Wrap Text
Reviewed condensed consolidated results for the year ended 30 June 2015 and dividend announcement
TRANSPACO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1951/000799/06)
Share code: TPC ISIN: ZAE000007480
("Transpaco")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED
30 JUNE 2015 AND DIVIDEND ANNOUNCEMENT
GROUP TURNOVER UP 9%
HEADLINE EARNINGS PER SHARE UP 16%
TOTAL DIVIDEND PER SHARE 108 CENTS
A leading manufacturer, recycler and distributor of plastic
and paper packaging products
Introduction
The significant increase in headline earnings for the year to June 2015
is indicative of Transpaco’s resilience in still challenging times.
After enduring a debilitating industry-wide strike during July and
August 2014, Transpaco clawed back approximately R10 million of lost
earnings and surpassed the previous year’s headline earnings performance
by a gratifying 16,9%.
The group continued its strong performance, with good turnover growth and
a meaningful increase in headline earnings per share (HEPS) as above.
Turnover of R1,36 billion was attributable to a combination of volume
growth and price increases. Effective marketing and sales strategies
remain key drivers of maintaining this momentum.
Transpaco’s performance was further strengthened by controlled operating
costs, which increased by 6,4% year-on-year against an 8,7% increase
in turnover. This was achieved by improved manufacturing, distribution
and administration efficiencies.
Well-managed working capital resulted in net interest received and a
strong net cash positive position being maintained.
Notwithstanding that margins remained under pressure from higher input
costs - notably energy and raw materials - the group operating margin
increased to 8,1% (June 2014: 7,8%).
Financial Results
Group operating profit increased by 12,6% to R110,1 million
(June 2014: R97,8 million) on turnover of R1 356,0 million,
up 8,7% (June 2014: R1 247,4 million).
Transpaco’s total comprehensive income improved by 13,8 % to
R79,3 million (June 2014: R69,7 million) and earnings per share
(EPS) by 13,3% to 245,3 cents (June 2014: 216,5 cents).
Headline earnings grew by 16,9% to R78,7 million (June 2014:
R67,3 million) and HEPS by 16,3% to 243,3 cents (June 2014: 209,2 cents).
The weighted average number of shares in issue in calculating EPS
and HEPS was 32 323 000, compared to 32 164 000 in the previous year.
Diluted HEPS increased 18,2% to 242,8 cents (June 2014: 205,5 cents).
Cash generated from operations increased to R144,8 million
(June 2014: R121,0 million). Cash and cash equivalents at year-end
were R153,6 million (June 2014: R91,3 million). Transpaco’s net
interest-bearing debt-to-equity position remains cash positive.
Net asset value per share increased by 11,0% to 1 387 cents
(June 2014: 1 249 cents).
Directorate
Archie Aaron has served with distinction on the Transpaco board since
1977 and as chairman for the past twelve years. His dedication,
commitment and contribution to Transpaco has been instrumental
in the group’s success. In relinquishing the role of chairman but
remaining on the board Archie has paved the way for Derek Thomas,
appointed as Chairman effective 1 July 2015, to bring a youthful
vitality as well as his sound business skills and leadership qualities
to Transpaco.
Prospects
The acquisition of East Rand Plastics, South Africa’s premier refuse
bag manufacturer, took effect from 1 August 2015. The business will
be incorporated into Transpaco for an eleven-month period in the
following financial year and is expected to be earnings enhancing
into the future.
While a challenging trading environment prevails, management will
remain focused on sound business and financial fundamentals in order
to achieve Transpaco’s organic growth ambitions.
Expansion opportunities including acquisitions continue to be pursued.
Transformation
Transpaco’s sixth independent accreditation process in respect of
Black Economic Empowerment reflected a Level 4 value added
contributor. 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 74,0 cents per share, resulting in total dividends of
108,0 cents per share for the year ended 30 June 2015 (June 2014:
93,0 cents per share), an increase of 16,1%. After applying the
dividend withholding tax of 15% a net final dividend of
62,90000 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 33 317 482 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, 11 September 2015
Shares trade ex dividend Monday, 14 September 2015
Record date Friday, 18 September 2015
Payment date Monday, 21 September 2015
Share certificates may not be dematerialised or rematerialised
between Monday, 14 September 2015 and Friday, 18 September 2015,
both days inclusive.
Basis of Preparation and Accounting Policies
The group’s 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,
Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the JSE Listings Requirements and
the Companies Act. The principal 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 2014, except for the adoption of new
standards and interpretations effective as of 1 July 2014.
The group has not early-adopted any other standard, interpretation
or amendment that has been issued but is not yet effective.
The condensed consolidated financial statements 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 2015.
The presentation and disclosure complies with International
Accounting Standard (IAS) 34.
Review by 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
D Thomas PN Abelheim L Weinberg
Non-executive Chairman Chief Executive Financial Director
DIRECTORS
D Thomas (Chairman)*; PN Abelheim (Chief Executive);
L Weinberg (Financial Director); A J Aaron**; HA Botha**;
SR Bouzaglou; SI Jacobson*;
SP van der Linde (Lead Independent Director)**
*non-executive ** independent non-executive
Date 19 August 2015
Auditors Ernst & Young Incorporated
Transpaco Limited Registration number: 1951/000799/06
Share code: TPC
ISIN: ZAE000007480
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 Reviewed
12 months % 12 months
R'000 June 2015 Change June 2014
Revenue 1 358 739 1 248 997
Turnover 1 356 025 8.7 1 247 386
Cost of sales (891 763) (816 179)
Profit before
operating costs
and depreciation 464 262 7.7 431 207
Operating costs (319 148) (300 060)
Depreciation (34 967) (33 303)
Operating profit 110 147 12.6 97 844
Finance income 2 714 1 611
Finance costs (2 480) (2 635)
Profit before
taxation 110 381 14.0 96 820
Taxation (31 095) (27 169)
Profit for
the year 79 286 69 651
Other comprehensive
income - -
Total comprehensive
income 79 286 13.8 69 651
Weighted average
ranking number of
shares in issue
('000) 32 323 32 164
Diluted weighted
average ranking
number of shares in
issue ('000) 32 388 32 748
Earnings per
share (cents) 245.3 13.3 216.5
Diluted earnings
per share (cents) 244.8 15.1 212.7
Headline earnings
per share (cents) 243.3 16.3 209.2
Diluted headline
earnings per
share (cents) 242.8 18.2 205.5
Dividend per
share (cents)* 108.0 16.1 93.0
Reconciliation of
headline earnings
(R'000)
Basic earnings 79 286 69 651
Profit on disposal
of property, plant
and equipment (636) (2 354)
Headline earnings 78 650 16.9 67 297
*Includes interim dividend of 34 cents (June 2014 - 39 cents)
and a dividend declared after the period of 74 cents
(June 2014 - 54 cents)
STATEMENT OF FINANCIAL POSITION
Reviewed Reviewed
12 months 12 months
R'000 June 2015 June 2014
ASSETS
Non-current assets 205 680 213 606
Property, plant
and equipment 199 813 207 163
Intangibles 482 482
Goodwill 3 204 3 204
Deferred taxation 2 181 2 757
Current assets 523 763 441 404
Inventories 164 428 161 835
Trade and other
receivables 202 635 183 757
Short-term
receivables - 642
Taxation receivable 3 100 3 904
Cash and cash
equivalents 153 600 91 266
TOTAL ASSETS 729 443 655 010
EQUITY AND LIABILITIES
Capital and reserves 455 176 402 183
Issued share
capital 328 322
Share premium 11 019 11 019
Other reserve 4 005 3 856
Distributable
reserve 439 824 386 986
Non-current liabilities 50 424 49 222
Interest-bearing
borrowings 18 598 21 539
Deferred income 7 639 5 230
Deferred taxation 24 187 22 453
Current liabilities 223 843 203 605
Trade payables
and accruals 187 847 172 988
Provisions 23 379 19 225
Current portion of
interest-bearing
borrowings 11 484 10 632
Deferred income 1 131 689
Taxation payable 2 71
TOTAL EQUITY AND
LIABILITIES 729 443 655 010
Number of shares in
issue ('000)
Number of shares (net
of treasury shares) 32 337 32 017
Net movement in
treasury shares 484 180
Ranking number of
shares 32 821 32 197
Salient features
Net asset value per
share (cents) 1 387 1 249
Operating margin % 8.1 7.8
Net interest-bearing
debt : equity ratio % Net cash positive Net cash positive
STATEMENT OF CASH FLOWS
Reviewed Reviewed
12 months 12 months
R'000 June 2015 June 2014
Cash flow from
operating activities
Cash generated
from operations 144 772 120 977
Dividends paid (28 534) (29 919)
Finance income 2 714 1 611
Finance costs (2 480) (2 635)
Taxation paid (28 050) (29 271)
Net cash inflow from
operating activities 88 422 60 763
Cash flow used in
investing activities
Proceeds on disposal
of property, plant
and equipment 1 290 4 083
Expansion and
replacement of
property, plant
and equipment (28 023) (46 907)
Proceeds from
long-term
receivables - 642
Proceeds from
short-term
receivables 642 1 666
Net cash outflow from
investing activities (26 091) (40 516)
Cash flow used in
financing activities
Proceeds from
treasury shares 2 092 1 018
Proceeds from
borrowings 8 192 -
Repayment of
borrowings (10 281) (13 685)
Net cash inflow/
(outflow) from
financing activities 3 (12 667)
Net movement in cash
for the year 62 334 7 580
Cash and cash
equivalents at the
beginning of the year 91 266 83 686
Cash and cash
equivalents at the
end of the year 153 600 91 266
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Distributable
R'000 Capital Premium Reserves Reserve Total
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)
Inflow of treasury
shares 2 - - 1 016 1 018
Balance at
30 June 2014 322 11 019 3 856 386 986 402 183
Profit for the year - - - 79 286 79 286
Other comprehensive
income - - - - -
Total comprehensive
income - - - 79 286 79 286
Share-based payments - - 149 - 149
Dividend paid - - - (28 534) (28 534)
Inflow of treasury
shares 6 - - 2 086 2 092
Balance at
30 June 2015 328 11 019 4 005 439 824 455 176
SEGMENTAL ANALYSIS
Paper Properties
Plastic and Board and Group Total
R'000 Products Products Services Group
Turnover - 2015 898 623 457 402 - 1 356 025
Turnover to all
customers 977 689 479 931 - 1 457 620
Less turnover to
internal customers 79 066 22 529 - 101 595
Turnover - 2014 818 215 429 171 - 1 247 386
Turnover to all
customers 879 406 452 993 - 1 332 399
Less turnover to
internal customers 61 191 23 822 - 85 013
Operating profit -
2015 54 810 51 191 4 146 110 147
Operating profit -
2014 46 113 46 121 5 610 97 844
Profit before tax -
2015 54 054 50 146 6 181 110 381
Profit before tax -
2014 45 125 45 229 6 466 96 820
Capital expenditure -
2015 14 880 12 783 360 28 023
Capital expenditure -
2014 41 645 4 715 547 46 907
Assets - 2015 408 648 182 698 138 097 729 443
Assets - 2014 396 058 165 093 93 859 655 010
Liabilities - 2015 160 827 95 210 18 230 274 267
Liabilities - 2014 154 979 82 317 15 531 252 827
CAPITAL COMMITMENTS
Reviewed Reviewed
12 months 12 months
R'000 June 2015 June 2014
Capital expenditure
authorised and
contracted
Property, plant and
equipment 12 417 10 059
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