Wrap Text
Reviewed condensed consolidated results for the year ended 30 June 2014 and dividend announcement
TRANSPACO LIMITED
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC
A leading manufacturer, recycler and distributor of plastic and paper packaging products
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2014 AND DIVIDEND ANNOUNCEMENT
TURNOVER UP 11%
NAV UP 11%
TOTAL DIVIDEND PER SHARE 93 CENTS
(FINAL DIVIDEND PER SHARE 54 CENTS)
Introduction
Transpaco maintained its consistent performance, with good turnover growth and a slight increase in headline earnings per share despite challenging trading conditions.
The group achieved turnover of R1,25 billion, attributable to a combination of volume growth and certain price increases.
Emphasis on marketing and sales strategies remain a prime focus of the group in order to maintain momentum.
Transpaco’s performance was further strengthened by controlled operating costs which increased by 6,1% year on year despite above inflation rises in energy and labour costs. Improved production and manufacturing efficiencies together with well-managed working capital resulting in minimal net interest paid of R1,0 million (June 2013: R1,0 million) assisted in achieving these results.
Margins remained under pressure from higher input costs – notably energy and raw materials resulting in a reduction in operating margin to 7,8% (June 2013: 8,3%).
Financial Results
Group operating profit increased by 5,1% to R97,8 million (June 2013: R93,1 million) on turnover of R1 247,4 million up 11,1% (June 2013: R1 123,2 million).
Transpaco’s total comprehensive income improved by 4,2 % to R69,7 million (June 2013: R66,9 million) and earnings per share (EPS) by 3,7% to 216,5 cents (June 2013: 208,9 cents).
Headline earnings grew by 1,0% to R67,3 million (June 2013: R66,7 million) and headline earnings per share (HEPS) by 0,5% to 209,2 cents (June 2013: 208,2 cents).
The weighted average number of shares in issue in calculating HEPS and EPS is 32 164 000 compared to 32 012 000 in the previous year.
Diluted HEPS increased 0,9% to 205,5 cents (June 2013: 203,7 cents).
Cash generated from operations increased to R121,0 million (June 2013: R100,1 million). Cash and cash equivalents at the end of the year were R91,3 million (June 2013: R83,7 million).
Transpaco’s net interest-bearing debt-to-equity position remains cash positive with interest cover improving to
95,6 times (June 2013: 90,5 times).
Net asset value per share increased by 10,8% to 1 249 cents (June 2013: 1 127 cents).
Prospects
The tough trading environment continues to present challenges for Transpaco. Management will remain focused on sound business and financial fundamentals in an effort to achieve Transpaco’s organic growth ambitions.
Expansion opportunities including acquisitions are being pursued.
A national industry strike which affected several Transpaco facilities and many customers of Transpaco may impact trading for the first two months of the 2015 financial year.
Transformation
Transpaco’s fifth independent accreditation process in respect of B-BBEE reflected an improvement in level of contribution. However, the group retained its status as a Level 4 value added contributor due to the movement in targets. Consequently Transpaco customers can attribute 125% of their purchases from Transpaco to preferential procurement.
Dividend
The board has declared a final gross cash dividend out of income reserves of 54,0 cents per share resulting in total dividends of 93,0 cents per share for the year ended 30 June 2014 (June 2013: 90,0 cents per share), an increase of 3,3%. No STC credits have been utilised. After applying the dividend withholding tax of 15% a net final dividend of 45,90000 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 33 177 482 ordinary shares. The Income Tax reference number is 9975/112/71/6.
The salient dates for the dividend are as follows:
Last date to trade shares cum dividend Friday, 12 September 2014
Shares trade ex dividend Monday, 15 September 2014
Record date Friday, 19 September 2014
Payment date Monday, 22 September 2014
Share certificates may not be dematerialised or rematerialised between Monday, 15 September 2014 and Friday, 19 September 2014, 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) issued by the International Standards Board (IASB), its interpretations issued by the IFRS Interpretations Committee, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, minimum presentation and disclosure requirements set out in IAS 34 – Interim Financial Reporting, 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.
The condensed consolidated results do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the group’s annual financial statements for the year ended 30 June 2014.
Review of Independent Auditors
The group’s auditors Ernst & Young Inc. have reviewed the condensed consolidated financial information for the year. The unmodified 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. Any reference to future financial performance included in this announcement has not been reviewed or reported on by the group’s external auditors.
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 non-executive
Date 20 August 2014
Auditors Ernst & Young Incorporated
Transpaco Limited Registration number: 1951/000799/06
Share code: TPC
ISIN: ZAE000008480
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 2014 Change June 2013
Revenue 1 248 997 1 125 260
Turnover 1 247 386 11,1 1 123 204
Cost of sales (816 179) (715 749)
Profit before operating
costs and depreciation 431 207 5,8 407 455
Operating costs (300 060) (282 697)
Depreciation (33 303) (31 618)
Operating profit 97 844 5,1 93 140
Finance income 1 611 2 056
Finance costs (2 635) (3 085)
Profit before taxation 96 820 5,1 92 111
Taxation (27 169) (25 246)
Profit for the year 69 651 66 865
Other comprehensive income – –
Total comprehensive income
for the year 69 651 4,2 66 865
Weighted average number
of shares in issue ('000) 32 164 32 012
Diluted weighted average
number of shares in
issue ('000) 32 748 32 719
Earnings per share (cents) 216,5 3,7 208,9
Diluted earnings per
share (cents) 212,7 4,1 204,4
Headline earnings per
share (cents) 209,2 0,5 208,2
Diluted headline earnings
per share (cents) 205,5 0,9 203,7
Dividend per share (cents)* 93,0 3,3 90,0
Reconciliation of
headline earnings (R'000)
Basic earnings 69 651 66 865
Profit on disposal of
property,plant and equipment (2 354) (208)
Headline earnings 67 297 1,0 66 657
*Includes interim dividend of 39 cents (June 2013: 36,5 cents) and a dividend declared after the period of
54 cents (June 2013: 53,5 cents)
STATEMENT OF FINANCIAL POSITION
Reviewed Audited
12 months 12 months
R’000 June 2014 June 2013
ASSETS
Non-current assets 213 606 202 602
Property, plant
and equipment 207 163 193 901
Intangibles 482 482
Goodwill 3 204 3 204
Long-term receivables – 642
Deferred taxation 2 757 4 373
Current assets 441 404 393 393
Inventories 161 835 120 416
Trade and other
receivables 183 757 185 579
Short-term receivables 642 2 308
Taxation receivable 3 904 1 404
Cash and cash equivalents 91 266 83 686
Non-current asset
classified as held-for-sale – 885
TOTAL ASSETS 655 010 596 880
EQUITY AND LIABILITIES
Capital and reserves 402 183 360 935
Issued share capital 322 320
Share premium 11 019 11 019
Other reserve 3 856 3 358
Distributable reserve 386 986 346 238
Non-current liabilities 49 222 53 491
Interest-bearing
borrowings 21 539 32 612
Deferred incom 5 230 –
Deferred taxation 22 453 20 879
Current liabilities 203 605 182 454
Trade payables
and accruals 172 988 148 898
Provisions 19 225 17 449
Current portion of
interest-bearing
borrowings 10 632 13 244
Deferred income 689 –
Taxation payable 71 2 863
TOTAL EQUITY AND
LIABILITIES 655 010 596 880
Number of shares in
issue ('000)
Number of shares
(net of treasury shares) 32 017 31 991
Net movement in
treasury shares 180 26
Ranking number of shares 32 197 32 017
Salient features
Net asset value per
share (cents) 1 249 1 127
Operating margin % 7,8% 8,3%
Net interest-bearing
debt: equity ratio % Net cash Net cash
positive positive
Interest cover (X) 95,6 90,5
STATEMENT OF CASH FLOWS
Reviewed Audited
12 months 12 months
R’000 June 2014 June 2013
Cash flow from operating
activities
Cash generated from
operations 120 977 100 067
Dividends paid (29 919) (27 521)
Finance income 1 611 2 056
Finance costs (2 635) (3 085)
Taxation paid (29 271) (23 768)
Net cash inflow from
operating activities 60 763 47 749
Cash flow from investing
activities
Proceeds on disposal of
property, plant
and equipment 4 083 436
Expansion and replacement
of property, plant
and equipment (46 907) (40 007)
Decrease in long-term
receivables 642 2 309
Decrease/(increase) in
short-term receivables 1 666 (198)
Net cash outflow from
investing activities (40 516) (37 460)
Cash flow from financing
activities
Movement in treasury
shares 1 018 148
(Decrease)/increase in
interest-bearing
borrowings (11 073) 7 644
Decrease in current
portion of
interest-bearing
borrowings (2 612) (4 947)
Net cash (outflow)/inflow
from financing activities (12 667) 2 845
Net movement in cash for
the year 7 580 13 134
Cash and cash equivalents
at the beginning of the year 83 686 70 552
Cash and cash equivalents
at the end of the year 91 266 83 686
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Distributable
R'000 Capital Premium Reserves Reserve Total
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
Profit for the year – – – 69 651 69 651
Other comprehensive income – – – – –
Total comprehensive income – – – 69 651 69 651
Share-based payments – – 498 – 498
Dividend paid – – – (29 919) (29 919)
Movement in treasury shares 2 – – 1 016 1 018
Balance at 30 June 2014 322 11 019 3 856 386 986 402 183
CAPITAL COMMITMENTS
Reviewed Audited
12 months 12 months
R’000 June 2014 June 2013
Capital expenditure
authorised
and contracted
Property, plant
and equipment 10 059 9 347
SEGMENTAL ANALYSIS
Paper Properties
Plastic and Board and Group Total
R'000 Products Products Services Group
Turnover – 2014 818 215 429 171 – 1 247 386
Turnover to customers 879 406 452 993 – 1 332 399
Less turnover to internal
customers 61 191 23 822 – 85 013
Turnover – 2013 689 172 434 032 – 1 123 204
Turnover to customers 738 518 450 872 – 1 189 390
Less turnover to internal
customers 49 346 16 840 – 66 186
Operating profit – 2014 46 113 46 121 5 610 97 844
Operating profit – 2013 36 028 53 360 3 752 93 140
Profit before tax – 2014 45 125 45 229 6 466 96 820
Profit before tax – 2013 34 557 52 943 4 611 92 111
Capital expenditure – 2014 41 645 4 715 547 46 907
Capital expenditure – 2013 15 861 22 838 1 308 40 007
Assets – 2014 396 058 165 093 93 859 655 010
Assets – 2013 334 186 165 794 96 900 596 880
Liabilities – 2014 154 979 82 317 15 531 252 827
Liabilities – 2013 133 908 76 209 25 828 235 945
Date: 20/08/2014 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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