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Audited provisional financial results for the twelve months ended 28 February 2014
Astrapak Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/009169/06)
Share code: APK
ISIN: ZAE000096962
Share code: APKP
ISIN: ZAE000087201
(“Astrapak” or ”the company“ or “the Group”)
Audited provisional financial results for the twelve months ended 28 February 2014
Charting our course
Commentary
Strategic update
During 2014 the executive leadership team of Astrapak has progressed well with the implementation of the turnaround strategy
and has completed the first phase of the two-year recovery time-frame objective. There is a good understanding of where the
Group is best positioned for the future.
Since the conclusion of an extensive review and development of a recovery plan, led by Chief Executive Officer Robin Moore,
all stakeholders have been kept informed on the detail of the turnaround strategy, implementation timeframe and financial objectives.
The 2013 financial results presentation and the 2013 annual report both gave stakeholders a detailed picture of what had gone wrong,
what was still right and what was going to be done to correct Astrapak’s performance.
At the interim stage, a detailed progress report was provided in the financial results presentation. Similarly, a full year report
back is provided and stakeholders are invited to access this via the website and read it in conjunction with this commentary.
In summary, the Group’s strategy is to focus on core end markets and develop operations of appropriate scale with the right mix of
technologies and equipment to supply to internationally benchmarked norms and which importantly are sustainable into the future.
The first year of the plan has been well executed in the following key areas:
Identifying core markets and contracting key customers
Closing and selling off certain underperforming operations
Exiting unprofitable work
Selling off non-core properties to raise cash
Finalising the East Rand insurance settlement and conserving the cash as well as managing working capital
Consolidation of plant and equipment – supported by investment where required - to create operations with modern efficient equipment
Implementing a Code of Conduct and driving performance management
Improving risk management and health and safety standards
Changing people, structures and culture.
This has released cash, set the platform for the future and given the Group time to execute on the rest of the strategy, but has had the
implication of adding significant costs in the short to medium term.
In addition to the actions mentioned above, other strategic options are being considered and stakeholders will continue to be appraised as
and when appropriate. Nevertheless, the big changes are now behind the group. A new operational and leadership structure is in place, the
asset base and IT systems are modern and effective and Astrapak holds leading marketing positions in its chosen markets. The financial
position is sound. Despite the rationalisation, Astrapak retains a national presence with a capability to supply to internationally
benchmarked norms for multinational customers.
An important challenge has been to retain the focus on growth, business improvement and earning customer confidence whilst simultaneously
executing on the strategy.
Necessary qualitative improvements have been made that encapsulate our philosophy of charting a new course and are a prerequisite to ensuring
we achieve our optimal return objectives within five financial years. There is more to be done to reach the level of professionalism and
efficiency we aspire to. The total Group staff complement has been reduced with every layer of the organisation and every business unit
affected. Renewal has also required investment in attracting key skills.
The financial results in 2014 include a number of material exceptional and non-recurring losses with insurance proceeds and profit on sale
of a property, in particular, skewing comparison. From a statutory accounting point of view positive headline earnings adjustments to attributable
income only reflect part of the total amount in exceptional and non-recurring items. Significant expense items were incurred this past financial
year as part of the turnaround plan. EBITDA, operating profit and earnings reported are thus understated in relation to what the Board would
view as a normalised continuing level of performance. The financial benefits of actions taken will begin to show during the 2015 financial year,
as previously communicated by management.
Trading review
Efforts to improve the competitive position of key portfolio companies has resulted in growth in volume on a comparable basis, with the core
Rigids segment growing volume by 6%. Polymer is by far the largest item in cost of sales and is influenced by oil prices and the exchange rate,
both of which are outside customer and convertor control. The South African rand averaged R9.99 to the US dollar for the year versus R8.38 in
the prior year, a 19% weakening. The focus on pricing and procurement coordination has mitigated the effect of these input price increases in
the year and is expected to yield further benefits in years to come.
Multi-national tendering and international benchmarking are the norm with particular key accounts and Astrapak is embracing these procurement
preferences and rising to the competitive challenge. Management makes 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
benefitting from this.
Astrapak was also recognised by the Institute of Packing in the 2013 Gold Pack Awards. Group companies secured a number of gold medals and
citations, a Judges’ Special Mention for Best Export Pack Fit-for-Purpose in the perishable food category and in particular the Gold Pack Trophy
for the Robertson’s Spice Cap of which the brand owner is valued customer Unilever.
Astrapak Rigids total revenue exceeded R2 billion for the first time. Excluding intergroup revenue of R153 million net revenue increased by 17% to
R1,9 billion.
The Moulding division, the largest within Astrapak Rigids, produced an especially strong result at the revenue line. The result benefitted from
the rationalisation of the Cinqplast-Plastop Denver site in Gauteng with injection moulding equipment consolidated on one site at JJ Precision
in Kwa-Zulu Natal. Long term supply contracts are being achieved within the Mouldings customer base that provide certainty and create alignment
between supplier and customer.
The PET division continued to struggle in an industry segment characterised by excess capacity and increasingly difficult market dynamics.
The extent of Astrapak’s exposure to this category is being reviewed.
The Forming division is benefitting from the strategic review that has yielded opportunities for optimising throughput via a clear focus on two
key market segments within FMCG.
Astrapak Flexibles revenue has declined in line with the strategy to consolidate product range and footprint. Flexibles revenue on a continuing
basis and net of intergroup revenue of R36,4 million declined by 24% to R640,5 million.
With the insurance claims process for the disruptive fire at East Rand Plastics finalised, work began in the second half of the financial year on
re-positioning Astrapak Flexibles in line with the new group structure and strategy. As East Rand Plastics accounted for almost half of Astrapak
Flexibles turnover a successful resolution of the insurance claim was necessary before a proper optimisation plan could be executed. The plan is
for Astrapak Flexibles to be a smaller but more profitable unit than in the past. The structural aspects of the plan were completed during
May 2014 and management is now working toward optimising returns on the revised asset base.
Financial review
Group Revenue from continuing operations increased by 3% to R2,53 billion. Polymer tonnage consumed in production declined by 11.0%
to 72 954 tons, entirely as a result of the downsizing of the Flexible division. Favourable pricing, procurement and customer relationship
strategies yielded a positive pricing outcome in an inflationary raw material environment.
Gross profit from continuing operations decreased 9.3% to R514,1 million with the main contributors being the increased cost of workings and
loss of profits at East Rand Plastics, a write-off at Barrier Films, headcount reductions and other essential business clean-up costs.
Increased costs and loss of profits at East Rand Plastics was to an extent reimbursed by the insurers, but the reimbursement is
reflected as other items of income and expenditure.
Totalling R 83.9m, the negative impact of these items on the gross profit is material in relation to the result for 2014.
To this point, there were a number of insurance related and restructuring items that negatively impacted the overall result. In
addition to the afore-mentioned R 83.9m, a further R 51.1m in exceptional items, consisting of asset impairments and an insurance
estimate adjustment, and additional restructuring and headcount reduction costs of R 25.9m were expensed. These costs are aligned
with the objectives of the recovery plan.
The Group has managed its cost base well in an inflationary environment with selling, administration and distribution costs
increasing by only 2.2% to R 511.9m. There is scope for a reduction in this cost base as the operational performance starts improving.
Consequently, profit before interest, tax, depreciation and amortization from continuing operations of R145,6 million decreased
by 42,5% with the margin declining to 5.8% from 10.3%. The depreciation charge of R104,6 million is 10% lower.
Profit from continuing operations before exceptional items decreased by 70.1% to R40,9 million. Net finance costs of R32,8 million
decreased by 10%.
This equates to a PBITDA interest cover ratio of 4.4 times.
An after tax loss of R28,3 million was recorded by the discontinued operations as represented by Packaging Consultants. Packaging
Consultants was discontinued during the first half and the premises disposed of to a third party. The productive asset base
and important skills were distributed within the Astrapak Flexibles segment as part of the optimisation plan.
Total loss for continuing and discontinued operations is R81,7 million, equating to 67,5 cents per share of which 44,1 cents
is attributable to continuing operations and 23,4 cents to the discontinued operations.
The headline loss from continuing operations attributable to ordinary shareholders is R14,6 million, equating to 12,1 cents
per share. In the prior year headline earnings from continuing operations was R30,7 million, equating to 25,4 cents per share.
Capital expenditure of R209 million is attributable to a R 33.4m carry forward of investment projects from the prior year,
a R 16.3m investment into the Flexible restructure and a consideration of R 13.7m paid for a strategic asset base in East
London. The remainder of the capital expenditure represented a few significant items that align fully with group strategies.
Investment in plant and equipment is anticipated to be in line with depreciation in future.
Net debt reduced from R522,1 million as at 28 February 2013 to R342,6 million as at 28 February 2014, a decline of R179,5 million.
The debt to equity ratio reduced from 41.9% to 29.6%.
A provision for insurance proceeds in the amount of R295,4 million was previously raised with final settlement in the amount
R272,1 million, with no restrictions on the utilisation of these funds. But by downsizing rather than re-investing in the
Flexible Division the funds have been better preserved and deployed.
Net cash inflows from operating activities at R359,4 million were distorted by insurance proceeds. In the prior year the
provision for insurance proceeds was reflected within accounts receivable. The major components of working capital, namely stock,
debtors and creditors, have been carefully managed and compare favourably with the prior year.
The business of Alex White & Co was disposed of as a going concern to Tadbik Pack SA (Pty) Limited (“Tadbik”) on the basis of a
vendor loan to Tadbik in the amount of R 7.6 million. The loan, which attracts prime rate of interest, is payable in 36 equal
monthly instalments. Security is provided by the holding company of Tadbik.
In line with the rationalisation, a number of properties were successfully disposed of.
Comparative results were restated due to a reclassification of certain property leases from operational to financial leases.
The impact on the profitability of the Group is not material, but the financial position and net asset value is greatly enhanced.
Prospects
During 2014 Astrapak instituted big changes and the results reflect this. The Group is now focused on delivering superior
quality products on time and at the right price to customers. An improved financial result is budgeted for in 2015, the
final year of the turnaround phase, and the Group is on track to meet its medium term return aspirations.The above has
not been reviewed and reported on by Astrapak's external auditors. Astrapak is sincerely appreciative of the support it
is receiving from customers, suppliers and its key shareholders.
Changes to the Board
Resignations
Mr Gene Lapan resigned as Group Finance Director effective 28 February 2014.
Appointments
Mr Manley Diedloff assumed responsibility as Chief Financial Officer effective 1 March 2014 and serves in this capacity in
addition to his role as Group Managing Director.
Changes to the roles and responsibilities of directors
Mr Paul Botha resigned as a member of the audit committee effective 22 August 2013 in order to comply with King III
requirements.
Ms. Phumzile Langeni resigned as Chairman of the Remuneration Committee effective 22 August 2013.
Mr Paul Botha was appointed as Chairman of the Remuneration Committee effective 22 August 2013.
Significant changes in shareholding
Per the relevant stock exchange news service announcements, accounts under the management of both Coronation Asset
Management (Pty) Ltd and Regarding Capital Management (Pty) Ltd purchased shares from Royal Bafokeng (Pty) Ltd. On
28 February 2014 these asset managers held 28.97% and 14.30% of Astrapak respectively.
Dividend
No ordinary dividend is declared. Recommencement of dividend payments to ordinary shareholders is an important goal and
payments will be determined by reference to the retention needs of the company for maintenance and growth and in
relation to asset management.
Holders of preference shares continue to receive dividends in the normal course.
For and on behalf of the Board
Phumzile Langeni
Chairman
Robin Moore
Chief Executive
Manley Diedloff
Chief Financial Officer
Denver
13 May 2014
Summary consolidated statement of comprehensive income
(R‘000) Notes % Audited Restated
change financial year Audited
ended financial year
28 February ended
2014 28 February
20131
CONTINUING OPERATIONS
Revenue 9 3,0 2 528 694 2 454 380
Cost of sales (2 014 595) (1 887 580)
Gross profit (9,3) 514 099 566 800
Distribution and selling costs (206 216) (198 915)
Administrative and other expenses (305 705) (301 923)
Other items of income and expenditure 38 757 70 928
Profit from operations before exceptional items (70,1) 40 935 136 890
Exceptional items 10 (51 132) 115 210
(Loss)/profit from operations 11 (104,0) (10 197) 252 100
Investment income 16 020 8 087
Finance costs (48 759) (44 346)
(Loss)/profit before taxation (119,9) (42 936) 215 841
Taxation benefit/(expense) 12 365 (44 863)
(Loss)/profit for the year from continuing operations (117,9) (30 571) 170 978
DISCONTINUED OPERATIONS
Loss for the year from discontinued operations 12 (29,9) (28 346) (21 829)
(Loss)/profit for the year (139,5) (58 917) 149 149
Other comprehensive (loss)/ income (14 734) 162 030
Total comprehensive (loss)/income for the year (73 651) 311 179
Attributable to:
Ordinary shareholders of the parent (133,7) (96 393) 286 059
- (Loss)/profit for the period from continuing operations (53 313) 145 858
(Loss)/profit for the period from continuing operations
before exceptional items (2 181) 30 648
Exceptional items (51 132) 115 210
- Loss for the period from discontinued operations (28 346) (21 829)
- Revaluation of land and buildings (net of tax) (14 734) 162 030
Preference shareholders of the parent 11 362 11 369
Non-controlling interest 11 380 13 751
Total comprehensive (loss)/income for the year (73 651) 311 179
(Loss)/earnings per ordinary share (cents) 13 (165,98) (67,5) 102,6
- continuing operations (136,5) (44,1) 120,7
- discontinued operations (29,3) (23,4) (18,1)
Fully diluted (loss)/earnings per ordinary share (cents) 13 (165,7) (67,4) 102,6
- continuing operations (136,5) (44,0) 120,7
- discontinued operations (29,3) (23,4) (18,1)
Preference dividend paid and accrued 11 362 11 369
Preference dividend per preference share (cents) 757,47 757,93
1 Restated for classification of Packaging Consultants as a
discontinued operation and prior year restatement. Refer to note 2.
Reconciliation of headline earnings
(R‘000) Notes % Audited Audited
change financial financial
year ended year ended
28 February 28 February
2014 2013
(Loss)/profit for the year attributable to ordinary shareholders (165,8) (81 659) 124 029
- continuing operations (53 313) 145 858
- discontinued operations (28 346) (21 829)
Headline (loss)/earnings adjustments
- Loss on exercise of options - 265
- Reversal of insurance proceeds 23 333 -
- Impairment of property, plant and equipment 40 532 153 263
- Profit on disposal of property, plant and equipment (11 208) (291 604)
- Total tax effect of adjustments (10 928) 26 913
- Total non-controlling interest share of adjustments - (765)
Headline (loss)/earnings attributable to ordinary shareholders (430,0) (39 930) 12 101
- continuing operations (147,5) (14 593) 30 701
- discontinued operations (36,2) (25 337) (18 600)
Headline (loss)/earnings per ordinary share (cents) 13 (429,5) (33,0) 10,0
- continuing operations (147,5) (12,1) 25,4
- discontinued operations (36,0) (20,9) (15,4)
Fully diluted headline (loss)/earnings per ordinary share (cents) 13 (428,9) (32,9) 10,0
- continuing operations (147,4) (12,0) 25,4
- discontinued operations (35,7) (20,9) (15,4)
Summary consolidated statement of financial position
(R‘000) Notes % Audited Restated Restated
change financial year Audited Audited
ended financial year financial year
28 February ended ended
2014 28 February 29 February
2013 2012
Assets
Non-current assets 2,0 1 446 435 1 417 871 1 401 392
Property, plant and equipment 3 1 225 125 1 214 221 1 192 606
Goodwill 117 118 117 118 117 118
Deferred taxation assets 46 868 36 227 44 010
Investment and loans 4 57 324 50 305 47 658
Current assets (23,8) 819 191 1 074 612 852 079
Inventories 5 289 491 281 515 309 024
Accounts receivable 460 211 752 894 515 277
Taxation receivable 6 820 12 976 27 778
Cash and cash equivalents 6 62 669 27 227 -
Assets classified as held-for-sale 7 32 098 52 974 7 075
Total assets (9,7) 2 297 724 2 545 457 2 260 546
Equity and liabilities
Total equity (7,3) 1 214 748 1 309 914 1 009 431
Equity attributable to ordinary shareholders
of the parent 1 014 517 1 104 233 814 239
Preference share capital and share premium 142 590 142 590 142 590
Non-controlling interest 57 641 63 091 52 602
Non-current liabilities (19,0) 452 721 559 138 563 948
Long-term interest-bearing debt 260 901 332 243 382 140
Long-term financial liabilities 904 5 441 4 937
Deferred taxation liabilities 190 916 221 454 176 871
Current liabilities (3,7) 617 284 640 719 687 167
Trade and other payables 464 080 411 085 479 360
Shareholders for preference dividends 4 022 5 041 4 420
Short-term interest-bearing debt 143 981 145 397 184 655
Taxation payable 4 812 7 530 15 602
Bank overdrafts 6 389 71 666 3 130
Liabilities associated with assets held-for-sale 7 12 971 35 686 -
Total equity and liabilities (9,7) 2 297 724 2 545 457 2 260 546
Summary consolidated statement of changes in equity
(R‘000) Notes Audited Restated Restated
financial year Audited Audited
ended financial year financial year
28 February ended ended
2014 28 February 29 February
2013 2012
Opening balance 1 309 914 1 009 431 1 070 784
Comprising:
Ordinary share capital and premium 199 502 199 502 199 502
Retained income 875 066 751 037 824 518
Capital reserve 8 20 523 18 757 16 707
Non-controlling put options (5 441) (4 937) (1 671)
Revaluation reserve 162 030 - -
Treasury shares (147 447) (150 120) (150 733)
Equity attributable to ordinary shareholders of the parent 1 104 233 814 239 888 323
Preference share capital and premium 142 590 142 590 142 590
Non-controlling interest 63 091 52 602 39 871
Movements:
(Loss)/profit for the year (58 917) 149 149 (19 558)
Preference dividends paid (11 362) (11 369) (10 830)
Ordinary dividends paid to non-controlling interest - (10 500) (31 863)
Acquisition of non-controlling interest (36 000) - -
Contributions made by non-controlling interest (2 521) 7 238 1 501
Reduction in treasury shares due to exercise of options - 2 673 623
Incentive scheme reversals - - (10)
Adjustment of fair value of put options 4 537 (504) (3 266)
Capital gains taxation on disposal of revalued properties (5 319) - -
Revaluation reserve 13 959 162 030 -
Share-based payment expense for the year 457 1 766 2 050
Closing balance 1 214 748 1 309 914 1 009 431
Comprising:
Ordinary share capital and premium 199 502 199 502 199 502
Retained income 795 090 875 066 751 037
Capital reserve 8 20 980 20 523 18 757
Non-controlling put options (904) (5 441) (4 937)
Revaluation reserve 147 296 162 030 -
Treasury shares (147 447) (147 447) (150 120)
Equity attributable to ordinary shareholders of the parent 1 014 517 1 104 233 814 239
Preference share capital and premium 142 590 142 590 142 590
Non-controlling interest 57 641 63 091 52 602
Total equity 1 214 748 1 309 914 1 009 431
Summary consolidated statement of cash flows
(R‘000) Notes % Audited Restated
change financial Audited
year ended financial
28 February year ended
2014 28 February
2013
Cash generated from operations before working capital changes (81,9) 85 511 472 044
Increase/(decrease) in working capital 338 887 (280 457)
Net interest and taxation paid (52 635) (54 343)
Net cash inflow from activities before distributions to shareholders 170,9 371 763 137 244
Dividend distribution to all shareholders (12 381) (21 248)
Net cash inflow from operating activities 209,8 359 382 115 996
Capital expenditure (208 950) (149 232)
Net movement of investments, subsidiaries and non-controlling interests (42 441) 13 036
Proceeds on disposal of property, plant and equipment 79 602 43 476
Net cash outflow from investing activities (171 789) (92 720)
Net cash outflow from financing activities (80 874) (64 585)
Net increase/(decrease) in cash and cash equivalents 106 719 (41 309)
Net cash and cash equivalents at the beginning of the year (44 439) (3 130)
Net cash and cash equivalents at the end of the year 6 240,1 62 280 (44 439)
Summary consolidated segmental analysis
(R‘000) Rigids Flexibles Total Dis- Total
continuing continued Group
operations operations
Revenue for segment 2014 2 041 318 676 922 2 718 240 99 425 2 817 665
2013 1 758 274 902 707 2 660 981 192 270 2 853 251
Transactions with other operating segments
of the Group 2014 (153 161) (36 385) (189 546) (7 759) (197 305)
2013 (142 789) (63 812) (206 601) (10 767) (217 368)
Revenue for external customers 2014 1 888 157 640 537 2 528 694 91 666 2 620 360
2013 1 615 485 838 895 2 454 380 181 503 2 635 883
Profit from operations before exceptional items 2014 61 585 (20 650) 40 935 (23 014) 17 921
2013 113 837 23 053 136 890 (21 105) 115 785
Total assets 2014 1 617 357 680 367 2 297 724 - 2 297 724
2013 1 532 045 1 013 412 2 545 457 - 2 545 457
Total liabilities 2014 663 277 419 699 1 082 976 - 1 082 976
2013 626 352 609 245 1 235 597 - 1 235 597
Capex 2014 174 106 34 844 208 950 - 208 950
2013 118 556 30 676 149 232 - 149 232
Depreciation 2014 82 522 22 099 104 621 3 137 107 758
2013 79 301 36 949 116 250 8 583 124 833
Supplementary information
Audited Restated Audited
financial year financial year
ended ended
28 February 28 February
2014 2013
Number of ordinary shares in issue ('000) 135 131 135 131
Weighted average number of ordinary shares in issue ('000) 121 016 120 836
Fully diluted weighted average number of ordinary shares in issue ('000) 121 226 120 837
Number of preference shares in issue ('000) 1 500 1 500
Net asset value per share (cents) 956,2 1 031,8
Net tangible asset value per share (cents) 859 935
Closing share price (cents) 700 725
Market capitalisation (R million) 945,92 979,70
Net interest-bearing debt as a percentage of equity (%) 29,6 41,9
Net debt 342 602 522 079
Long-term interest-bearing debt 260 901 332 243
Short-term interest-bearing debt 143 981 145 397
Cash and cash equivalent (62 669) (27 227)
Bank overdraft 389 71 666
Interest cover (before exceptional items) 1,3 3,8
Net working capital days 41,2 48,7
Contingent liabilities 6 971 7 635
Number of employees 3 132 3 975
- continuing operations 3 132 3 728
- discontinued operations - 247
Earnings before interest, taxation, depreciation and amortisation
("EBITDA") - continuing operations 145 556 253 140
Profit from operations (before exceptional items) 40 935 136 890
Depreciation 104 621 116 250
Notes
1. Basis of preparation and accounting policies
These summary consolidated annual financial statements for the year ended 28 February 2014 have been prepared in
accordance with the framework concepts and the measurement and recognition requirements of International Financial
Reporting Standards (“IFRS”), the SAICA Financial Reporting Guide as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by Financial Reporting Standards Council and the requirements of the Companies Act
and the information required by IAS 34: Interim Financial Reporting. This provisional report was compiled under the supervision
of Manley Diedloff, Group Managing Director and Chief Financial Officer. The accounting policies used in the preparation
of these results are in accordance with IFRS and are consistent in all material respects with those used in the audited
annual financial statements for the year ended 28 February 2013. This provisional report is extracted from audited information,
but is not itself audited. The directors take full responsibility for the preparation of the report and that the financial
information has been correctly extracted from the underlying financial statements.
The auditors, Deloitte & Touche, have issued an unmodified audit opinion on the complete consolidated and separate financial
statements and a copy of that report is available for inspection at the Company's registered office.
Standards and interpretations that were effective in the year were adopted. These did not have a significant impact in the
financial statements.
2. Comparative figures
Discontinued operations
The comparative figures have been restated due to the classification of Packaging Consultants (a division of Astrapak
Manufacturing Holdings (Proprietary) Limited) as a discontinued operation.
Prior period restatements
Certain leases, which related to properties occupied by Group companies, has been reclassified from operational to
financial leases due to options to acquire issued to the holding company. Although the impact on the Statement of
Comprehensive Income is not material, the impact on the Statement of Financial Position and the Net Asset Value of the
Group is material as market value of these respective properties is in excess of the option exercise value, therefore
enhancing both the financial position and net asset value of the Group. The prior year financial statements have
accordingly been restated as follows to fully reflect the impact of this reclassification:
R’000 28 February
2013
Impact of error
Impact on profit for the year
Decrease in cost of sales 12 009
Increase in administration and other operating expenses (1 597)
Increase in finance costs (8 953)
Increase in taxation (884)
Increase in profit for the year 575
Impact on other comprehensive income
Increase in other comprehensive income 66 258
28 February 2013 28 February 2012
R’000 Impact of error As previously Impact of error As previously
reported reported
Statement of financial position impact
Property, plant and equipment 109 500 1 104 721 52 437 1 140 169
Accounts receivable 8 476 744 418 10 025 505 202
Assets classified as held-for-sale 22 800 30 174 - 7 075
Retained income (10 609) 885 675 (11 184) 762 221
Revaluation reserve 66 258 95 772 - -
Deferred taxation liabilities 20 278 201 177 4 094 172 777
Long-term interest-bearing debt 45 349 286 894 64 850 317 290
Short-term interest-bearing debt 5 732 139 665 4 752 179 903
Liabilties associated with assets
held-for-sale 13 769 21 917 - -
28 February 2013
R’000 Impact of error As previously
reported
Statement of cash flows impact
Net cash inflow from operating activities 4 739 111 257
Net cash outflow from investing activities - (92 720)
Net cash outflow from financing activities (4 739) (59 846)
3. (R‘000) Audited Audited
financial year financial year
ended ended
28 February 28 February
2014 2013
Property, plant and equipment
Opening net carrying amount 1 214 221 1 192 606
Additions 208 950 149 233
Classified as assets held-for-sale (2 300) (45 756)
Revaluation of properties 17 183 199 312
Disposals (64 640) (11 732)
Impairment (40 531) (144 608)
Depreciation (107 758) (124 833)
Closing net carrying amount 1 225 125 1 214 221
Capital expenditure for the year 208 950 149 232
Capital commitments
- contracted not spent 15 094 14 409
- authorised not contracted 1 795 19 254
4. Loans and investments
Vendor loan to Afripack Consumer Flexibles (Pty) Ltd in terms of Flexibles
disposal transaction 50 881 50 293
Vendor loan to Tadbik Pack SA ( Pty) Ltd on disposal of Alex White & Co-operation 6 431 -
Unlisted investments 12 12
Loans and investments at end of the year 57 324 50 305
5. Inventories
Inventories amounting to R51 479 (2013: R38 300) are carried at net realisable value
6. Cash and cash equivalents
Cash and cash equivalents 62 669 27 227
Bank overdrafts (389) (71 666)
Net cash and cash equivalents at the end of the year 62 280 (44 439)
7. Assets held-for-sale and liabilities relating to assets held for sale
Assets held-for-sale and liabilities held-for-sale relate to assets and
liabilities of Astrapak Property Holdings Proprietary Limited
Assets held-for-sale/sold consists of the following:
Opening balance as at the beginning of the year 52 974 7 075
Inventory - 10 069
Trade and other receivables - 2 720
Cash and cash equivalents - 9
Assets previously held-for-sale disposed of (23 176) (4 000)
Impairment of plant and equipment previously classified as held-for sale - (8 655)
Property, plant and equipment classified as held-for sale 2 300 45 756
Assets held-for-sale at the end of the year 32 098 52 974
Liabilities relating to assets held-for-sale/sold consists of the following:
Opening balance as at the beginning of the year 35 686 -
Long-term loans 12 971 21 882
Trade creditors - 10 807
Bank overdrafts - 2 997
Liabilities previously classified as held-for-sale disposed or transferred (21 882)
Liabilities previously classified as held-for-sale settled (13 804) -
Liabilities relating to assets held-for-sale at the end of the year 12 971 35 686
8. Capital reserve
The capital reserve relates to employee share options valued using the
Black Scholes method and the cash financed stock plan.
Included in administrative and other expenses is IFRS 2 - “Share Based
Payments” charges of R0,45 million (2013: R1,8 million)
9. Revenue
Revenue for the Group 2 718 240 2 660 981
Transactions with other entities within the Group (189 546) (206 601)
Revenue for external customers 2 528 694 2 454 380
Volume (in '000 tons) 72 954 81 952
10. Exceptional items
Insurance (reversal)/income relating to property, plant and equipment destroyed
in fire at East Rand Plastics (23 333) 263 860
Impairment of property, plant and equipment relating to fire at East Rand Plastics - (56 308)
Impairment of property, plant and equipment (27 799) (92 342)
Exceptional items (51 132) 115 210
11. Profit from operations
Profit from operations for continuing operations are arrived at after taking the
following into account:
Net profit on disposal of property, plant and equipment 2 655 27 615
Depreciation 104 621 116 250
IFRS 2 share-based payment expenses 457 1 766
12. Loss for the year from discontinued operations
The Group classified Packaging Consultants a division of Astrapak Manufacturing Holdings
Proprietary Limited, as discontinued operations as part of its strategy to rationalise the
Flexibles division. Previous years discontinued operations relates to City packaging and
Ultrapak (both divisions of Astrapak Manufacturing Holdings Proprietary Limited
Revenue 91 666 181 503
Cost of sales (111 002) (180 520)
Gross (loss)/profit (19 336) 983
Other income 9 085 -
Distribution and selling costs (6 630) (13 708)
Administrative and other operating expenses (6 133) (8 380)
Loss from operations before exceptional items from discontinued operations (23 014) (21 105)
Exceptional items - impairment (12 732) (5 614)
Loss from operation from discontinued operations (35 746) (26 719)
Investment income 519 25
Finance costs (5 579) (4 008)
Loss before taxation from discontinued operations (40 806) (30 702)
Taxation 12 460 8 873
Loss for the period from discontinued operations (28 346) (21 829)
The net cash flows incurred by discontinued operations for the period
are represented below:
Operating cash inflow 5 575 7 941
Investing cash inflow 63 544 11 413
Financing cash outflow (75 463) (17 113)
Net (decrease)/increase in cash and cash equivalents from discontinued operations (6 344) 2 241
13. (Loss)/earnings per ordinary share and headline (loss)/earnings per ordinary share -
basic and fully diluted
(Loss)/earnings per ordinary share is calculated by dividing the (loss)/profit attributable
to ordinary shareholders of the parent by the weighted average number of shares in issue
over the period that the attributable (loss)/profit was generated.
Headline (loss)/earnings per ordinary share is calculated by dividing the headline (loss)/
earnings attributable to ordinary shareholders of the parent by the weighted average number
of shares in issue over the period that the headline (loss)/earnings were generated.
Fully diluted (loss)/earnings and headline (loss)/earnings per ordinary share is determined
by adjusting the weighted average number of shares in issue over the period to assume
conversion of all dilutive ordinary shares, being shares issued in terms of the share
incentive trust and the cash financed stock plan.
14. Subsequent events
No fact or circumstance material to the appreciation of this report has occurred between
28 February 2014 and the date of this report.
For more information on our business please go to: www.astrapak.co.za
Board of Directors: P Langeni* (Chair), R Moore (Chief Executive Officer), M Diedloff (Group Managing Director and
Chief Financial Officer), P C Botha*, C McDougall*, G Z Steffens*, G P Duda* *Non-executive
Company Secretary: S Ngwabi
Registered Office: 5 Kruger Street, Denver, 2094, PO Box 75769, Gardenview, 2047, South Africa
Tel +27 11 615 8011, Fax +27 11 615 9790
Registrar: Computershare Investor Services (Pty) Ltd, Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Sponsor: Rand Merchant Bank (a division of FirstRand Bank Limited)
OPERATING ENTITIES
Flexibles Division: Barrier Film Converters, East Rand Plastics, Knilam Packaging, Peninsula Packaging,
Plusnet/Geotex, Saflite
Rigids Division: Cinqpet, Consupaq, Hilfort, JJ Precision Plastics, Marcom Plastics, PAK 2000, Plastech,
Plastform, Plastop, Plastop (KwaZulu-Natal), Thermopac, Weener - Plastop
Date: 14/05/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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