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Provisional summarised audited financial statements for year ended 29 February 2016 and renewal of cautionary
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 summarised audited consolidated financial statements for the year ended 29 February 2016 and renewal
of cautionary announcement
CHARTING A NEW COURSE
Commentary
Key features of the year
- Refocused as a moulding and forming technologies-based packaging manufacturer
- Significant but costly footprint reorganisation complete
- Leading positions reinforced in target markets
- Capex on projects aligned with multinational customer contracts
- Net cash inflow of R176,6 million from continuing sales of non-core assets at fair values
- Improved average selling price per kilogram
- Gross contribution margin improves to 53,4% from 48,7%
- EBITDA of R116,1 million increased on a like-for-like basis and was higher in H2 than in H1
- Headline loss per share of 14,1 cents compared to a loss of 71,5 cents
Strategic perspective to the results
The focus this year has been a continuation from previous periods, being substantially exiting from non-core
businesses and surplus assets, beginning the process of eliminating expenses incurred to facilitate recovery and
executing on major projects aligned to the customer focus.
Intensified customer engagement has been a priority within the Group’s focus areas of personal care, toiletry, dairy,
spreads, catering, confectionary and automotive lubricants. While Astrapak has a leading market position, competitive
conditions have intensified with the entry of international companies to the local packaging market and some aggressive
pricing is evident from both local and international packagers. Being all things to all customers is simply not possible
and the timeliness of our restructuring initiatives is apparent at this tough time in the economy and with heightened
competitive pressure.
Trading conditions deteriorated further in the second half with negative political factors exacerbating an already
weak currency, elevating risk and borrowing costs, and dampening consumer and business confidence. Regional economies, to
which Astrapak has a small export exposure, are affected by sharply lower commodity prices. Volumes were soft but this
also partly reflected the change in mix.
Continuing operations made an operating profit of R44,3 million with the second half profit similar to that reported
in the first half. This is a somewhat disappointing outcome given that an improved second half was targeted and largely
due to the following factors:
- the Group continued to shoulder approximately R30 million in head office costs this past year that will not be a
permanent feature going forward;
- rationalisation and consolidation of factories continued through the year with approximately 28 machines relocated
from Gauteng to KwaZulu-Natal;
- the Bronkhorstspruit factory closed during February 2016 with assets moving to KwaZulu-Natal as did the adjacent
Weener deodorant ball factory, which was consolidated into JJ Precision;
- non-recurring expenses in the amount of R16 million relating to excess waste, catch-up maintenance, and relocation
costs were recorded;
- as indicated at the first half, major new projects with multi-year contracts are coming on stream later than envisaged
and although commissioned, the substantial investment in plant and equipment is yet to realise returns of any
significance in the reported numbers; and
- the head office in Johannesburg is in the process of closure with these responsibilities being transferred to Durban,
where the required structures have been established, and large savings will be realised.
Despite these challenges, the reorientation of the Group up the value chain is proceeding in line with the strategy
previously communicated to stakeholders.
Gross contribution margin for the year increased resulting in a margin improvement of 4,7%. Gross margin, after
accounting for factory overhead, also improved although repairs and maintenance expenses and other costs previously referred
to were higher than expected. Despite an 11,5% increase in the depreciation charge, a non-cash expense reflecting the
investment in major projects ahead of returns being realised, both gross profit and the gross profit margin increased.
Selling prices per kilogram increased on average by 3,1%. The Group is smoothly and effectively managing the ups and
downs of raw material pricing. Pricing, procurement coordination and demand forecasting continue to improve.
Overheads, excluding expenses deliberately incurred to facilitate the turnaround, are well controlled and declined
slightly.
Earnings before interest, tax and depreciation is higher on a like-for-like basis compared with 2015 and 6% higher in
the second half than in the first half.
Discontinued operations were once again a feature but are largely exiting the system. East Rand Plastics, Cinqpet, and
Knilam realised good value on exit. The sale of the remaining three flexible operations, whose performance has
improved, is carried over to the new financial year until conditions improve. Other assets held-for-sale, largely real estate,
are pending realisation. Operating costs of discontinued operations are carried until transfer, but the operations are
not generating operating losses.
Cash inflow from sales of businesses and assets disposed of totalled R176,6 million during the year.
Continuing revenue in 2016 was lower than in prior years, reflecting a deliberate customer shift and the effect of the now
discontinued PET operations in the base. Despite the lower revenue continuing EBITDA, adjusted to allow a like-for-like comparison,
is higher than in prior years and, as communicated previously, the medium-term aspiration is to achieve internationally
benchmarked returns for profits and capital employed.
Operational review
A mixed performance from the continuing operations with further work necessary to bring all operations up to targeted
performance. The reorganisation too has been disruptive in parts.
Continuing turnover decreased by 2,9% to R1 348,4 million with the decline a reflection of strategy and an exit from
business that cannot be justified on a return basis. If turnover is excluded from a now discontinued PET business which
was included in the comparative, then turnover is 4,8% higher than the prior year. This is regarded as a satisfactory
outcome given the quality and nature of the business being executed.
Tonnage of polymer converted decreased only slightly. Loadings were temporarily affected in the first half due to preparation
for the take-on of new work that started in the second half, indirect yoghurt cup exports to Angola declined and
there has been a delay in starting a new multi-year contract into which R55 million has been invested. This strategically
important multi-year contract in the personal care market, which was delayed due to design changes in product development
and technically demanding specifications, is now expected to come on stream formally in the first half of the 2017
financial year.
Astrapak commenced a further significant new multi-year supply agreement with an existing large multinational fast
moving consumer goods customer during the year. Capital spend of R81 million was committed to install capacity in line
with this and optimal volumes and profitability will be achieved in due course.
Astrapak has a number of multi-year contracts with significant local and international customers. Capacity associated
with the relocation of the Bronkhorstspruit plant to KwaZulu-Natal will be absorbed through commitments on asset
utilisation from the existing customer base. Astrapak now has fewer but larger customers and with this has achieved far
better line of sight on workflow.
Selling prices per kilogram improved by 3,1% on average as a result of a deliberate shift in mix. The average selling
price was R50,98 per kilogram compared with R49,45 per kilogram in the prior year.
The first half was a relatively stable period for raw material and product pricing but the second half coincided with
a substantial fall in US Dollar-based oil and gas prices combined with a major deterioration in the exchange rate of the
Rand against the US Dollar, leading to upward pressure on polymer prices in Rand.
During the first six months, the Rand averaged R12,28 to the US Dollar versus R10,61 in the first half of 2015 and
R11,30 during the second six months of the previous financial year. In the second half of 2016 the Rand averaged R14,74 to
the US Dollar, over a 30% differential compared with the second half of 2015. While there are timing differences in
pricing to customers, effective management of customer relationships, including contractual price adjustment mechanisms,
should ensure a broadly neutral effect through the cycle.
Capital expenditure of R124,0 million in continuing operations was strategically targeted to key customers and end
markets together with power supply upgrades, appropriate new equipment that customers have knowledge of internationally,
civil engineering and construction at factories, and relocation of existing equipment for technology focused production.
Earlier problems with electricity outages and load shedding have diminished and thus this disruptive feature has been
ameliorated. Due to the reorganisation and electricity saving initiatives, cost of energy and utilities increased by
only 3% in 2016 while energy usage per ton converted improved.
Independently verified audits of the Group’s environmental impacts compare well with plastic packaging peers. In water
and energy usage, tons of CO2e, plastic raw material converted, waste generation and air quality Astrapak has made good
progress and this is in line with what multinational customers expect.
According to independent third-party verification, Astrapak is a level 3 B-BBEE contributor across the seven elements.
Financial review
Group attributable loss of R3,9 million compares with a loss of R143,3 million. This equates to earnings per share
loss of 2,7 cents versus a loss per share of 114,4 cents.
Continuing operations recorded a loss of R17,8 million after investment income of R12,2 million, finance costs of
R35,0 million, tax of R14,9 million, payment of preference share dividends of R12,7 million and income attributable to
minorities of R11,8 million.
Headline adjustable items for continuing operations on a net basis came to R5,8 million and thus the continuing
headline loss of R12,0 million, equating to a loss of 9,9 cents per share.
Discontinued operations recorded a profit after interest and tax of R14,5 million. This included headline adjustable
items of R19,6 million on a net basis and therefore a headline loss of R5,1 million.
The headline loss attributable to ordinary shareholders of R17,1 million compares with R86,5 million. The headline
loss per share of 14,1 cents compares with 71,5 cents.
An impairment of R1,9 million, a profit on disposal of assets of R1,1 million and a profit on disposal of business of
R27,6 million is recorded and represent the only headline adjustments, other than the associated tax adjustment of
R13,1 million. The legacy situation insofar as the assets of the Group is concerned has been dealt with.
Costs associated with the turnaround are included in day-to-day expenses and remain with continuing operations. The
Group is targeting to have a rightsized overhead structure before the end of 2017.
Revenue from continuing operations was down by 2,9% to R1 348,4 million from R1 388,6 million. However, the prior year
included R102,5 million in revenue from the disposed Hilfort operation and so on a like-for-like basis revenue
increased by 4,8%.
Cost of sales decreased 4,5% to R1 046,9 million and includes the effect of higher factory depreciation, which increased
by 11,5% to R63,7 million, and higher factory labour and overheads. This also reflects the cost inefficiencies that
arose from machine moves. Cost of materials decreased by 11,7% to R629 million due to less waste, improved converting
efficiencies and a change in product mix. Therefore, the gross contribution increased by 6,3% to R719,4 million with the
margin of 53,4% better than the 48,7% in the prior year. Gross profit increased by 3,2% to R301,5 million with the gross
profit percentage improving to 22,4% from 21,0%.
Selling, distribution and administrative overheads decreased 0,5% to R259,3 million.
Other income of R2,1 million compares with R30,1 million in the prior year. This line item includes profits on assets
disposed of and various miscellaneous items such as DTI incentives. In the prior year R15,2 million was recorded as a
profit on the disposal of the Hilfort operation. In addition, there was a R4,3 million share option expense reversal
whereas in 2016 there was a R2,6 million expense.
EBITDA from continuing operations of R116,1 million compares with R127,4 million. In the prior year, Hilfort
contributed both the R15,6 million in profit on disposal and a further R5,6 million in EBITDA. Adjusting for Hilfort, the
IFRS share options, and a R3,3 million in profit on disposal of property, plant and equipment, EBITDA increased by 20,3% to
R119,1 million from an adjusted R99,0 million. The EBITDA percentage margin on a like-for-like basis increased to 8,8% from
7,1% therefore. A margin of 8,8% is below the medium term target of 12% to 15% to be attained once the major
projects are running as designed and excess costs associated with head office and the turnaround are eliminated.
The total depreciation charge for continuing operations increased to R71,9 million from R65,9 million. The depreciation
charge has increased to 5,3% of sales from 4,8% due to significant investments, with the book value of property, plant
and equipment increasing by 13,0% or R87,6 million over the year to R821,9 million.
Profit from continuing operations before exceptional items decreased by 28% to R44,3 million but increased by 42,5% to
R47,2 million if the non-recurring items of income and expenditure and other adjustments previously referenced are excluded from
the base.
Net finance costs of R22,7 million are up slightly from R21,0 million and this translates to an EBITDA interest cover
ratio of 5,1 times. Finance charges were higher than anticipated in the second half due to timing of asset disposals
while other asset disposals and cash received will only become effective in the new financial year. With capex now having
peaked interest charges will also reflect this going forward.
Cash generated from operations of R113,3 million compared with R37,1 million in the prior year and R12,7 million was
released from working capital in addition to the R59,0 million in the prior year.
Net trade working capital of R108,1 million compares with R99,8 million in the prior year. This is despite higher
inventory, up 34% to R174,6 million. This is due to strategically timed purchasing decisions ahead of price increases and
the build-up of buffer stocks in support of a service level agreement on a new key contract and in order to facilitate the
movement of machinery.
Net working capital of 29 days compares with 26 days on a continuing basis in line with the target of 30 days and is
well below levels in earlier years before the restructuring programme.
Net cash flow from operating activities, after interest, tax and preference share dividends was R55,7 million.
Net debt in continuing operations has fallen to R111,3 million from R192,8 million a year previously with the debt to
equity ratio at 10,9% compared with 19,1%. Net debt associated with asset held-for-sale is a further R59,1 million. The
face of the balance sheet indicates R269,2 million in net realisable assets associated with those assets classified as
held-for-sale and this will further improve the debt to equity position. The Group has substantial unused credit
facilities.
Capital expenditure of R132,5 million includes R8,5 million in discontinued operations. Capex in continuing operations
increased by 11,0% to R124,0 million and is in line with the higher budgeted level in 2016 as the Group invests in
partnership with major multinational customers in return for long-term contracts. Replacement capex will be in line with
depreciation within the next two years once the programme is complete.
The Group ended the year with total equity of R1 076,6 million which includes preference share capital net of costs of
R142,6 million. Goodwill is reflected at R61,5 million. Net asset value per share is 840 cents.
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
While the operating environment is challenging the Group anticipates realising accelerating returns from projects and
targeted cost reductions. A reasonable proportion of volume is based on multi-year contracts in relatively defensive
categories. Additional cash inflow is expected from remaining asset disposals.
Astrapak thanks its customers, suppliers, funders and shareholders for their support.
Changes to the Board
Vashnee Mahadeo resigned as Company Secretary with effect from 18 December 2015 and Salome Ratlhagane was appointed
into this role on the same date.
Share capital
There is no movement in authorised share capital for the period. The number of ordinary shares in issue is 135 131 000
and the weighted average number of ordinary shares in issue is 121 035 000 shares.
Shareholding
As at 29 February 2016, Coronation Asset Management Proprietary Limited and Regarding Capital Management Proprietary
Limited held 25,90% and 9,66% of Astrapak respectively. Lereko Metier Capital Growth Fund remains the largest single
shareholder with a 29,92% holding.
Statement of compliance and presentation
Refer to Note 1 - Basis of preparation in the summarised provisional consolidated financial statements for the statement
of compliance and presentation.
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
There are no significant subsequent events that have an impact on the audited financial information at 29 February
2016.
For and on behalf of the Board
Phumzile Langeni
Chairman
Robin Moore
Chief Executive
Manley Diedloff
Chief Financial Officer
Denver
19 April 2016
Summarised consolidated statement of comprehensive income
Audited Audited
financial year financial year
ended ended
% 29 February 28 February
(R’000) Notes change 2016 2015
Revenue 9 (2,9) 1 348 370 1 388 606
Cost of sales (1 046 890) (1 096 525)
Gross profit 3,2 301 480 292 081
Other items of income and expenditure 2 128 30 131
Distribution and selling overheads (104 330) (99 392)
Administrative and other expenses (154 989) (161 309)
Profit from operations before exceptional items (28,0) 44 289 61 511
Exceptional items 10 (12) (36 632)
Profit from operations 11 78,0 44 277 24 879
Investment income 12 266 13 372
Finance costs (34 976) (34 396)
Profit before taxation 459,5 21 567 3 855
Taxation expense (14 887) (14 891)
Profit/(loss) for the year from continuing operations 160,5 6 680 (11 036)
DISCONTINUED OPERATIONS
Profit/(loss) for the year from discontinued operations 12 113,0 14 508 (111 272)
Profit/(loss) for the year 117,3 21 188 (122 308)
Other comprehensive loss (not to be reclassified to profit and loss) (594) (4 813)
Total comprehensive income/(loss) for the year 116,2 20 594 (127 121)
Attributable to:
Ordinary shareholders of the parent (3 902) (143 309)
- Loss for the year from continuing operations (17 816) (27 224)
(Loss)/profit for the year from continuing operations before exceptional items (17 804) 9 408
Exceptional items (12) (36 632)
- Profit/(loss) for the year from discontinued operations 14 508 (111 272)
- Revaluation of land and buildings (net of tax) (594) (4 813)
Preference shareholders of the parent 12 718 10 890
Non-controlling interest 11 778 5 298
Total comprehensive profit/(loss) for the year 20 594 (127 121)
Loss per ordinary share 13 97,6 (2,7) (114,4)
- Continuing operations 34,7 (14,7) (22,5)
- Discontinued operations 113,1 12,0 (91,9)
Fully diluted loss per ordinary share (cents) 13 (2,7) (114,0)
- Continuing operations 34,4 (14,7) (22,4)
- Discontinued operations 113,1 12,0 (91,6)
Reconciliation of headline earnings
Audited Audited
financial year financial year
ended ended
% 29 February 28 February
(R’000) Notes change 2016 2015
Ordinary shareholders of the parent 97,6 (3 308) (138 496)
- Continuing operations (17 816) (27 224)
- Discontinued operations 14 508 (111 272)
Headline loss adjustments 13
- Impairment of property, plant and equipment 1 852 38 625
- Profit on disposal of property, plant and equipment (1 087) (2 677)
- Impairment of goodwill - 35 248
- Profit on disposal of business (27 663) (15 165)
- Total tax effect of adjustments 13 095 (4 035)
Headline loss attributable to ordinary shareholders (17 111) (86 500)
- Continuing operations (11 992) (2 509)
- Discontinued operations (5 119) (83 991)
Headline loss per ordinary share (cents) 13 80,3 (14,1) (71,5)
- Continuing operations (371,4) (9,9) (2,1)
- Discontinued operations 93,9 (4,2) (69,4)
Fully diluted headline loss per ordinary share (cents) 13 80,2 (14,1) (71,2)
- Continuing operations (371,4) (9,9) (2,1)
- Discontinued operations 93,9 (4,2) (69,1)
Summarised consolidated statement of financial position
Audited Audited
financial year financial year
ended ended
% 29 February 28 February
(R’000) Notes change 2016 2015
Assets
Non-current assets (5,0) 886 990 933 932
Property, plant and equipment 3 821 935 734 314
Goodwill 61 517 75 497
Deferred taxation assets 38 69 326
Investments and loans 4 3 500 54 795
Current assets (10,5) 521 555 472 038
Inventories 5 174 614 130 378
Accounts receivable 197 023 269 069
Investments and loans 19 599 -
Taxation receivable 2 262 2 577
Cash and cash equivalents 6 128 057 70 014
Assets classified as held-for-sale 7 431 962 688 569
Total assets (12,1) 1 840 507 2 094 539
Equity and liabilities
Total equity 0,2 1 076 644 1 074 575
Equity attributable to ordinary shareholders of the parent 874 368 867 771
Preference share capital and share premium 142 590 142 591
Non-controlling interest 59 686 64 213
Non-current liabilities (26,6) 252 062 343 324
Long-term interest-bearing debt 162 245 170 190
Deferred taxation liabilities 89 817 173 134
Current liabilities (12,3) 349 087 398 168
Trade and other payables and provisions 263 143 299 693
Shareholders for preference dividends 5 493 4 258
Short-term interest-bearing debt 76 765 91 450
Taxation payable 3 297 1 637
Bank overdrafts 6 389 1 130
Liabilities relating to assets held-for-sale 7 162 714 278 472
Total equity and liabilities (12,1) 1 840 507 2 094 539
Summarised consolidated statement of changes in equity
Audited Audited
financial year financial year
ended ended
29 February 28 February
(R’000) Notes 2016 2015
Opening balance 1 074 575 1 214 748
Comprising:
Ordinary share capital and premium 199 502 199 502
Retained income 664 221 795 090
Capital reserve 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
Movements:
Profit/(loss) for the year 21 188 (122 308)
Preference dividend (12 718) (10 890)
Contributions made by non-controlling interest (16 305) 1 274
Adjustment to fair value of put options - 904
Revaluation reserve 10 736 (4 813)
Share-based payment expense for the year (832) (4 340)
Closing balance 1 076 644 1 074 575
Comprising:
Ordinary share capital and premium 199 502 199 502
Retained income 672 243 664 221
Capital reserves 8 15 808 16 640
Revaluation reserve 134 262 134 856
Treasury shares (147 447) (147 447)
Equity attributable to ordinary shareholders of the parent 874 368 867 772
Preference share capital and premium 142 590 142 590
Non-controlling interest 59 686 64 213
Total equity 1 076 644 1 074 575
Summarised consolidated statement of cash flows
Audited Audited
financial year financial year
ended ended
% 29 February 28 February
(R’000) Notes change 2016 2015
Cash generated from operations before working capital changes 113 273 37 121
Decrease in working capital 12 741 59 041
Net interest and taxation paid (58 869) (50 146)
Net cash inflow from activities before distributions to shareholders 45,9 67 145 46 016
Dividend distribution to all shareholders (11 483) (10 654)
Net cash flow from operating activities 57,4 55 662 35 362
Capital expenditure (132 490) (162 851)
Net movement of investments, loans and non-controlling interest 37 520 9 563
Proceeds on disposal of businesses and property, plant and equipment 176 564 152 817
Net cash flow from investing activities 81 594 (471)
Net cash flow from financing activities (78 472) (28 287)
Net increase in cash and cash equivalents 58 784 6 604
Net cash and cash equivalents at beginning of the year 68 884 62 280
Net cash and cash equivalents at end of the year 6 85,3 127 668 68 884
Summarised consolidated segmental analysis
Total Discon-
continuing tinued Total
(R’000) Rigids** Flexibles* operations operations* group
Revenue for segment 2016 1 448 905 - 1 448 905 737 309 2 186 214
2015 1 515 248 - 1 515 248 1 155 265 2 670 513
Transactions with other operating segments of the Group 2016 (100 535) - (100 535) (35 510) (136 045)
2015 (126 642) - (126 642) (35 493) (162 135)
Revenue for external customers 2016 1 348 370 - 1 348 370 701 799 2 050 169
2015 1 388 606 - 1 388 606 1 119 772 2 508 378
Profit/(loss) from operations before exceptional items 2016 44 289 - 44 289 996 45 285
2015 61 511 - 61 511 (105 642) (44 131)
Total assets 2016 1 203 625 204 920 1 408 545 431 962 1 840 507
2015 1 158 094 247 876 1 405 970 688 569 2 094 539
Total liabilities 2016 431 213 169 936 601 149 162 714 763 863
2015 287 562 453 930 741 492 278 472 1 019 964
Capex 2016 123 975 - 123 975 8 515 132 490
2015 112 876 - 112 876 49 975 162 851
Depreciation 2016 71 860 - 71 860 - 71 860
2015 65 899 - 65 899 43 291 109 190
* As part of the Group’s strategy to discontinue the Flexibles Division, operations forming part of the Flexibles Division have been
reflected as discontinued operations.
** Corporate related income and expenses have all been included in the Rigids segment due to the Flexible segment being discontinued.
Supplementary information
Audited Audited
financial year financial year
ended ended
29 February 28 February
(R’000) 2016 2015
Number of ordinary shares in issue (’000) 135 131 135 131
Weighted average number of ordinary shares in issue (’000) 121 035 121 016
Fully diluted weighted average number of ordinary shares in issue (’000) 121 035 121 531
Number of preference shares in issue (’000) 1 500 1 500
Net asset value per share (cents) 840 835
Net tangible asset value per share (cents) 789 773
Closing share price (cents) 385 500
Market capitalisation (R million) 520 676
Net interest-bearing debt as percentage of equity (%) 10,9 19,1
Net debt 111 342 192 756
Long-term interest-bearing debt 162 245 170 190
Short-term interest-bearing debt 76 765 91 450
Cash and cash equivalents (128 057) (70 014)
Bank overdraft 389 1 130
Interest cover (before exceptional items) 2,0 2,9
Net working capital days 29 26
Contingent liabilities 4 373 6 571
Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) 119 076 99 013
- Continuing operations
Profit from operations before exceptional items 44 289 61 511
Net loss/(profit) on disposal of property, plant and equipment 362 (3 326)
Profit on disposal of business - (15 165)
IFRS 2 Share-based Payment expense/(income) 2 565 (4 340)
EBITDA earned by disposal business to date of sale - (5 566)
Depreciation 71 860 65 899
Notes
1. Basis of preparation
These summarised consolidated financial statements for the year ended 29 February 2016 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 and Financial Pronouncements as issued by Financial Reporting Standards Council and include
at a minimum the discolure as required by the Companies Act of South Africa and 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 29 February 2016. The auditors, Deloitte & Touche, have issued an unmodified audit opinion on the
complete consolidated and separate financial statements as well as these summarised consolidated financial statements.
A copy of the report and the Group consolidated and separate financial statements are available for
inspection at the Company’s registered office. 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 and on any forward looking statements. Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor’s engagement they should read the auditors obtain a copy of the
auditor’s report together with the accompanying financial information from the issuer’s registered office.
2. Discontinued operations
During the 29 February 2016 financial year, the following divisions of Astrapak Manufacturing Holdings were disposed of:
- Cinqpet
- East Rand Plastics
- Knilam Packaging
As at 29 February 2016 entities included in discontinued operations and assets classified as held-for-sale are as
follows:
Flexibles
Barrier Film Convertors Proprietary Limited (held-for-sale)
Coralline Investment Proprietary Limited (held-for-sale)
Flexibles divisions which are divisions of Astrapak Manufacturing Holdings Proprietary Limited
Peninsula Packaging (held-for-sale)
Rigids divisions which are divisions of Astrapak Manufacturing Holdings Proprietary Limited
Cinqplast Denver (discontinued)
Plastop Bronkhorstspruit (discontinued)
Audited Audited
financial year financial year
ended ended
29 February 28 February
2016 2015
(R’000)
3. Property, plant and equipment
Opening net carrying value 734 314 1 225 125
Additions 132 490 158 038
Classified as assets held-for-sale 23 674 (424 625)
Revaluation of properties 10 600 -
Disposals (7 283) (76 409)
Impairment - (38 625)
Depreciation (71 860) (109 190)
Closing net carrying value 821 935 734 314
Capital expenditure for the year 132 490 158 038
Classified as held-for-sale - 4 813
Capital commitments
- Contracted not spent 24 601 34 680
- Authorised not contracted 27 949 9 433
Property valuations
In determining the fair value of the property, given it is owner occupied and unencumbered by a lease, an
income capitalisation rate ranging from 10,25% to 12,00%.
For the purposes of this valuation, an average gross monthly rental of R30,48/m2 was applied on a through
rate basis, which is in line with statistics and opinions canvassed from brokers.
The following property expense elements were taken into account in the valuation:
- Rates and taxes
- Insurance
- Repairs and maintenance
Sundry expenses of 2,0% of gross income, which includes audit fees and leasing commission management fee
of 1,0% of gross income. This fee would be paid to an external management company to manage the property
on the owner’s behalf.
Audited Audited
financial year financial year
ended ended
29 February 28 February
(R’000) 2016 2015
4. Investments and loans
Vendor loan to Afripak Consumer Flexibles Proprietary Limited
in terms of Flexibles disposal transaction - 50 888
Consideration receivable from Mapflex Proprietary Limited on
disposal of Knilam Packaging 22 138 -
Vendor loan to Tadbik Pack SA Proprietary Limited on disposal
Alex White & Company operation 961 3 895
Unlisted investment - 12
Investments and loans and investments at end of the year 23 099 54 795
Classified as current assets 19 599 -
Classified as non-current assets 3 500 54 795
23 099 54 795
5. Inventories
Inventories of R942 (2015: R3 943) is carried at net realisable value.
6. Cash and cash equivalents
Cash and cash equivalents 128 057 70 014
Bank overdrafts (389) (1 130)
Net cash and cash equivalents at the end of the year 127 668 68 884
Audited Audited
financial year financial year
ended ended
29 February 28 February
2016 2015
(R’000)
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,
rationalised and discontinued.
Assets classified as held-for-sale and the liabilities associated with
assets held-for-sale consist of the assets including the related
properties and liabilities of the following entities:
Flexibles
Barrier Film Convertors Proprietary Limited (held-for-sale)
Coralline Investment Proprietary Limited (held-for-sale)
Flexibles divisions which are divisions of Astrapak Manufacturing
Holdings Proprietary Limited
Peninsula Packaging (discontinued)
Rigids which are divisions of Astrapak Manufacturing Holdings
Proprietary Limited
Cinqplast Denver (discontinued)
Plastop Bronkhorstspruit (discontinued)
Assets held-for-sale/sold consist of the following:
Opening balance as at 1 March 688 571 32 098
Property, plant and equipment 7 497 429 438
Devaluation of property - (4 813)
Inventory (10 757) 93 458
Accounts receivable (32 821) 143 168
Deferred tax assets (8 316) 20 320
Assets previously held-for-sale disposed as part of a disposal of business (158 710) -
Assets previously held-for-sale transferred to property, plant and equipment (31 172) -
Assets previously classified as held-for-sale disposed of or impaired (22 330) (25 100)
Assets held-for-sale at the end of the year 431 962 688 569
Liabilities relating to assets held-for-sale consists of the following:
Opening balance as at 1 March 278 472 12 971
Interest-bearing debt (55 842) 101 984
Accounts payable (22 263) 153 742
Deferred tax liability (7 258) 9 775
Liabilities previously classified as held-for sale disposed as part of disposal
of business (30 395) -
Liabilities relating to assets held-for-sale at the end of the year 162 714 278 472
Audited Audited
financial year financial year
ended ended
29 February 28 February
2016 2015
(R’000)
8. Capital reserve
The Company recognised a total (expense)/income of (R0,832 million),
2015: R4 340 million relating to equity-settled
share-based payments.
9. Revenue - continuing operations
Revenue for the Group 1 448 905 1 515 248
Transactions with other entities in the Group (100 535) (126 642)
Revenue for external customers 1 348 370 1 388 606
10. Exceptional items - continuing operations
Impairment of goodwill - (35 248)
Impairment of property, plant and equipment - (1 384)
Impairment of investment (12) -
Exceptional items (12) (36 632)
11. Profit from operations - continuing operations
Profit from continuing operations are arrived at after taking the
following into account:
Net loss/(profit) on disposal of property, plant and equipment 362 (3 326)
Profit on disposal of business - (15 165)
Depreciation 71 860 65 899
IFRS 2 Share-based Payment expense 2 565 (4 340)
(R’000) Audited Audited
financial year financial year
ended ended
29 February 28 February
2016 2015
12. Profit/(loss) for the year from discontinued operations
Revenue 701 799 1 119 772
Cost of sales (620 032) (1 015 934)
Gross profit 81 767 103 838
Other income 12 712 5 855
Distribution and selling costs (61 442) (109 109)
Administration and other operating expenses (32 041) (106 226)
Profit/(loss) from operations before exceptional items from
discontinued operations 996 (105 642)
Exceptional items 23 858 (37 241)
Profit/(loss) from operation for discontinued operations 24 854 (142 883)
Investment income 1 032 1 325
Finance costs (6 787) (12 984)
Profit/(loss) before taxation from discontinued operations 19 099 (154 542)
Taxation (4 591) 43 270
Profit/(loss) after taxation from discontinued operations 14 508 (111 272)
Net cash flows incurred by discontinued operations for the
year are represented below:
Operating cash inflow/(outflow) 306 361 (32 705)
Investing cash inflow/(outflow) 8 683 (42 078)
Financing cash (outflow)/inflow (397 854) 82 887
Net (decrease)/increase in cash and cash equivalents from
discontinued operations (82 810) 8 104
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 that 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 that the
headline loss were 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
No facts or circumstances material to the appreciation of this report has occurred between 29 February 2016
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*, T V Mokgatlha*
*Non-executive
Company Secretary:
S Ratlhagane
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 Proprietary Limited
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
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to Astrapak’s cautionary announcement of 4 March 2016 in which shareholders were advised
that Astrapak had entered into negotiations, which, if successfully concluded, may have a material effect on the price of
the Company’s shares.
Shareholders are advised to continue exercising caution when dealing in the Company’s securities until a further
announcement is made.
Sandton
20 April 2016
Date: 20/04/2016 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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