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Unaudited condensed interim group results for the six months to 31 December 2015 and dividend announcement
TRANSPACO LIMITED
(Incorporated in the Republic of South Africa)
Reg. No. 1951/000799/06
ISIN: ZAE000007480
Share Code: TPC
(“Transpaco” or “the company” or “the group”)
UNAUDITED CONDENSED INTERIM GROUP RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2015
AND DIVIDEND ANNOUNCEMENT
A leading manufacturer, recycler and distributor of plastic and paper packaging products
REVENUE UP 27%
HEADLINE EARNINGS PER SHARE UP 50%
DIVIDEND PER SHARE 52,0 CENTS
INTRODUCTION
Transpaco’s performance, reflecting a 50,4% increase in headline earnings per share
(HEPS), exceeded expectations despite a continued challenging economic environment.
The group’s margins, while remaining under pressure improved as raw material prices
stabilised during the period. Controlled expenses, increased volumes in certain
operations and the inclusion of East Rand Plastics for five months all contributed to
Transpaco’s pleasing results.
All Transpaco operations impacted favourably on group profits with several
outperforming the previous year.
East Rand Plastics, acquired by Transpaco effective 1 August 2015, is trading well and
is expected to continue making a positive contribution to group profits.
FINANCIAL RESULTS
December December %
Group 2015 2014 Increase
Turnover (R’m) 912,5 716,2 27,4
Operating profit (R’m) 89,3 56,8 57,2
Headline earnings (R’m) 62,8 40,8 54,1
Earnings per share (cents) 190,4 126,8 50,2
Headline earnings per share (cents) 190,6 126,7 50,4
Diluted headline earnings per share (cents) 190,3 124,7 52,6
Headline earning per share for the twelve calendar months ended 31 December 2015
increased 61% to 307,2 cents (December 2014: 191,4 cents.
The group’s net interest-bearing debt-to-equity (gearing) position is 17,6%
(December 2014: net cash positive).
The variation in gearing and net interest paid is attributable to funds utilised to
acquire East Rand Plastics and additional working capital requirements.
Net asset value per share increased by 14,0% to 1 503 cents (December 2014: 1 319 cents).
PROSPECTS
The group will continue its proven business strategy, targeting organic growth while
maintaining strict financial control and at the same time identifying and pursuing
appropriate acquisitions.
DIVIDEND
The board has declared an interim gross cash dividend out of income reserves of
52,0 cents per share (December 2014: 34,0 cents per share) for the six-month period
ended 31 December 2015. After applying the dividend withholding tax of 15%, a net
interim dividend of 44,20000 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 March 2016
Shares trade ex dividend Monday, 14 March 2016
Record date Friday, 18 March 2016
Payment date Tuesday,22 March 2016
Share certificates may not be dematerialised or rematerialised between Monday,
14 March 2016 and Friday, 18 March 2016, both days inclusive.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The group’s unaudited interim financial results have been prepared in accordance with
the recognition and measurement criteria of International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board (IASB), its
interpretations issued by the IFRS Interpretations Committee, the South African
Institute of Chartered Accountants Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council and comply with 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 2015. The group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
The group’s unaudited interim financial statements comply with IAS 34 – Interim
Financial Reporting (“IAS 34”). The interim report should be read in conjunction with
the Transpaco 2015 annual report.
BUSINESS COMBINATION
On 1 August 2015, the group acquired the East Rand Plastics division of Astrapak
Manufacturing (Pty) Limited, a wholly owned subsidiary of Astrapak Limited. East Rand
Plastics operates as a manufacturer of polyethylene flexible packaging materials and is
predominantly active in the production of refuse bags and bin liners.
The information disclosed in the annual report for the period ended 30 June 2015 has
not changed to date and remains provisional. For more detail refer to the Transpaco 2015
annual report, note 10.
From the date of acquisition to 31 December 2015, the East Rand Plastics business
contributed R82,6 million to group revenue and R5,8 million to profits after tax.
APPROVAL AND PREPARATION
These unaudited interim financial results have been prepared under the direction and
supervision of the Financial Director, L Weinberg CA (SA).
ON BEHALF OF THE BOARD
DJJ Thomas PN Abelheim L Weinberg
Non-executive Chairman Chief Executive Financial Director
DIRECTORS
DJJ Thomas (Chairman) PN Abelheim (Chief Executive); L Weinberg (Financial Director);
AJ Aaron*^; HA Botha*^; SR Bouzaglou; SI Jacobson*;
SP van der Linde (Lead Independent Director)*^ *non-executive ^independent
Date: 17 February 2016
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 Ltd
70 Marshall Street, Johannesburg
Website: www.transpaco.co.za
STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months % 6 months 12 months
R’000 Dec 2015 change Dec 2014 June 2015
Revenue 913 817 717 484 1 358 739
Turnover 912 532 27,4 716 178 1 356 025
Cost of sales (586 777) (476 431) (891 763)
Profit before operating costs
and depreciation 325 755 35,9 239 747 464 262
Operating costs (215 899) (165 784) (319 148)
Depreciation (20 530) (17 121) (34 967)
Operating profit 89 326 57,2 56 842 110 147
Finance income 1 285 1 306 2 714
Finance costs (3 218) (1 267) (2 480)
Profit before taxation 87 393 53,6 56 881 110 381
Taxation (24 593) (16 043) (31 095)
Profit for the period 62 800 53,8 40 838 79 286
Other comprehensive income – – –
Total comprehensive income 62 800 53,8 40 838 79 286
Weighted average ranking
number of shares in issue (’000) 32 978 32 198 32 323
Diluted weighted average ranking
number of shares in issue (’000) 33 022 32 707 32 388
Earnings per share (cents) 190,4 50,2 126,8 245,3
Diluted earnings per share (cents) 190,2 52,3 124,9 244,8
Headline earnings per share (cents) 190,6 50,4 126,7 243,3
Diluted headline earnings per share (cents) 190,3 52,6 124,7 242,8
Dividend per share (cents)* 52,0 52,9 34,0 108,0
Reconcilliation of headline earnings (R’000)
Basic earnings 62 800 40 838 79 286
Loss/(Profit) on disposal of property,
plant and equipment 48 (47) (636)
Headline earnings 62 848 54,1 40 791 78 650
*Dividend declared after the period
STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months 6 months 12 months
R’000 Dec 2015 Dec 2014 June 2015
ASSETS
Non-current assets 304 501 203 368 205 680
Property, plant and equipment 266 288 198 396 199 813
Intangibles 482 482 482
Goodwill 35 704 3 204 3 204
Deferred taxation 2 027 1 286 2 181
Current assets 529 067 445 765 523 763
Inventories 176 686 139 108 164 428
Trade and other receivables 333 187 247 581 202 635
Taxation receivable 3 634 3 502 3 100
Cash and cash equivalents 15 560 55 574 153 600
TOTAL ASSETS 833 568 649 133 729 443
EQUITY AND LIABILITIES
Capital and reserves 493 620 425 753 455 176
Issued share capital 328 323 328
Share premium 11 019 11 019 11 019
Other reserves 4 005 4 004 4 005
Distributable reserve 478 268 410 407 439 824
Non-current liabilities 118 947 46 795 50 424
Interest-bearing borrowings 82 815 16 926 18 598
Deferred income 7 648 5 163 7 639
Deferred taxation 28 484 24 706 24 187
Current liabilities 221 001 176 585 223 843
Trade payables and accruals 172 055 146 539 187 847
Provisions 28 338 19 260 23 379
Current portion of interest-bearing borrowings 19 379 10 186 11 484
Deferred income 870 504 1 131
Taxation payable 359 96 2
TOTAL EQUITY AND LIABILITIES 833 568 649 133 729 443
Number of shares in issue(‘000)
Number of shares (net of treasury shares) 32 821 32 197 32 337
Net movement in treasury shares 20 89 484
Ranking number of shares 32 841 32 286 32 821
Salient features
Net asset value per share (cents) 1 503 1 319 1 387
Operating margin % 9,8 7,9 8,1
Net interest-bearing debt: equity ratio % 17,6 Net cash Net cash
positive positive
STATEMENTS OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
R’000 Dec 2015 Dec 2014 June 2015
Cash flow from operating activities
Cash (utilised)/generated from operations (23 185) 6 283 144 772
Dividends paid (24 356) (17 505) (28 534)
Finance costs (3 218) (1 267) (2 480)
Finance income 1 285 1 306 2 714
Taxation paid (20 319) (11 892) (28 050)
Net cash (outflow)/inflow from operating activities (69 793) (23 075) 88 422
Cash flow from investing activities
Proceeds on disposal of property,
plant and equipment 784 330 1 290
Acquisition of business (109 651) – –
Expansion and replacement of property,
plant and equipment (31 492) (8 619) (28 023)
Proceeds from short-term receivables – 642 642
Net cash outflow from investing activities (140 359) (7 647) (26 091)
Cash flow from financing activities
Proceeds from borrowings 78 637 – 8 192
Repayment of borrowings (6 525) (5 059) (10 281)
Proceeds from share capital – – 1
Proceeds from treasury shares – 89 2 091
Net cash inflow/(outflow) from financing activities 72 112 (4 970) 3
Net movement in cash for the period (138 040) (35 692) 62 334
Cash and cash equivalents at the beginning
of the period 153 600 91 266 91 266
Cash and cash equivalents at the end of the period 15 560 55 574 153 600
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued Distri-
Share Share Other butable
R’000 Capital Premium Reserves Reserve Total
Balance at 30 June 2014 (audited) 322 11 019 3 856 386 986 402 183
Total comprehensive income – – – 40 838 40 838
Share-based payments – – 148 – 148
Dividend paid – – – (17 505) (17 505)
Inflow of treasury shares 1 – – 88 89
Balance at 31 December 2014 (unaudited) 323 11 019 4 004 410 407 425 753
Total comprehensive income – – – 38 448 38 448
Share-based payments – – 1 – 1
Dividend paid – – – (11 029) (11 029)
Share capital issued 1 – – – 1
Inflow of treasury shares 4 – – 1 998 2 002
Balance at 30 June 2015 (audited) 328 11 019 4 005 439 824 455 176
Total comprehensive income – – – 62 800 62 800
Dividend paid – – – (24 356) (24 356)
Balance at 31 December 2015 (unaudited) 328 11 019 4 005 478 268 493 620
CAPITAL COMMITMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
R’000 Dec 2015 Dec 2014 June 2015
Capital expenditure authorised and contracted
Property, plant and equipment 9 741 9 974 12 417
SEGMENTAL ANALYSIS
Paper Properties
Plastic and Board and Group
R’000 Product Products Services Total
Revenue – December 2015 665 281 247 285 1 251 913 817
Revenue to all customers 682 375 263 236 1 251 946 862
Less revenue to internal customers 17 094 15 951 – 33 045
Revenue – December 2014 484 639 231 594 1 251 717 484
Revenue to all customers 522 552 242 534 1 251 766 337
Less revenue to internal customers 37 913 10 940 – 48 853
Revenue – June 2015 898 727 457 435 2 577 1 358 739
Revenue to all customers 977 793 479 964 2 577 1 460 334
Less revenue to internal customers 79 066 22 529 – 101 595
Operating profit – December 2015 60 168 27 035 2 123 89 326
Operating profit – December 2014 28 676 25 188 2 978 56 842
Operating profit – June 2015 54 810 51 191 4 146 110 147
Profit before tax– December 2015 59 849 26 263 1 281 87 393
Profit before tax – December 2014 28 127 24 758 3 996 56 881
Profit before tax – June 2015 54 054 50 146 6 181 110 381
Capital expenditure – December 2015 22 467 6 321 2 704 31 492
Capital expenditure – December 2014 6 686 1 775 158 8 619
Capital expenditure – June 2015 14 880 12 783 360 28 023
Assets – December 2015 591 058 202 738 39 772 833 568
Assets – December 2014 417 795 175 668 55 670 649 133
Assets – June 2015 408 648 182 698 138 097 729 443
Liabilities – December 2015 226 223 83 931 29 794 339 948
Liabilities – December 2014 136 538 71 452 15 390 223 380
Liabilities – June 2015 160 827 95 210 18 230 274 267
Date: 17/02/2016 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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