ASTRAPAK LIMITED - Operational update and trading statement for the financial year ended 28 February 2015

Operational update and trading statement for the financial year ended 28 February 2015

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”)


Operational update and trading statement for the financial year ended 28 February 2015.

Operational update

Astrapak has concluded the financial year ended 28 February 2015 as a considerably restructured
business relative to the situation two years ago. This restructuring has been necessary to eradicate
underperformance and reshape the Group for new realities and customer expectations.

These restructuring initiatives come with major non-recurring costs, some of which are not excluded
for headline earnings calculation purposes. Astrapak has also engaged the services of specialists
where necessary to assist with this process of change management. These costs are gradually being
eliminated as the strategic objectives are met. The Group will therefore have an extensively right-
sized overhead structure going forward and this, together with the productivity uplift from the
restructuring, will reflect positively in reported results in future.

On 25 March 2015, shareholders were advised that Astrapak has entered into an agreement to
dispose of Cinqpet to Boxmore Plastics SA (Pty) Limited, subject to the conditions precedent as
stated in the related announcement released on the Stock Exchange News Service (“SENS”).
Shareholders were advised on 18 June 2014 that the business of Hilfort Plastics Cape Town had
been disposed of and then further advised on 3 December 2014 that the operating entities of Hilfort
Plastics Bloemfontein and Hilfort Plastics Upington had been disposed of in one indivisible
transaction. The disposal of Cinqpet will conclude the Group’s exit from non-core PET operations.

On 31 March 2015, shareholders were further advised that Astrapak has entered into an agreement
to dispose of the business of East Rand Plastics, and the property it occupies, to Transpaco Limited.
This transaction is subject to the conditions precedent as stated in the related SENS announcement.

Shareholders are reminded that, per the announcements released on SENS on 18 February 2015, 25
March 2015 and 31 March 2015, the Group remains under cautionary with respect to various other
negotiations. These negotiations are in alignment with the rationalisation plan and strategic objectives
to be a leading supplier of plastic packaging in chosen markets and technologies to key accounts.
Internal reorganisation and a streamlining of the manufacturing footprint is being accompanied by
targeted disposals of assets. As a consequence of this, certain operations have been reclassified as
discontinuing operations and assets held for sale and will be reported as such.

Proceeds from asset disposals have been deployed effectively. The operations are net cash positive
over and above disposal proceeds. A decrease in funds applied to working capital has resulted in the
Group exceeding its internal benchmark.

A good balance has been struck between doing what is right to ensure operational excellence whilst
at the same time ensuring that we have a solid financial platform. The restructuring has been
internally funded and utilisation of credit is well below available facilities and the internal benchmark.

Markets served remain soft and both packaging competitors and packaging customers are finding
trading conditions difficult.

In addition, strikes and the effects of recurring electricity outages have been costly features of the
past financial year. Executive management continues to engage proactively in support of key
accounts and Astrapak is well positioned with key customers for growth and predictability of
production.
The Group is focused on the markets of personal care and toiletry, household goods, food products
(for example dairy), automotive lubricants, and catering. Markets and technologies that have been
identified as non-core have already been exited or are in the process of being exited.

Management remain confident of meeting optimal return objectives by the 2018 financial year.



Trading statement

Astrapak is currently finalising its results for the financial year ended 28 February 2015.

Based on the latest available trading information, shareholders are advised that revenue from
continuing operations for the year ended 28 February 2015 is expected to increase by 7,8% to
R1 389,6 million compared to the restated continuing revenue of R1 288,4 million for the year ended
28 February 2014.

In terms of the Listings Requirements of the JSE Limited, companies are required to provide guidance
to the market as soon as they are satisfied that a reasonable degree of certainty exists that the
financial results for the current reporting period will differ by at least 20% from the results of the
previous corresponding reporting period.

The directors therefore anticipate that earnings per share (“EPS”) for the year ended 28 February
2015 (“the period”) will reflect a loss in the range of 112 cents and 115 cents compared to a restated
loss per share of 67,5 cents for the year ended 28 February 2014, resulting in a decline of EPS of
between 66% to 70% compared to the prior year. The expected loss is predominantly attributable to a
number of exceptional and non-recurring losses in the period and to losses from discontinued
operations. The directors anticipate that earnings per share from continuing operations will reflect a
loss in the range of 21 cents and 23 cents compared to a restated loss of 14,3 cents on a restated
comparable basis for the year ended 28 February 2014, resulting in a decline of EPS from continuing
operations of between 47% to 61% compared to the prior year.

The directors further anticipate that headline earnings per share (“HEPS”) for the year ended 28
February 2015 will reflect a loss of between 68 cents and 72 cents compared to a restated headline
loss per share of 33 cents for the twelve months ended 28 February 2014, resulting in a decline of
HEPS of between 106% to 118% compared to the prior year. The expected headline loss is
predominantly attributable to a number of exceptional and non-recurring losses in the period and to
losses from discontinued operations. The directors anticipate that headline earnings per share from
continuing operations, that don’t exclude all exceptional and non-recurring losses, will reflect a loss of
between 2 cents and 3 cents compared to a restated loss of 9,7 cents for the twelve months ended 28
February 2014, resulting in a decrease of the HEPS loss from continuing operations of between 69%
to 80% compared to the prior year.

Astrapak’s financial results for the year ended 28 February 2015 are scheduled to be released on
SENS on Wednesday 15 April 2015.

The financial information on which this trading statement is based has not been reviewed or reported
on by the Company’s external auditors and represents the best estimates of management.




Denver

2 April 2015

Sponsor:

RAND MERCHANT BANK (A division of First Rand Bank Limited)

Date: 02/04/2015 03:59:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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