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TRANSPACO LIMITED - Unaudited Interim results for the six months to 31 December 2013

Release Date: 19/02/2014 07:05
Code(s): TPC     PDF:  
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Unaudited Interim results for the six months to 31 December 2013

Transpaco Limited
(Incorporated in the Republic of South Africa)
Registration number 1951/000799/06
ISIN: ZAE000007480
JSE Share code: TPC


UNAUDITED CONDENSED INTERIM GROUP RESULTS FOR THE SIX MONTHS TO 31 DECEMBER
2013 AND DIVIDEND ANNOUNCEMENT


HIGHLIGHTS
REVENUE UP 10%
HEADLINE EARNINGS PER SHARE UP 7%
DIVIDEND PER SHARE 39,0 CENTS


Introduction
Transpaco continued to deliver pleasing results despite a challenging economic environment. The group’s
margins remain under pressure as raw material prices continue to increase driven by the weakening
exchange rate. However, controlled expenses and higher volumes helped to mitigate the impact on the
group’s performance.


Financial Results
The group increased headline earnings by 7,2% to R46,5 million (December 2012: R 43,3 million). Headline
earnings per share (HEPS) grew by 6,7% to 144,5 cents (December 2012: 135,4 cents). Earnings per share
(EPS) increased by 6,7%, to 144,7 cents (December 2012: 135,6 cents).


Diluted HEPS rose by 7,1% to 141,9 cents (December 2012: 132,5 cents).


Total operating profit grew 7,3% to R64,6 million (December 2012: R60,2 million) on turnover of R667,6
million, up 10,2% (December 2012: 606,1 million).


Operating profit in the Plastic division increased against a year-on-year reduction in the Paper and Board
division caused by an unexpected decline in demand for certain board products.


Transpaco utilised R7,9 million in cash from operating activities (December 2012: generated R37,9 million in
cash). A combination of higher inventory and trade debtors due to increased sales, and early payment to
trade creditors for discount purposes resulted in this change. The latter also reduced the cash balance at 31
December 2013 to R17,2 million compared to the previous year-end R65,3 million.


The group’s net interest-bearing debt-to-equity position was 5,3% (December 2012: net cash positive) with
an interest cover of 166,9 times (December 2012: 100 times).


Net asset value per share increased by 11, 9% to 1 220 cents (December 2012: 1 090 cents)
 



Prospects
The group will continue its proven business strategy, targeting organic growth while maintaining strict
financial control and at the same time identifying and pursuing appropriate acquisitions.


Dividend
The board has declared an interim gross cash dividend out of income reserves of 39,0 cents per share
(December 2012: 36,5 cents per share) for the six-month period ending 31 December 2013, an increase of
6,8%. No STC credits have been utilised. After applying the dividend withholding tax of 15% a net interim
dividend of 33,15000 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 Income Tax
reference no. is 9975/112/71/6.


The salient dates for the dividend are as follows:
Last date to trade shares cum dividend                  Thursday, 13 March 2014
Shares trade ex-dividend                                Friday, 14 March 2014
Record date                                             Thursday, 20 March 2014
Payment date                                            Monday, 24 March 2014


Share certificates may not be dematerialised or rematerialised between Friday, 14 March 2014 and
Thursday, 20 March 2014, both days inclusive


Basis of Preparation and Accounting Policies
The unaudited interim financial results have been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB), its interpretations issued by the IFRS Interpretations Committee, the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the presentation and
disclosure requirements set out in IAS 34 – Interim Financial Reporting and comply with the JSE Listings
Requirements and the Companies Act of South Africa. 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 2013. Transpaco has adopted all applicable new and amended standards, the effect of which had
no material impact on the unaudited interim financial results.


Approval and Preparation
These unaudited interim 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                           P N 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                           19 February 2014
Auditors                       Ernst & Young Incorporated
Transpaco Limited              Registration number: 1951/000799/06
                               Share code: TPC
                               ISIN: ZAE000007480
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

                                                          Unaudited              Unaudited        Audited
                                                           6 months         %     6 months      12 months
    R'000                                                  Dec 2013     change    Dec 2012      June 2013

    Revenue                                                 668 742                607 051      1 125 260

    Turnover                                                667 596      10.2      606 060      1 123 204
    Cost of sales                                         (431 096)              (384 616)      (715 749)
    Profit before operating costs and depreciation          236 500       6.8      221 444        407 455
    Operating Costs                                       (155 119)              (145 805)      (282 697)
    Depreciation                                           (16 807)               (15 461)       (31 618)
    Operating profit                                         64 574       7.3       60 178         93 140
    Finance income                                            1 146                    991          2 056
    Finance costs                                           (1 533)                (1 599)        (3 085)
    Profit before taxation                                   64 187       7.8       59 570         92 111
    Taxation                                               (17 643)               (16 180)       (25 246)
    Profit for the period                                    46 544       7.3       43 390         66 865
    Other comprehensive income                                    -                      -              -
    Total comprehensive income                               46 544       7.3       43 390         66 865
    Weighted average number of shares in issue
    ('000)                                                   32 164                 32 000         32 012
    Diluted weighted average number of shares in
    issue ('000)                                             32 747                 32 710         32 719
    Earnings per share (cents)                                144.7        6.7       135.6          208.9
    Diluted earnings per share (cents)                        142.1        7.1       132.7          204.4
    Headline earnings per share (cents)                       144.5        6.7       135.4          208.2
    Diluted headline earnings per share (cents)               141.9        7.1       132.5          203.7
    Dividend per share (cents)*                                39.0        6.8        36.5           90.0
    *Dividend declared after the period
    Reconciliation of headline earnings (R'000)
    Basic earnings                                           46 544                 43 390         66 865
    Profit on disposal of property, plant and equipment        (75)                   (61)          (208)
    Headline earnings                                        46 469        7.2      43 329         66 657
 




STATEMENT OF FINANCIAL POSITION

                                                 Unaudited   Unaudited       Audited
                                                  6 months    6 months    12 months
    R'000                                         Dec 2013    Dec 2012    June 2013
    ASSETS
    Non-current assets                             202 702     190 055      202 602
       Property, plant and equipment               195 906     181 224      193 901
       Intangibles                                     482         482          482
       Goodwill                                      3 204       3 204        3 204
       Long-term receivables                             -       1 822          642
       Deferred taxation                             3 110       3 323        4 373
    Current assets                                 392 807     371 331      393 393
       Inventories                                 128 454     108 554      120 416
       Trade and other receivables                 243 609     194 318      185 579
       Short-term receivables                        2 013       2 202        2 308
       Taxation
       receivable                                   1 356         965         1 404
       Cash and cash equivalents                   17 375      65 292        83 686
    Non-current assets classified as held-for-
    sale                                               885         885          885
    TOTAL ASSETS                                   596 394     562 271      596 880
    EQUITY AND LIABILITIES
    Capital and
    reserves                                       390 489     348 913      360 935
       Issued share capital                            320         320          320
       Share premium                                11 019      11 019       11 019
       Other reserves                                3 652       3 056        3 358
       Distributable reserve                       375 498     334 518      346 238
    Non-current liabilities                         50 342      46 924       53 491
       Interest-bearing borrowings                  26 689      24 667       32 612
       Deferred taxation                            23 653      22 257       20 879
    Current liabilities                            155 563     166 434      182 454
       Trade payables and accruals                 123 023     134 747      148 898
       Provisions                                   19 906      15 495       17 449
       Current portion of interest-bearing
       borrowings                                   11 387      14 639       13 244
       Taxation payable                              1 114       1 553        2 863
       Bank overdraft                                  133           -            -

    TOTAL EQUITY AND LIABILITIES                   596 394     562 271       596 880
    Number of shares in issue('000)
    Number of shares (net of treasury shares)       32 017      31 991        31 991
    Net movement in treasury shares                      2          26            26
    Ranking number of shares                        32 019      32 017        32 017
    Salient features
    Net asset value per share (cents)                1 220       1 090         1 127
    Operating margin %                                9,7          9,9           8,3
                                                              Net cash      Net cash
    Net interest-bearing debt : equity ratio %         5,3    positive      positive
    Net interest cover (x)                           166,9         100          90,5
 




STATEMENT OF CASH FLOWS

                                                         Unaudited      Unaudited       Audited
                                                          6 months       6 months       12 months
    R'000                                                 Dec 2013       Dec 2012       June 2013
    Cash flow from operating activities
        Cash (utilised)/generated from operations          (7 916)         37 868        100 067
        Dividends paid                                    (17 295)       (15 765)       (27 521)
        Finance costs                                      (1 533)        (1 599)        (3 085)
        Finance income                                       1 146            991          2 056
        Taxation paid                                     (15 307)       (13 145)       (23 768)
    Net cash (outflow)/inflow from operating
    activities                                            (40 905)          8 350         47 749
    Cash flow from investing activities
        Proceeds on disposal of property, plant and
        equipment                                              270            199            436
        Expansion and replacement of property,
        plant and equipment                               (18 977)       (11 140)       (40 007)
        Decrease in long-term receivables                      642          1 129          2 309
        Decrease/(increase) in short-term
        receivables                                            295           (92)          (198)
    Net cash outflow from investing activities            (17 770)        (9 904)       (37 460)
    Cash flow from financing activities
        (Decrease)/increase in interest-bearings
        borrowings                                         (5 923)          (301)          7 644
        Decrease in current portion of interest-
        bearing borrowings                                 (1 857)        (3 552)        (4 947)
        Movement in treasury shares                             11            147            148
    Net cash (outflow)/inflow from financing
    activities                                             (7 769)        (3 706)          2 845
    Net movement in cash for the period                   (66 444)        (5 260)         13 134
    Cash and cash equivalents at the beginning of
    the period                                              83 686         70 552         70 552
    Cash and cash equivalents at the end of the
    period                                                  17 242         65 292         83 686
 




SEGMENTAL ANALYSIS


                                           Plastic    Paper and   Properties     Total
                                          Products        Board    and Group
    R'000                                              Products     Services

    Turnover - 2013                        447 264      220 332            -   667 596
    Turnover to customers                  478 904      233 583            -   712 487
    Less turnover to internal customers     31 640       13 251            -    44 891

    Turnover - 2012                        381 474      224 586            -   606 060
    Turnover to customers                  401 911      232 749            -   634 660
    Less turnover to internal customers     20 437        8 163            -    28 600

    Operating profit - 2013                 39 358       22 728        2 488    64 574
    Operating profit - 2012                 30 962       27 664        1 552    60 178

    Profit before tax- 2013                 38 787       22 183        3 217    64 187
    Profit before tax- 2012                 30 161       27 537        1 872    59 570

    Capital expenditure - 2013              17 140        1 344          493    18 977
    Capital expenditure - 2012               4 410        6 242          488    11 140

    Assets - 2013                          395 971      158 746       41 677   596 394
    Assets - 2012                          333 961      153 686       74 624   562 271

    Liabilities - 2013                     122 154       62 745      21 006    205 905
    Liabilities - 2012                     128 187       65 942      19 229    213 358
 




CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                         Issued
                                          Share        Share      Other  Distributable
    R'000                               Capital      Premium   Reserves        Reserve        Total
    Balance at 30 June 2012 (audited)      320        11 019      2 438        306 746      320 523
    Total comprehensive income                -            -          -         43 390       43 390
    Share-based payments                      -            -        618              -          618
    Dividend paid                             -            -          -       (15 765)     (15 765)
    Movement in treasury shares               -            -          -            148          148
    Balance at 31 December 2012
    (unaudited)                             320       11 019      3 056        334 519      348 914
    Total comprehensive income               -             -          -         23 475       23 475
    Share-based payments                     -             -        302              -          302
    Dividend paid                            -             -          -       (11 756)     (11 756)
    Balance at 30 June 2013 (audited)      320        11 019      3 358        346 238      360 935
    Total comprehensive income               -             -          -         46 544       46 544
    Share-based payments                     -             -        294              -          294
    Dividend paid                            -             -          -       (17 295)     (17 295)
    Movement in treasury shares              -             -          -             11           11
    Balance at 31 December 2013
    (unaudited)                            320        11 019      3 652        375 498      390 489

CAPITAL COMMITMENTS

                                                   Unaudited        Unaudited            Audited
                                                    6 months         6 months          12 months
    R'000                                           Dec 2013         Dec 2012          June 2013
    Capital expenditure authorised
    and contracted
    Property, plant and equipment                     13 258           25 256              9 347

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