transport and mining strikes during
the year adversely affected certain Transpaco markets.


Financial Results
Turnover increased to R1,12 billion, up 6,7% (June 2012: R1,05 billion). The increase occurred in both the
Plastic and Paper and Board divisions, enabling the group to maintain market share.


Operating profit increased in the Paper and Board divisions, with a decline in the Plastic division resulting in
group operating profit of R93,1 million (June 2012: R95,7 million).


Transpaco’s total comprehensive income grew 0,5% to R66,9 million (June 2012: R66,6 million).


Headline earnings increased 2,0% to R66,7 million (2012: R65,3 million), translating into a 1,3% rise in
headline earnings per share (HEPS).


The weighted average number of shares in issue in calculating HEPS and EPS is 32 012 000 compared to
31 782 000 in the previous year.
Diluted HEPS increased 1,3% to 203,7 cents (June 2012: 201,1 cents).


Cash generated from operations amounted to R100,1 million (June 2012: R101,9 million). Cash and cash
equivalents at the end of the year were R83,7 million (June 2012: R70,6 Million), which reflected an increase
of 18,6%.


Transpaco’s net interest-bearing debt-to-equity position remains cash positive.


Interest cover improved to 90,5 times (June 2012: 67,6 times).


Net asset value per share increased by 12,4% to 1 127cents (June 2012: 1 002 cents).


Prospects
The economic landscape continues to present challenges, with tough trading conditions. Management will
remain focused on sound business and financial fundamentals in an effort to achieve Transpaco’s organic
growth ambitions.


Expansion opportunities including acquisitions continue to be pursued.


Transformation
We are pleased to report that our fourth independent accreditation process in respect of B-BBEE during the
year reflected an improvement in our level of contribution. Transpaco is now a Level 4 value added
contributor. We are proud that our customers can count 125% of their purchases from Transpaco as
preferential procurement.



Dividend
The board has declared a final gross cash dividend out of income reserves of 53,5 cents per share. This
resulted in total dividends of 90,0 cents per share for the year (June 2012: 80,0 cents per share), an increase
of 12,5%.


After applying the dividend withholding tax of 15% a net final dividend of 45,47500 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, 13 September 2013
Shares trade ex-dividend                                 Monday, 16 September 2013
Record date                                              Friday, 20 September 2013
Payment date                                             Monday, 23 September 2013


Share certificates may not be dematerialised or rematerialised between Monday, 16 September 2013 and
Friday, 20 September 2013, 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 Accounting Standards Board (IASB), the presentation and
disclosure requirements set out in IAS 34 – Interim Financial Reporting, the AC 500 standards as issued by
the Accounting Practices Board or its successor, and comply with the Listings Requirements of 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
group’s annual financial statements for the year ended 30 June 2012.


Review of Independent Auditors
The group’s auditors Ernst & Young Inc. have reviewed the condensed consolidated financial information for
the year. Their review report is available for inspection at Transpaco’s registered office. The review was
performed in accordance with ISRE 2410: Review of Interim Financial Information Performed by the
Independent Auditor of the Entity.


Approval and Preparation
These condensed consolidated 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                              PN Abelheim                           L Weinberg
Non–executive Chairman                Chief Executive                       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
**independent


Date                    21 August 2013
Auditors                Ernst & Young Inc.
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) Limited
                        70 Marshall Street Johannesburg
Website                 www.transpaco.co.za
 STATEMENT OF COMPREHENSIVE INCOME
                                                                      Reviewed                        Audited
                                                                     12 months          %          12 months
 R'000                                                               June 2013      Change         June 2012
 CONTINUING OPERATIONS
 Revenue                                                               1 125 260                   1 047 021
 Turnover                                                              1 123 204         7,6       1 044 221
 Cost of sales                                                         (715 749)                   (660 088)
 Profit before operating costs and depreciation                          407 455         6,1         384 133
 Operating costs                                                       (282 697)                   (256 077)
 Depreciation                                                            (31 618)                    (27 486)
 Operating profit                                                          93 140       (7,4)        100 570
 Finance income                                                             2 056                       2 800
 Finance costs                                                            (3 085)                     (4 032)
 Profit before taxation                                                    92 111       (7,3)          99 338
 Taxation                                                                (25 246)                    (29 019)
 Profit for the year from continuing operations                            66 865       (4,9)          70 319
 Loss for the year from discontinued operations                                 –                     (3 756)
 Profit for the year                                                       66 865                      66 563
 Other comprehensive income                                                     –                           –
 Total comprehensive income                                                66 865        0,5           66 563
 Weighted average number of shares in issue (‘000)                         32 012                      31 782
 Diluted weighted average number of shares in issue (‘000)                 32 719                      32 485
 Continuing operations
 Earnings per share (cents)                                                208,9        (5,6)           221,3
 Diluted earnings per share (cents)                                        204,4        (5,6)           216,5
 Headline earnings per share (cents)                                       208,2        (4,8)           218,7
 Diluted headline earnings per share (cents)                               203,7        (4,8)           214,0
 Continuing and discontinued operations
 Earnings per share (cents)                                                208,9        (0,2)           209,4
 Diluted earnings per share (cents)                                        204,4        (0,2)           204,9
 Headline earnings per share (cents)                                       208,2          1,3           205,6
 Diluted headline earnings per share (cents)                               203,7          1,3           201,1
 Dividend per share (cents)*                                                85,5          6,9            80,0
 Reconciliation of headline earnings (R’000)
 Continuing operations
 Basic earnings                                                           66 865                       70 319
 Profit on disposal of property, plant and equipment                       (208)                        (797)
 Headline earnings                                                        66 657        (4,1)          69 522
 Continuing and discontinued operations
 Basic earnings                                                           66 865                      66 563
 Profit on disposal of property, plant and equipment                       (208)                      (1 230)
 Headline earnings                                                        66 657         2,0          65 333


*Includes interim dividend of 36,5 cents (June 2012: 31 cents) and a dividend declared after the period of 53,5
cents (June 2012: 49 cents).
STATEMENT OF CASH FLOWS
                                                                 Reviewed       Audited
                                                                12 months    12 months
R'000                                                           June 2013    June 2012
Cash flow from operating activities
   Cash generated from operations                                 100 067      101 893
   Dividends paid                                                 (27 521)     (23 452)
   Finance costs from continuing operations                        (3 085)      (4 032)
   Finance costs from discontinued operations                            –        (452)
   Finance income from continuing operations                         2 056        2 800
   Finance income from discontinued operations                           –          271
   Taxation paid                                                  (23 768)     (26 784)
Net cash inflow from operating activities                           47 749       50 244
Cash flow from investing activities
   Proceeds on disposal of property, plant and equipment               436       13 341
   Expansion and replacement of property, plant and equipment     (40 007)     (67 007)
   Decrease in unlisted investments                                      –           17
   Decrease/(increase) in long-term receivables                      2 309      (2 951)
   Increase in short-term receivables                                (198)      (2 110)
Net cash outflow from investing activities                        (37 460)     (58 710)
Cash flow from financing activities
   Movement in treasury shares                                         148        1 698
   Increase/(decrease) in interest-bearing borrowings                7 644        (926)
   Decrease in current portion of interest-bearing borrowings      (4 947)      (2 247)
Net cash inflow/(outflow) from financing activities                  2 845      (1 475)
Net movement in cash for the year                                  13 134       (9 941)
Cash and cash equivalents at the beginning of the year             70 552       80 493
Cash and cash equivalents at the end of the year                   83 686       70 552
STATEMENT OF FINANCIAL POSITION
                                                     Reviewed       Audited
                                                    12 months    12 months
R'000                                               June 2013    June 2012
ASSETS
Non-current assets                                    202 602      195 482
     Property, plant and equipment                    193 901      185 659
     Intangibles                                          482          482
     Goodwill                                           3 204        3 204
     Long-term receivables                                642        2 951
     Deferred taxation                                  4 373        3 186
Current assets                                        393 393      368 685
     Inventories                                      120 416      123 521
     Trade and other receivables                      185 579      169 942
     Short-term receivables                             2 308        2 110
     Taxation receivable                                1 404        2 560
     Cash and cash equivalents                         83 686       70 552
Non-current asset classified as held-for-sale             885          885
TOTAL ASSETS                                          596 880      565 052
EQUITY AND LIABILITIES
Capital and reserves                                  360 935      320 523
   Issued share capital                                   320          320
   Share premium                                       11 019       11 019
   Other reserves                                       3 358        2 438
   Distributable reserve                              346 238      306 746
Non-current liabilities                                53 491       46 694
   Interest-bearing borrowings                         32 612       24 968
   Deferred taxation                                   20 879       21 726
Current liabilities                                   182 454      197 835
   Trade payables and accruals                        148 898      162 951
   Provisions                                          17 449       16 186
   Current portion of interest-bearing borrowings      13 244       18 191
Taxation payable                                        2 863          507

TOTAL EQUITY AND LIABILITIES                          596 880      565 052
Number of shares in issue (‘000)
Number of shares (net of treasury shares)              31 991       31 691
Net movement in treasury shares                            26          300
Ranking number of shares                               32 017       31 991
Salient features
Net asset value per share (cents)                       1 127        1 002
Operating margin %                                       8,3%        9,1%
                                                     Net cash     Net cash
Net interest-bearing debt:equity ratio %              positive     positive
Net interest cover (x)                                    90,5        67,7
  SEGMENTAL ANALYSIS

                                                Paper   Properties
                                                  and          and         Total
                                   Plastic      board       group    continuing    Discontinued        Total
R'000                            products    products     services   operations      operations       group

Turnover – 2013                   689 172     434 032           –     1 123 204               –    1 123 204
Turnover to customers             738 518     450 872           –     1 189 390               –    1 189 390
Less turnover to internal          49 346      16 840           –        66 186               –       66 186
customers

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          40 687      17 677           –        58 364           1 344       59 708
customers

Operating profit – 2013            36 028      53 360       3 752        93 140                –     93 140
Operating profit /(loss)– 2012     54 981      44 227       1 362       100 570          (4 858)     95 712

Profit before tax– 2013            34 557      52 943       4 611        92 111                –     92 111
Profit/(loss) before tax– 2012     52 737      44 674       1 927        99 338          (5 039)     94 299

Capital expenditure – 2013         15 861      22 838       1 308        40 007               –      40 007
Capital expenditure – 2012         57 255       9 374         378        67 007               –      67 007

Assets – 2013                     334 186     165 794      96 900       596 880               –     596 880
Assets – 2012                     336 742     141 248      87 062       565 052               –     565 052

Liabilities – 2013                133 908      76 209      25 828       235 945               –     235 945
Liabilities – 2012                153 049      72 051      19 429       244 529               –     244 529
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                              Share        Share          Other   Distributable
R'000                                        Capital    Premium        Reserves        Reserve           Total
Balance at 30 June 2011                         317       11 019          1 204         261 940       274 480
Profit for the year                                –           –              –          66 563         66 653
Other comprehensive income                         –           –              –               –              –
Total comprehensive income                         –           –              –          66 563         66 653
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
Profit for the year                                –           –              –          66 865         66 865
Other comprehensive income                         –           –              –               –              –
Total comprehensive income                         –           –              –          66 865         66 865
Share-based payments                               –           –            920               –            920
Dividend paid                                      –           –              –        (27 521)       (27 521)
Movement in treasury shares                        –           –              –             148            148
Balance at 30 June 2013                         320       11 019          3 358         346 238       360 935

DISCONTINUED OPERATIONS
                                                                                   Reviewed           Audited
                                                                                  12 months        12 months
R'000                                                                             June 2013        June 2012
Turnover                                                                                  –             9 976
Expenses                                                                                  –          (14 834)
Operating loss                                                                            –           (4 858)
Finance income                                                                            –               271
Finance costs                                                                             –             (452)
Loss before tax from discontinued operations                                              –           (5 039)
Taxation                                                                                  –             1 283
Loss after tax from discontinued operations                                               –           (3 756)
Loss per share (cents) from discontinued operations                                       –            (11,9)
Diluted loss per share (cents) from discontinued operations                               –            (11,6)
Headline loss per share (cents) from discontinued operations                              –            (13,1)
Diluted headline loss per share (cents) from discontinued operations                      –            (12,9)
Cash flows from discontinued operations
Net cash flows from operating activities                                                   –          (7 193)
Net cash flows from investing activities                                                   –            5 305
Net cash flows from financing activities                                                   –                –
Net cash flows                                                                             –          (1 888)

CAPITAL COMMITMENTS

                                                                                   Reviewed          Audited
                                                                                  12 months       12 months
R'000                                                                             June 2013       June 2012
Capital expenditure authorised and contracted
Property, plant and equipment                                                          9 347         12 821

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