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Astrapak Operational Update and Trading Statement for the twelve months ended 28 February 2014
Astrapak Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1995/09169/07
ISIN: ZAE000096962
Share Code: APK
("Astrapak" or "the Group" or "the Company")
Astrapak Operational Update and Trading Statement for the twelve months ended 28 February
2014
Operational update
The financial year ended 28 February 2014 completes the first phase of the two-year recovery time-
frame objective for Astrapak.
Astrapak's financial results for the twelve months ended 28 February 2014 are scheduled to be
released on the Stock Exchange News Services of the JSE Limited on Tuesday 13 May 2014. A results
presentation is scheduled for Wednesday 14 May 2014 in Johannesburg and Thursday 15 May 2014
in Cape Town. Further information on progress achieved and the outlook will be shared at that time.
Trading conditions remained difficult during the second six months of the financial year with a weak
rand in particular placing upward pressure on polymer prices and distribution costs. It is pleasing to
note, however, that efforts to improve the competitive position of key portfolio companies is
resulting in growth in volume on a comparable basis and in full price recovery. In addition the focus
on co-ordinating pricing and procurement centrally has been beneficial in this regard.
Astrapak has made a concerted effort to engage proactively and openly with customers. The Group
has been well placed in respect of important tenders and contracts from leading local and
multinational companies and is already benefiting from this.
An important challenge has been to work hard on future growth, business improvement and earning
customer confidence at a time when tough decisions have had to be made and action taken to
eliminate underperformance and create sustainable operations of scale.
The executive leadership now has a good understanding of where the Group is best positioned for
the future. In addition to the right-sizing measures already taken, other strategic options are being
considered.
Trading statement
Following on from the attributable loss recorded for the six months ended 31 August 2013 the
Company is now in a position to confirm that an attributable loss will also be recorded for the twelve
months ended 28 February 2014.
The attributable loss is predominantly due to a number of material exceptional and non-recurring
losses in the period. These non-recurring items include a reduction of the insurance proceeds
estimate in the prior year, losses from discontinued operations, asset impairments related largely to
the Flexible restructuring exercise post the finalisation of the insurance proceeds and stock write-
offs.
Comparative earnings are skewed by insurance income in the amount of R263,9 million relating to
property, plant and equipment destroyed in a fire at East Rand Plastics.
A prior year restatement relating to the accounting treatment of certain properties has been advised
by the auditors. The effect of this restatement is not material in respect of the statement of
comprehensive income, but results in an increase the net tangible asset value of the Group. The
classification accorded to continuing and discontinued operations has also been restated.
Continuing turnover has increased slightly. Flexibles turnover continues to be managed down in line
with the deliberate strategy to shrink the footprint whilst Rigids turnover has shown pleasing growth
– a combination of real volume growth and price recovery.
Profit before interest and tax from continuing operations is expected to show a decline of between
60% and 80% on the restated comparative for the twelve months ended 28 February 2013.
Earnings per ordinary share, which includes both continuing and discontinued operations, is
expected to decrease by between 160% and 170% compared to the 102,4 cents reported for the
restated twelve month period ended 28 February 2013 and thus reflects a loss. The loss is due to the
exceptional items, items of a non-recurring nature and the loss-making discontinued operations.
Earnings per ordinary share from continuing operations is expected to decrease by between 130%
and 140% and thus reflects a loss compared to the prior year comparative of 120,47 cents. The loss
is predominantly due to exceptional items and other items of a non-recurring nature.
Headline earnings per ordinary share from both continuing operations and discontinued operations
is expected to decrease by between 425% and 435% compared to the prior year comparative of 9,9
cents and thus reflects a loss.
Headline earnings per ordinary share from continuing operations is expected to decrease by
between 145% and 150% compared to the prior year comparative of 25,3 cents and thus reflects a
small loss. From a statutory accounting point of view positive headline earnings adjustments to
attributable income only reflect part of the total amount in exceptional items and non-recurring
items.
The statement of financial position is expected to reflect an improvement in the debt to equity ratio
compared with the position as at 28 February 2013 and within the gearing percentage ceiling set by
management. The major components of working capital have been carefully managed and compare
favourably with the prior year. Astrapak's property strategy has been well executed and this has
been beneficial from a net asset value point of view and with respect to cash flow.
The financial information on which this operational update and trading statement is based has not
been reviewed and reported on by the Company’s external auditors.
Denver
30 April 2014
Sponsor
RAND MERCHANT BANK (A division of First Rand Bank Limited)
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