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Provisional audited consolidated financial statements for the year ended 28 February 2015
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”)
Provisional audited consolidated financial statements for the year ended 28 February 2015
Charting a new course
Commentary
Key financial features of the year
• A considerably restructured business relative to the position in 2012
• Continuing operations comprise nine focused manufacturing entities versus 23 previously
• Proceeds from sale of non-core businesses and the disposal of assets yielded R148 million during the year
• Proceeds of R149 million from the post-year-end sale of businesses, as advised on SENS, to be realised in the 2016
financial year
• Continuing revenue increases by 7,8% to R1,4 billion
• Selling prices up 5% as strategic initiatives to move up the value chain bear fruit
• Total costs incurred in respect of clean-up and corrective actions estimated to be approximately R50 million
• Profit from continuing operations before exceptional items increases by 49% to R61,5 million
• Loss per share of 114,4 cents compared to 67,5 cents
• Continuing headline loss per share reduces by 78,4% to 2,1 cents
• Group net debt to equity at 30% with continuing operations net debt to equity at 19%
• The Group is well positioned to achieve returns in line with international benchmarks
Strategic perspective to the results
The year ended 28 February 2015 concludes the first phase of the turnaround of Astrapak. This has been achieved within
the targeted two financial years under new executive leadership. There is still some work to be done as we finalise the
exit of non-core businesses and steadily eliminate expenses deliberately incurred during this recovery. The balance
sheet will further be bolstered in the 2016 financial year by cash received from the sale of non-core businesses.
This has been a very difficult process, with the past year in particular having had the added external challenges of
electricity supply and strikes, both of which caused the Group to incur irrecoverable losses.
We are exiting businesses that do not fit with our technology focus and long-term return criteria and continue to
bring in the correct human capital. At the same time, we have not lost sight of building for the future and earning the
confidence of customers, funders, suppliers and employees.
During the past two years we have fundamentally reshaped Astrapak to become a more focused group of nine manufacturing
entities of scale, servicing key customers and utilising the moulding and forming technologies.
As a result, the old segmental distinction of rigid and flexible plastic packaging will fall away to be replaced by a
unified structure with centralised support services common for group effectiveness.
Our technology focus is deliberate and in keeping with both local and international developments and the arrival of
foreign entrants that have dramatically reshaped the competitive landscape for local converters and customers.
Astrapak’s strategy has taken account of this and our execution thereon has been correct and timely.
Our restructuring initiatives have therefore had a twofold purpose - stop or eliminate the underperformance and
reengineer to achieve operational excellence as per international manufacturing benchmarks and quality accreditations. This
aligns with certain multinational customers’ desire for longer-term partnerships and commitment for production across
geographic boundaries.
This also confirms why we have chosen to invest in the continuing asset base rather than starve the business of the
necessary capital expenditure for a short-term positive balance sheet effect and cash impact. A total of R113 million was
spent on continuing operations in the reporting period of which approximately R80 million was spent on expansion.
Astrapak continues to strive to be an internationally competitive manufacturing partner on fair and sustainable
commercial terms with local and global customers in the personal care and toiletry, household goods, food products, automotive
lubricants, and catering markets. Contracts with such customers are typically multi-year, requiring commensurate
commitment and investment in return for relative predictability. Long-term supply contracts provide Astrapak with certainty
and create alignment between supplier and customer.
To put the rightsizing in context, annual continuing operations revenue of R1,4 billion in 2015 compares with total
group revenue of R2,5 billion if discontinued operations are included and R2,6 billion on the same basis in 2014.
As a result, our customer concentration has increased but we continue to achieve a good spread of work.
Astrapak group revenue has therefore halved but with the strategic objective of earning more on less turnover
generated by fewer fixed assets and far fewer people in markets in which we hold leading positions and that can deliver
acceptable returns. In future, we are targeting returns on sales, assets and capital employed that are benchmarked to
international packaging peers, particularly those in the field of our chosen technologies.
Business rationalisation activity update
Markets and technologies that have been identified as non-core have already been or are in the process of being
exited.
The past two years has thus seen us execute sales with the objective of extracting good value on exit to suitable
purchasers who can add value to these assets and businesses.
Cash inflow from sales of businesses and assets disposed of over the past two financial years was R227 million with
R148 million realised in 2015 alone.
The statement of financial position at year-end reflected R689 million in assets held-for-sale against which there are
liabilities of R278 million.
The value we have been realising on the sale of businesses is an encouraging indicator of the potential intrinsic
future value we have in our core remaining operations to which we too are now bringing dedicated focus.
In the past financial year the disposals of Hilfort Plastics Cape Town, Hilfort Plastics Bloemfontein and Hilfort
Plastics Upington were successfully concluded. Hilfort operates in the PET category, an area deemed non-core to Astrapak in
the future. Subsequent to year-end Astrapak also announced on SENS the disposal of the business of Cinqpet. This series
of transactions completes Astrapak’s exit from the PET market.
Shareholders were also previously advised via SENS that Astrapak had entered into agreements to sell the business of
East Rand Plastics (“ERP”) and the property it occupies.
Should all conditions associated with the sale of Cinqpet and ERP be met, the cash proceeds will likely be reflected
in the accounts for the first half of the 2016 financial year. The proceeds from the Cinqpet sale are expected to be
R44,4 million and the proceeds from the ERP sales R104,7 million, including R13,2 million in long-term liabilities
associated with the fixed assets.
In line with the rationalisation programme, properties surplus to requirement have been sold in an orderly manner and
potential risks associated with onerous leases successfully mitigated.
Astrapak has also been rationalising facilities within its core operations in order to ensure optimal productivity on
fewer sites but with higher loadings.
Facilities in the Eastern Cape were streamlined in order to take on a strategically important multi-year contract with
a large international customer in the personal care market. This project is now complete as is the complementary
investment in our Consupaq operation. The associated benefits will flow from July 2015.
The restructure of our Bronkhorstspruit personal care market plant near Pretoria was announced during February and we
are in discussions with stakeholders as to the future of this business. We plan for a significant portion of the asset
base to be transferred to our existing facilities in KwaZulu-Natal, thus further increasing the capacity, scale and
expertise of these operations. Similarly, certain equipment was relocated from our Denver facility, which was closed in
February, to our Consupaq and PAK 2000 operations. These transfers will help to increase future earnings from these
operations while reducing the need for significant
reinvestment.
Closure and restructuring costs and provisions have been incurred in this regard and have negatively affected the
result for the year.
Operational review
We indicated at the half-year that we anticipated markets served to remain soft and negatively impact operational
performance for the year ended 28 February 2015. This has indeed been the situation with the second half characterised by a
weakening economy and demand.
Widespread strike actions in both mining and manufacturing affected the economy during
the year and the Group lost almost one month
of production, costing an irrecoverable
R30 million that directly impacted our bottom line. Contingency plans were implemented but in certain limited
instances there was no alternative but to declare force majeure.
The ongoing electricity outages and load shedding is seriously disruptive to manufacturing, presenting us with
practical challenges on our production lines. Gross contribution lost in the last quarter is calculated at R5 million. This has
an added consequence of negating the benefits of our energy-saving initiatives. The Group keeps a detailed schedule of
hours lost, costs incurred, raw materials wasted and start-up time taken to regain production that are associated
directly with planned or sudden outages and power dips.
The group is a level 3 B-BBEE contributor according to independent third-party verification.
Our focus on pricing and procurement coordination has continued to yield benefits while demand forecasting is working
well.
Tonnage of polymer converted in our continuing operations for the year increased by 2,4% but within this is a change
in mix with a shift in favour of moulding technology production where volumes converted increased by 18%.
Our thermoforming technologies returned a pleasing increase in production sales value per tonne produced in relation
to the cost of polymer. Average selling prices per kilogram converted increased by 16% while sales in Rand in increased
by 3%.
For the year as a whole, Group selling prices in continuing operations were 5% higher than the previous year and in
part due to value added increasing as a result of the strategic initiatives to move up the value chain and remove
low-margin business.
There was a sharp decline in Dollar-based global oil prices during the second half of the year and in particular in
the final quarter. This has a direct influence on polymer market dynamics and, in particular, the price of virgin resin.
During the year, the Rand weakened further against the US Dollar, negating some of the benefit of lower Dollar-based
polymer prices. The impact on Astrapak was delayed due to the timing of pricing arrangements.
During the final quarter of the year, there was a slightly depressive effect on margin as stock manufactured at
earlier input prices was delivered to customers. The consensus expectation is that lower US Dollar oil prices and therefore
polymer prices will be a feature for some time.
Raw material price rises or reductions are largely passed through to customers as determined by market relevant
factors, including the exchange rate, and in line with contractual price adjustment mechanisms. On a through-the-cycle basis,
fluctuations in raw material pricing are broadly neutral for the Group.
Astrapak is well positioned with key customers within moulding and forming technologies. Market sectors such as
personal care and toiletries, automotive lubricants, household goods and food products are relatively defensive but require
particular excellence and sophistication in manufacturing execution and a need for continued investment.
Customer engagement was a top executive priority during the year with a focus on managing customer expectation in so
far as demand planning and forecasting is concerned and in being quick to respond when deficiencies or problems occur.
Financial review
An attributable loss of R143,3 million is recorded of which R111,3 million relates to discontinued operations. Of the
headline loss of R86,5 million, R83,9 million relates to discontinued operations. The headline loss from continuing
operations therefore reduces to R2,5 million from R11,7 million.
The total loss attributable to ordinary shareholders equates to 114,4 cents per share of which 22,5 cents is
attributable to continuing operations and 91,9 cents to the discontinued operations.
The headline loss from continuing operations attributable to ordinary shareholders equates to 2,1 cents per share. In
the corresponding restated period the headline loss from continuing operations equated to 9,7 cents per share.
Property, plant and equipment in the amount of R38,6 million was impaired, largely in discontinued operations.
Goodwill in the amount of R35,2 million was impaired and is associated with discontinued operations. The legacy situation
insofar as the assets of the Group is concerned has principally been dealt with.
The gross margin of 25% compared with 26% in the prior year was impacted by stock write-offs, retrenchment costs,
business clean-up costs and the irrecoverable impact of strikes, as mentioned in the operational review. Retrenchment costs
alone came to R29 million, up from R12 million the prior year.
A portion of costs associated with the turnaround are included in the headline earnings calculation and recorded as
normal running expenses. Furthermore, discontinued operations continue to incur costs at the centre until such time as
they are transferred to the new beneficial owners. Specialists are also engaged as necessary to assist with change
management. These costs are gradually being eliminated as the strategic objectives are met. The Group will have an extensively
rightsized overhead structure going forward.
Costs incurred in respect of various clean-up and corrective actions are estimated to be approximately R50 million.
A decrease in funds applied to working capital has resulted in the Group exceeding its internal benchmark with net
working capital for continuing operations reducing to R99 million from R148 million in the prior year, a 33% reduction. Net
working capital days for continuing operations was 26 days while net working capital days for both continuing and
discontinued operations was 31 days versus 41 days in the previous year. This illustrates the asset management efficiency of
our continuing operations.
A good balance has been struck between doing what is right to ensure operational excellence while 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.
Net debt associated with continuing operations has fallen to R193 million from R230 million and represents a net debt
to equity ratio of 19%. Net debt for the Group as a whole at balance sheet date was R308 million, representing a net
debt to equity ratio of 30%, and compares with R343 million in 2014 when the net debt to equity ratio was also 30%.
Certain operations now classified as discontinued and held-for-sale absorbed a disproportionate amount of cash during
the year, including the funding of losses. Core continuing businesses are net cash positive over and above disposal
proceeds.
Group revenue from continuing operations increased by 7,8% to R1,4 billion. Polymer tonnage consumed in production
increased by 2,4% to 35 470 tonnes. Selling price per tonne increased by 5,4% compared with the same 12-month period in
the prior year. This reflects an element of growth and a change in mix toward higher value production and the elimination
of low-margin business.
Gross profit increased by 3% to R349,3 million. Direct factory labour and factory overhead cost increases were
contained to 6% respectively.
Selling overhead increased by 1% and administration overhead increased by 6% while distribution costs increased by
12%. Salaries and wages in continuing operations increased by 2% to R276,6 million. The depreciation charge for continuing
operations increased to R65,9 million from R58,8 million, a rise of 12%. Total expenses increased by 6,9% to R317,9
million.
As previously mentioned, costs remain too high but we know exactly what those costs are for and we expect to reduce
them meaningfully as we move into the post-turnaround phase to optimal returns on the slimmed down asset base.
The increase in other income includes profits on assets disposed of and various miscellaneous items.
Profit before interest, tax depreciation and amortisation from continuing operations increased by 27% to R127,4
million from R100,2 million.
Profit from continuing operations before exceptional items is R61,5 million, an increase of 49% compared with the
R41,4 million in the prior year.
Net finance costs of R21 million translates to a PBITDA interest cover ratio of six times.
The pre-tax profit from continuing operations is R3,9 million versus R11,4 million and the tax charge is R14,9 million
versus R5,9 million. Capital expenditure on continuing operations was R112,6 million compared with R174,1 million in
the prior year. We are committed to keeping replacement capex in line with depreciation but we anticipate an elevated
level of capex in the 2016 year as we invest in partnership with major multinational customers in return for long-term
contracts.
Cash generated from all operations for the consolidated Group was R96,2 million. The restated comparative of R424,4
million this was distorted by insurance proceeds as provision for insurance proceeds was previously reflected within
accounts receivable.
The Group ended the year with ordinary equity of R867,8 million, down from R1 billion, with retained income at R664,2
million versus R795,1 million. Goodwill is reflected at R75,5 million. Preference share capital, net of costs is
unchanged at R142,6 million. Net asset value per share is 835 cents.
The Group has substantial unutilised credit facilities and low debt to equity on a continuing basis of 19%. We
anticipate further cash inflows in the first half of the 2016 financial year associated with sales of businesses.
The Board will assess appropriate uses for surplus cash on a regular basis.
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 and
profitability attained.
Holders of preference shares continue to receive dividends in the normal course.
Prospects
The Group has started the 2016 financial year on a positive note. Restructuring initiatives over the past two years
will transform Astrapak into nine focused manufacturing entities. Prevailing industry developments attest to the
correctness of our strategy and we are well placed to compete.
Markets served are expected to remain soft but we are achieving respectable levels of volume and pricing within the
specific areas that we serve. Our efforts to secure long-term supply contracts have been successful. Astrapak enjoys
strong market positions in categories such as personal care, dairy and spreads, catering and confectionery, and automotive
lubricants. These are all relatively defensive.
Electricity supply is an impediment to reliable manufacturing production and currently an additional burden on the
cost of doing business. We take all mitigation measures that we are able to and coordinate with customers to ensure
delivery is achieved.
During the next few months we will complete our exit from non-core businesses and steadily continue to eliminate
expenses incurred during the turnaround phase. Cash proceeds from non-core businesses already sold, as already advised on
SENS, will yield R149 million and further bolster the balance sheet.
Astrapak thanks its customers, suppliers, funders and shareholders for their support and encouragement during this
difficult transition phase.
The Group is targeting a considerably improved result in 2016.
The above forecast information has not been reviewed or reported on by the Company's external auditors.
Changes to the Board
Resignations
Mr Sandile Ngwabi resigned as company secretary with effect from 29 August 2014.
Ms Gugu Duda resigned as a non-executive director with effect from 14 May 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, with approval from the JSE.
Mr Thabo Vincent Mokgatlha was appointed as an independent non-executive director to the Board and as a member of the
Audit and Risk Committees with effect from 21 July 2014. Effective 5 October 2014 Mr Mokgatlha was appointed as the
Chairman of the Audit Committee replacing Mr Gunter Steffens who is also an independent non-executive director.
Ms Vashnee Mahadeo was appointed as Company Secretary effective 29 August 2014.
Share capital
There was no movement in authorised share capital during the year. The number of ordinary shares in issue is 135 131
000 and the weighted average number of ordinary shares in issue is 121 036 000 shares.
Changes in shareholding
As at 28 February 2015, Coronation Asset Management Proprietary Limited and Regarding Capital Management Proprietary
Limited held 25,38% and 17,85% of Astrapak respectively compared with 25,90% and 18,76% respectively as at 29 August
2014, the last interim reporting period. Lereko Metier Capital Growth Fund remains the largest single shareholder with an
unchanged holding of 29,92%.
Statement of compliance and presentation
Audited summarised provisional consolidated financial results for the year ended 28 February 2015 have been prepared
in accordance with IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the
Listings Requirements of the JSE Limited and the requirements of the South African Companies Act. They are prepared on the
historical cost basis, except for the revaluation of certain properties and financial instruments to fair value.
The accounting policies applied in the presentation of the audited summarised provisional consolidated financial
results for the year ended 28 February 2015 are in terms of IFRS and consistent with those applied for the year ended 28
February 2014, except for new standards and interpretations that became effective on 1 March 2014 and deemed applicable to
the Group. The adoption of these standards and interpretations had no impact on the results for the period nor has it
required the restatement of any prior year figures. The amounts disclosed are audited, except if indicated otherwise.
The Board endorses the recommendations set out in King III and supports the Code of Corporate Practices and Conduct
set out therein.
Mr Manley Diedloff, Chief Financial Officer, was responsible for supervising the preparation of this report.
Subsequent events
On 18 February 2015, shareholders were advised that Astrapak has entered into an agreement to dispose of Cinqpet (a
division of Astrapak Manufacturing Holdings Proprietary Limited) to Boxmore Plastics SA Proprietary Limited. The effective
date of the transaction is expected to be on or about 30 June 2015.
On 31 March 2015, shareholders were advised that Astrapak had entered into an agreement with Transpaco Limited, in
terms of which Transpaco Limited would be acquiring fixed assets, including the associated long-term liabilities,
inventory, goodwill of East Rand Plastics (a division of Astrapak Manufacturing Holdings Proprietary Limited) as well as the
property from which the business of East Rand Plastics operates. The closing date of the acquisition is estimated to be 1
July 2015.
Other than the above mentioned, there are no significant subsequent events that have an impact on the financial
information at 28 February 2015.
For and on behalf of the Board
Phumzile Langeni
Chairman
Robin Moore
Chief Executive
Manley Diedloff
Chief Financial Officer
Denver
15 April 2015
Summary consolidated statement of comprehensive income
(R’000) Notes % Audited Restated
change financial year Audited
ended financial year
28 February ended
2015 28 February
2014
CONTINUING OPERATIONS
Revenue 9 7,8 1 388 606 1 288 422
Cost of sales (1 039 339) (949 667)
Gross profit 3,1 349 267 338 755
Other items of income and expenditure 30 131 (27)
Distribution and selling overheads (99 392) (90 521)
Administrative and other expenses (218 495) (206 837)
Profit from operations before exceptional items 48,7 61 511 41 370
Exceptional items 10 (36 632) (7 747)
Profit from operations 11 (26,0) 24 879 33 623
Investment income 13 372 14 618
Finance costs (34 396) (36 807)
Profit before taxation (66,3) 3 855 11 434
Taxation expense (14 891) (5 937)
(Loss)/profit for the year from continuing operations (300,8) (11 036) 5 497
DISCONTINUED OPERATIONS
Loss for the year from discontinued operations 12 (72,7) (111 272) (64 414)
Loss for the year (107,6) (122 308) (58 917)
Other comprehensive loss (not to be recycled to profit and loss) (4 813) (14 734)
Total comprehensive loss for the year (72,6) (127 121) (73 651)
Attributable to:
Ordinary shareholders of the parent (143 309) (96 393)
- Loss for the year from continuing operations (27 224) (17 245)
Profit/(loss) for the year from continuing operations before exceptional items 9 408 (9 498)
Exceptional items (36 632) (7 747)
- Loss for the year from discontinued operations (111 272) (64 414)
- Revaluation of land and buildings (net of tax) (4 813) (14 734)
Preference shareholders of the parent 10 890 11 362
Non-controlling interest 5 298 11 380
Total comprehensive loss for the year (127 121) (73 651)
Loss per ordinary share 13 (69,5) (114,4) (67,5)
- continuing operations (57,3) (22,5) (14,3)
- discontinued operations (72,7) (91,9) (53,2)
Fully diluted headline loss per ordinary share (cents) 13 (69,1) (114,0) (67,4)
- continuing operations (57,7) (22,4) (14,2)
- discontinued operations (57,4) (91,6) (58,2)
Preference dividend paid and accrued 10 890,00 11 362,00
Preference dividend per share (cents) 726,00 757,47
Reconciliation of headline earnings
(R’000) Notes % Audited Restated
change financial year Audited
ended financial year
28 February ended
2015 28 February
2014
Ordinary shareholders of the parent (69,6) (138 496) (81 659)
- continuing operations (27 224) (17 245)
- discontinued operations (111 272) (64 414)
Headline loss adjustments
- Reversal of insurance proceeds - 23 333
- Impairment of property, plant and equipment 38 625 40 532
- Profit on disposal of business (15 165) -
- Profit on disposal of property, plant and equipment (2 677) (11 208)
- Impairment of goodwill 35 248 -
- Total tax effect of adjustments (4 035) (10 928)
Headline loss attributable to ordinary shareholders (86 500) (39 930)
- continuing operations (2 509) (11 682)
- discontinued operations (83 991) (28 248)
Headline loss per ordinary share (cents) 13 (116,7) (71,5) (33,0)
- continuing operations 78,4 (2,1) (9,7)
- discontinued operations (197,9) (69,4) (23,3)
Fully diluted headline loss per ordinary share (cents) 13 (116,4) (71,2) (32,9)
- continuing operations 78,1 (2,1) (9,6)
- discontinued operations (196,6) (69,1) (23,3)
Summary consolidated statement of financial position
(R’000) Notes % Audited
change financial year Audited
ended financial year
28 February ended
2015 28 February
2014
Assets
Non-current assets (35,4) 933 932 1 446 435
Property, plant and equipment 3 734 314 1 225 125
Goodwill 75 497 117 118
Deferred taxation assets 69 326 46 868
Investment and loans 4 54 795 57 324
Current assets (42,4) 472 038 819 191
Inventories 5 130 378 289 491
Accounts receivable 269 069 460 211
Taxation receivable 2 577 6 820
Cash and cash equivalents 6 70 014 62 669
Assets classified as held-for-sale 7 688 569 32 098
Total assets (8,8) 2 094 539 2 297 724
Equity and liabilities
Total equity (11,5) 1 074 575 1 214 748
Equity attributable to ordinary shareholders of the parent 867 772 1 014 517
Preference share capital and share premium 142 590 142 590
Non-controlling interest 64 213 57 641
Non-current liabilities (24,2) 343 324 452 721
Long-term interest-bearing debt 170 190 260 901
Long-term financial liabilities - 904
Deferred taxation liabilities 173 134 190 916
Current liabilities (35,5) 398 168 617 284
Trade and other payables and provisions 299 693 464 080
Shareholders for preference dividends 4 258 4 022
Short-term interest-bearing debt 91 450 143 981
Taxation payable 1 637 4 812
Bank overdrafts 6 1 130 389
Liabilities classified as held-for-sale 7 278 472 12 971
Total equity and liabilities (8,8) 2 094 539 2 297 724
Summary consolidated statement of changes in equity
(R’000) Notes Audited
financial year Audited
ended financial year
28 February ended
2015 28 February
2014
Opening balance 1 214 748 1 309 914
Comprising:
Ordinary share capital and premium 199 502 199 502
Retained income 795 090 875 066
Capital reserve 8 20 980 20 523
Non-controlling put options (904) (5 441)
Revaluation reserve 147 296 162 030
Treasury shares (147 447) (147 447)
Equity attributable to ordinary shareholders of the parent 1 014 517 1 104 233
Preference share capital and premium 142 590 142 590
Non-controlling interest 57 641 63 091
Movements:
Loss for the year (122 308) (58 917)
Preference dividend paid (10 890) (11 362)
Acquisition of non-controlling interest - (36 000)
Contributions made by non-controlling interest 1 274 (2 521)
Adjustment to fair value of put options 904 4 537
Capital gains taxation on disposal of revalued properties - (5 319)
Revaluation reserve (4 813) 13 959
Share-based payment (income)/expense for the year (4 340) 457
Closing balance 1 074 575 1 214 748
Comprising:
Ordinary share capital and premium 199 502 199 502
Retained income 664 221 795 090
Capital reserves 8 16 640 20 980
Non-controlling put options - (904)
Revaluation reserve 134 856 147 296
Treasury shares (147 447) (147 447)
Equity attributable to ordinary shareholders of the parent 867 772 1 014 517
Preference share capital and premium 142 590 142 590
Non-controlling interest 64 213 57 641
Total equity 1 074 575 1 214 748
Summary consolidated statement of cash flows
(R’000) Note % Audited
change financial year Audited
ended financial year
28 February ended
2015 28 February
2014
Cash generated from operations before working capital changes 37 121 85 511
Decrease in working capital 59 041 338 887
Net interest and taxation paid (50 146) (52 635)
Net cash inflow from activities before distributions to shareholders (87,6) 46 016 371 763
Dividend distribution to all shareholders (10 654) (12 381)
Net cashflow from operating activities (90,2) 35 362 359 382
Capital expenditure (162 851) (208 950)
Net movement of investments, subsidiaries and 9 563 (42 441)
non-controlling interests
Proceeds on disposal of property, plant and equipment 152 817 79 602
Net cashflow from investing activities (471) (171 789)
Net cashflow from financing activities (28 287) (80 874)
Net increase in cash and cash equivalents 6 604 106 719
Net cash and cash equivalents at beginning of the year 62 280 (44 439)
Net cash and cash equivalents at end of the year 6 10,6 68 884 62 280
Summary consolidated segmental analysis
(R’000) Rigids Flexibles Total Discon- Total
continuing tinued Group
operations operations
Revenue for segment 2015 1 515 248 - 1 515 248 1 155 265 2 670 513
2014 1 425 748 - 1 425 748 1 391 917 2 817 665
Transactions with other operating segments of the Group 2015 (126 642) - (126 642) (35 493) (162 135)
2014 (137 326) - (137 326) (59 979) (197 305)
Revenue for external customers 2015 1 388 606 - 1 388 606 1 119 772 2 508 378
2014 1 288 422 - 1 288 422 1 331 938 2 620 360
Profit/(loss) from operations before exceptional items 2015 61 511 - 61 511 (105 642) (44 131)
2014 41 370 - 41 370 (23 449) 17 921
Total assets 2015 1 158 094 247 876 1 405 970 688 569 2 094 539
2014 1 617 357 680 367 2 297 724 - 2 297 724
Total liabilities 2015 287 562 453 930 741 492 278 472 1 019 964
2014 663 277 419 699 1 082 976 - 1 082 976
Capex 2015 112 876 - 112 876 49 975 162 851
2014 174 106 34 844 208 950 - 208 950
Depreciation 2015 65 899 - 65 899 43 291 109 190
2014 58 822 - 58 822 48 936 107 758
* As part of the Group’s strategy to discontinue the Flexibles Division and rationalise the Rigids Division, operations
forming part of the Flexibles Division and Rigids Division which have been discontinued and classified as held-for-sale
have been reflected as discontinued operations.
Supplementary information
(R’000) Audited
financial year Audited
ended financial year
28 February ended
2015 28 February
2014
Number of ordinary shares in issue ('000) 135 131 135 131
Weighted average number of ordinary shares in issue ('000) 121 036 121 016
Fully diluted weighted average number of ordinary shares in issue ('000) 121 531 121 226
Number of preference shares in issue ('000) 1 500 1 500
Net asset value per share (cents) 835 956
Net tangible asset value per share (cents) 772 859
Closing share price (cents) 500 700
Market capitalisation (R million) 676 946
Net interest-bearing debt as percentage of equity (%) 30,5 29,6
Net debt 307 711 342 602
Long-term interest-bearing debt 233 077 260 901
Short-term interest-bearing debt 143 518 143 981
Cash and cash equivalents (70 014) (62 669)
Bank overdraft 1 130 389
Interest cover (before exceptional items) 2,9 1,9
Net working capital days 31 41
Contingent liabilities 6 571 6 971
Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) 127 410 100 192
- continuing operations
Profit from operations before exceptional items 61 511 41 370
Depreciation 65 899 58 822
Notes
1. Basis of preparation
These summary consolidated financial statements for the year ended 28 February 2015 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 Standards as issued by the Accounting
Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council, 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 consolidated and separate
financial statements for the year ended 28 February 2014. The auditors, Deloitte & Touche, have issued an unmodified
audit opinion on the complete consolidated and separate financial statements as well as these summary consolidated
financial statements. Copies of the reports are available for inspection at the Company’s registered office and also
on the company website www.astrapak.co.za. Standards and interpretations that were effective in the year were adopted.
These did not have a significant impact on the financial statements.
The auditor's report does not necessarily report on all of the information contained in this announcement/financial
results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditor's engagement they should obtain a copy of the auditor's report together with the accompanying financial
information from the issuer's registered office.
2. Comparative figures
Discontinued operations
The comparative figures have been restated due to the classification of Hillfort Plastics Cape Town, Cinqplast
Denver, Packaging Consultants, Plastop Bronkhorstspruit, Knilam Packaging, East Rand Plastics and Cinqpet (all
divisions of Astrapak Manufacturing Holdings Proprietary Limited) and Barrier Film Converters Proprietary Limited,
Coralline Investments as a discontinued operation. Packaging Consultants has also been included in the February 2015
discontinued operations.
(R’000) Audited Restated
financial year Audited
ended financial year
28 February ended
2015 28 February
2014
3. Property, plant and equipment
Opening net carrying value 1 225 125 1 214 221
Additions 158 038 208 950
Classified as assets held-for-sale (424 625) (2 300)
Revaluation of properties - 17 183
Disposals (76 409) (64 640)
Impairment (38 625) (40 531)
Depreciation (109 190) (107 758)
Closing net carrying value 734 314 1 225 125
Capital expenditure for the year 158 038 208 950
Classified as held-for-sale 4 813 -
Capital commitments
- contracted not spent 34 680 15 094
- authorised not contracted 9 433 1 795
4. Investments and loans
Vendor loan to Afripak Consumer Flexibles Proprietary Limited in terms of Flexibles disposal
transaction 50 888 50 881
Vendor loan to Tadbik Pack SA Proprietary Limited on disposal of the Alex White & Company
operation 3 895 6 431
Unlisted investment 12 12
Investments and loans at the end of the year 54 795 57 324
5. Inventories
Inventories amounting to R3 943 (February 2014: R51 479) are carried at net realisable value
6. Cash and cash equivalents
Cash and cash equivalents 70 014 62 669
Bank overdrafts (1 130) (389)
Net cash and cash equivalents at the end of the period 68 884 62 280
7. Assets held-for-sale and liabilities relating to assets
held-for-sale
The assets held-for-sale relate to the assets that are being disposed of, rationalised
and discontinued. Refer to note 2 above.
The prior year consists of assets and liabilities of Astrapak Property Holdings Proprietary Limited,
Packaging Consultants and Tristar Plastics both part of the flexibles segment
Opening balance at the beginning of the year 32 098 52 974
Inventory 93 458 -
Accounts receivable 143 168 -
Assets previously held-for-sale disposed of (25 100) (23 176)
Revaluation of property (4 813) -
Deferred taxation assets 20 320 -
Property, plant and equipment classified as held-for-sale 429 438 2 300
Assets held-for-sale at the end of the year 688 569 32 098
Liabilities relating to assets held-for-sale consist of the following:
Opening balance as at the beginning of the year 12 971 35 686
Long-term interest-bearing debt 101 984 12 971
Trade creditors 153 742 -
Deferred taxation liabilities 9 775 -
Liabilities previously classified as held-for-sale disposed of 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 278 472 12 971
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 Payment income of
R4,34 million (February 2014: R0,45 million change).
9. Revenue-continuing operations
Revenue for the Group 1 515 248 1 425 748
Transactions with other entities in the Group (126 642) (137 326)
Revenue for external customers 1 388 606 1 288 422
Volume (in ’000 tons) 35 470 34 653
10. Exceptional items - continuing operations
Impairment of goodwill (35 248) -
Impairment of property, plant and equipment (1 384) (7 747)
Exceptional items (36 632) (7 747)
11. Profit from operations - continuing operations
Profit from continuing operations is arrived at after taking the following
into account:
Net profit on disposal of property, plant and equipment 3 326 24
Profit on disposal of business 15 165 -
Depreciation 65 899 58 822
IFRS 2 Share-based Payment (income)/expense (4 340) 457
12. Loss for the year from discontinued operations
During the 2015 year the Board classified Barrier Film Convertors Proprietary Limited, Coralline Investments
Proprietary Limited and Cinqplast Denver, Cinqpet, East Rand Plastics, Hilfort Plastics Cape Town,
Knilam Packaging and Plastop Bronkhorstspruit (all divisions of Astrapak Manufacturing Holdings
Proprietary Limited) as discontinued operations. The comparatives have been restated accordingly.
As at 28 February 2014 Packaging Consultants (a division of Astrapak Manufacturing Holdings
Proprietary Limited) was classified as a discontinued operation.
Revenue 1 119 772 1 331 938
Cost of sales (1 015 934) (1 175 930)
Gross profit 103 838 156 008
Other income 5 855 47 869
Distribution and selling costs (109 109) (122 325)
Administration and other operating expenses (106 226) (105 001)
Loss from operations before exceptional items from discontinued operations (105 642) (23 449)
Exceptional items (37 241) (56 117)
Loss from operation for discontinued operations (142 883) (79 566)
Investment income 1 325 1 921
Finance costs (12 984) (17 531)
Loss before taxation from discontinued operations (154 542) (95 176)
Taxation 43 270 30 762
Loss after taxation from discontinued operations (111 272) (64 414)
Net cash flows incurred by discontinued operations for the year are represented below:
Operating cash outflow (32 705) (184 654)
Investing cash (outflow)/inflow (42 078) 193 623
Financing cash inflow/(outflow) 82 887 (34 209)
Net increase/(decrease) in cash and cash equivalents from discontinued operations 8 104 (25 240)
13. Loss per ordinary share and headline loss per ordinary share - basic and fully diluted
Loss per ordinary share is calculated by dividing the loss attributable to ordinary shareholders of the
parent by the weighted average number of shares in issue over the year in which the attributable loss
was generated.
Headline loss per ordinary share is calculated by dividing the headline loss attributable to ordinary
shareholders of the parent by the weighted average number of shares in issue over the year in which
headline loss was generated.
Fully diluted loss and headline loss per ordinary share is determined by adjusting the weighted average
number of shares in issue over the year 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
Shareholders were advised that Astrapak had entered into an agreement to dispose of
Cinqpet (a division of Astrapak Manufacturing Holdings Proprietary Limited) to Boxmore Plastics SA Proprietary
Limited. The effective date of the transaction is expected to be on or about 30 June 2015.
On 31 March 2015, shareholders were advised that Astrapak had entered into an agreement with Transpaco
Limited, in terms of which Transpaco Limited would be acquiring fixed assets, including the associated long-term
liabilities, inventory and goodwill of East Rand Plastics (a division of Astrapak Manufacturing Holdings
Proprietary Limited) as well as the property from which the business of East Rand Plastics operates. The closing
date of the acquisition is estimated to be 1 July 2015.
No other facts or circumstances material to the appreciation of this report have occurred between 28 February
2015 and the date of this report.
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*, TV Mokgatlha*
*Non-executive
Company Secretary: V Mahadeo
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
Rigids Division: Consupaq › JJ Precision Plastics › Marcom Plastics › PAK 2000 › Plastech
› Plastform › Plastop (KwaZulu-Natal) › Thermopac › Weener - Plastop
For more information on our business please go to: www.astrapak.co.za
Date: 16/04/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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