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Condensed unaudited interim results for the six months ended 31 August 2016 and renewal of cautionary announcement
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")
CONDENSED UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2016 AND RENEWAL
OF CAUTIONARY ANNOUNCEMENT
COMMENTARY
Key features of the period from continuing operations
- Revenue increases by 15,2% to R734,3 million
- Profit from operations increases by 25,4% to R27,6 million
- Underlying operating performance in Q2 was 49% higher than in Q1
- After tax profit increases by 65,6% to R9,9 million
- Headline loss per share reduces by 26,6% to 4,7 cents
- Debt-to-equity ratio 12,4%
- Net realisable value of assets held-for-sale R300,8 million
- Major personal care and FMCG contracts commercialising
- Average selling price per kilogram improves by 8%
OPERATIONAL REVIEW
The Group has substantially exited non-core businesses and surplus assets and has been methodically eliminating
high corporate costs deliberately incurred in line with the long-term strategy.
With the new production structure in place, the focus has turned to a Group operations improvement plan to ensure
commonality in process, measurement, resource planning and communications. Better wastage and stock loss metrics are
being recorded. The business development pipeline of new sales opportunity is reviewed monthly.
During the period, the head office in Johannesburg closed. A support structure appropriately resourced for a Group
of nine operations rather than 26 has been set up in Durban. Significant overhead savings are to be realised as a
result of the move in the head office. The Group is on track to eliminate approximately R30 million on an annualised
basis in corporate costs associated with the long-term strategy by February 2017, as previously communicated.
Astrapak achieved a level 4 broad-based black economic empowerment rating in its annual audit in May, a level that
compares favourably to the previous level 3 in view of the revised criteria.
Against a weak macroeconomic backdrop, trading conditions remained difficult. Competitor activity has intensified with
very keen pricing evident to either retain contracts or win business from rivals. The Group has responded appropriately
to the intensified competitive dynamics of the market and there is no deviation in Group strategy nor are major
projects affected or return objectives altered.
Revenue has begun to reflect the benefits of the rationalisation and incremental contribution from major projects.
A strong real increase in revenue accompanied by improved volume is the result of strong customer relationships across
a much narrower but clearly defined technology footprint and the benefit of new projects that have been commissioned
and are beginning to commercialise to expectation.
Electrical power upgrades at the JJ Precision factory are complete to accommodate further future expansion.
A multi-year personal care contract with a leading multinational customer, for which technically demanding
specifications and production complexity is required, came on stream at the end of the reporting period and will reflect
fully in the second half of the year. This project was allocated R55 million in capex.
A further significant contract with a leading fast moving consumer goods customer, in which R81 million was invested,
is now producing as expected and to customer satisfaction. Mould maintenance and rehabilitation, which form part of the
project, will have substantially reduced wastage rates on the production line and enhance manufacturing efficiency.
Machines relocated from Gauteng to KwaZulu-Natal in the early part of the reporting period are now consolidated into
the designated sites and are committed to production for a variety of personal care market customers. Significant safety
stock was built leading up to the transfer and so the benefit of these moves only came through in the second quarter.
Astrapak's three largest markets as a proportion of sales are now food, personal care and toiletry, and automotive.
These sales categories are relatively resistant to poor economic conditions and benefit from growing urbanisation and
investment by government in bulk infrastructure and sanitation. The Group has good visibility on future workflow.
The three remaining flexible operations, classified as held-for-sale, are performing well and ahead of budget.
Tonnage of polymer converted in our continuing rigid plastic packaging operations increased by 3% to 14 442 tons with
the mix favouring moulding technology production where volumes converted increased by 6%. Moulding accounted for 60% of
polymer converted with thermoforming operations accounting for the balance.
Selling prices per kilogram improved by 8% on average, a function of mix and price recovery. The average selling price
was R55,27 per kilogram compared with R51,07 per kilogram.
The Group continues to get better at procurement coordination and demand forecasting. Key account management is an
important part of this process.
The oil price in US Dollar though was in a consistent upward trend from the beginning of the financial year, going
from US$30/bbl to just below US$50/bbl at the end of August. Polymer prices too have firmed. At the same time, the Rand
has been extremely volatile but with a weakening bias. Consequently, raw material prices in Rand have been variable
within shorter periods than is normally experienced. Pricing adjustments are typically quarterly and this variability
accentuates contract price adjustment lags.
During the six months, the Rand averaged R14,76 to the US Dollar versus R12,28. This 20% differential mask the fact
that the Rand in the comparative period was broadly stable month-to-month whereas in the period under review there was
currency volatility.
FINANCIAL REVIEW
Revenue from continuing operations increased by 15,2% to R734,3 million from R637,6 million. The comparative had no
further revenue from the now disposed of Hilfort operation and therefore this is a like-for-like outcome.
Cost of sales increased 15,5% to R569,6 million and includes higher factory depreciation, which increased by 4,0% to
R33,7 million, and higher factory labour and overheads.
The gross contribution margin of 54% for the period reflects favourably on the comparative 55% given that the cost of
materials increased by more than recorded revenue, a function of both a weak and volatile Rand and higher Dollar prices
together with the slight lag in recoveries mentioned above.
Gross margin, after accounting for factory overhead, was 27% compared with 27,5% for the comparative period. This was
despite the fact that direct factory labour included the impact of higher annual wages from July.
Gross profit increased by 14,0% to R164,7 million with the gross profit percentage of 22,4% compared to 22,7%.
Selling, distribution and administrative overheads increased 10,5% to R138,9 million.
Overhead remains a focus for tight control. Retrenchment costs are included in expenses for this period together with
the annual wage increase for two months. Cost associated with the restructuring this past three years is included in
day-to-day expenses within continuing operations. The Group is on track to achieve the right proportional overhead
structure by the end of this financial year.
The Group depreciation charge increased by 6,5% to R36,7 million and continues to reflect investment in major
projects. However, depreciation fell to 5,0% of sales from 5,4%. This is in line with previous guidance that the
depreciation charge would stabilise and then fall as a percentage of sales as the Group grows revenue from new
contracts and winds down the investment programme backing those contracts.
Other income of R1,8 million, versus R3,2 million in the prior period, includes a lower DTI incentive, a small loss on
disposal of fixed assets, and R0,9 million in share option and share appreciation rights expenses.
EBITDA from continuing operations of R64,3 million compares with R56,4 million in the comparative period, an increase
of 13,9%. From an underlying operating performance point of view, the second quarter result exceeded that of the first
quarter by 49%.
The EBITDA percentage margin was stable at 8,8% and is below the medium-term target of 12% to 15% targeted once the
major projects are running as designed and excess costs eliminated. Initial contributions from the two major personal
care and FMCG contracts show that this target is realistic.
There are no exceptional items and this is in line with previous guidance that legacy issues have been dealt with.
Profit from continuing operations increased by 25,4% to R27,6 million with the operating margin improving to 3,8% from
3,4%. Operating margins of 7% to 10% are targeted, proportionate to the EBITDA target.
Finance costs of R19,5 million are 13,1% higher and reflect higher interest rates during the period and a higher
average net debt situation compared with the prior period. This is also a function of the timing of asset disposals and
capital expenditure scheduling. Net finance costs of R14,3 million translates to an EBITDA interest cover ratio of 4,5x.
The tax charge reduced by 26,4% to R3,5 million with the effective tax rate at 25,9% compared with 44,0%. The tax rate
is now normalising, having been abnormally high due to the effect of capital gains on significant disposals and
disallowable expenses. Realisation of proceeds from assets held-for-sale in the second half will however attract
capital gains tax thus inflating the effective rate but this will be reversed for headline earnings calculation purposes.
After tax profit increased by 65,6% to R9,9 million.
Preference share dividends, which are linked to prime rate of interest, increased by 11,1% to R8,0 million from
R7,2 million.
Minorities share of profits reduced slightly to R6,9 million from R7,2 million. The Group has a 60% interest in
Marcom, producing thin wall injection moulded products, a 50/50 joint venture with Weener, for the production of
injection moulded hollow deodorant bottle balls, and it has a 74% interest in Plusnet Geotex, which produces
agricultural netting and fibres for concrete reinforcement.
An attributable loss of R5,0 million from continuing operations is 40,7% lower than the comparative period loss
of R8,5 million. This equates to a loss per share of 4,1 cents versus a loss per share of 7,0 cents.
Discontinued operations recorded a profit after interest and tax of R0,6 million. This included exceptional items
of R10,5 million on a net basis and therefore a headline profit of R11,1 million.
The headline loss attributable to ordinary shareholders of R5,6 million is 27,6% less than the R7,8 million in the
comparative period. The headline loss per share of 4,7 cents compares with 6,4 cents.
Cash generated from operations before working capital changes increased by 24,9% to R80,5 million. Working capital
absorbed R22,1 million compared with a release from working capital of R49,4 million in the previous half year.
This is due in part to higher raw material costs and currency volatility and to natural growth in the business, with
revenue growing by over 15%.
Inventory, carried at net realisable value, grew by 29,9% and was also affected by purchasing decisions to mitigate
price increases, buffer stock associated with the machinery relocation from Gauteng and a build-up of opening inventories
for the personal care contracts which are now being commercialised.
However, net trade working capital of R119,7 million was only 13,6% higher and net working capital days was marginally
lower at 29,8 days compared to 30,2 days and in line with the target of 30 days.
Net cash flow from operating activities, after interest, tax and preference share dividends was R22,6 million.
Capital expenditure consumed R40,9 million and with the investment in partnership with major multinational customers
in return for long-term contracts having reached a peak in this period, replacement capex will now approximate
depreciation going forward.
Net debt in continuing operations is R125,7 million with the debt-to-equity ratio at 12,4%. Debt associated with asset
held-for-sale is a further R33,3 million. The Group has substantial unused credit facilities.
Net realisable value of assets classified as held-for-sale is R300,8 million and when realised will result in the
Group enjoying a net cash position. Properties associated with the businesses of Barrier Film Convertors and Peninsula
Packaging have already been sold for R49,6 million, a premium to book value of R6,2 million, and this will reflect
in the year-end results. Other surplus properties are subject to processes with potential new owners.
The Group ended the period with total equity of R1 057,0 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 837 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
Astrapak has produced an improved interim result and is budgeting for a substantially better second half,
reflective of a continuation of the level of performance achieved in the second quarter. Returns from major
projects have begun to manifest and are expected to accelerate. Costs at the centre have been reduced and
will fall further. The financial position is sound with the debt-to-equity ratio only 12%, which excludes
the near-cash implicit in the net realisable value of assets held-for-sale.
The forecast financial information contained herein has not been reviewed and reported on by the Company's auditors.
Astrapak thanks all its stakeholders for their continued support.
CHANGES TO THE BOARD
There are no changes to the Board subsequent to publication of the year-end results.
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 period close, Coronation Asset Management and Sanlam Investment Management held 24,7% and 8,0% of Astrapak
respectively. Lereko Metier Capital Growth Fund remains the largest single shareholder with a 29,92% holding.
STATEMENT OF COMPLIANCE AND PRESENTATION
The condensed consolidated interim financial statements are prepared in accordance with the requirements of the JSE
Limited Listings Requirements for interim reports, and the requirements of the Companies Act applicable to financial
statements. The Listings Requirements require interim reports to be prepared in accordance with, IAS 34 Interim
Financial Reporting and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
the Financial Pronouncements as issued by the Financial Reporting Standards Council. The accounting policies applied
in the preparation of the condensed consolidated interim financial statements were derived in terms of International
Financial Reporting Standards and are consistent with those accounting policies applied in the preparation of the
previous consolidated financial statements.
The amounts disclosed are not audited or reviewed by the auditors.
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, Group 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 unaudited financial information at
31 August 2016.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement released on the Stock Exchange News Service on
21 January 2016 and to the renewal of cautionary announcements released on 4 March 2016, 20 April 2016,
3 June 2016, 8 July 2016 and 23 August 2016 ("announcements").
Shareholders are advised that the negotiations referred to in the announcements remain ongoing and, if successfully
concluded, may have a material effect on the price of the Company's shares.
Shareholders are therefore advised to continue exercising caution when dealing in the Company's securities, until a
further announcement is made.
For and on behalf of the Board
Phumzile Langeni
Chairman
Robin Moore
Chief Executive
Manley Diedloff
Chief Financial Officer
Sandton
29 September 2016
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
% 31 August 31 August 29 February
(R'000) Notes change 2016 2015 2016
Revenue 9 15,2 734 272 637 644 1 348 370
Cost of sales (569 619) (493 209) (1 046 890)
Gross profit 14,0 164 653 144 435 301 480
Administrative and other expenses (79 388) (73 626) (154 989)
Distribution and selling costs (59 476) (52 066) (104 330)
Other items of income and expenditure 1 777 3 242 2 128
Profit from operations before
exceptional items 25,4 27 566 21 985 44 289
Exceptional items 10 - - (12)
Profit from operations 11 25,4 27 566 21 985 44 277
Investment income 5 298 5 938 12 266
Finance costs (19 547) (17 283) (34 976)
Profit before taxation 25,2 13 317 10 640 21 567
Taxation expense (3 447) (4 681) (14 887)
Profit for the period from continuing operations 65,6 9 870 5 959 6 680
DISCONTINUED OPERATIONS
Profit for the period from discontinued operations 12 (97,9) 601 28 554 14 508
Profit for the period (69,7) 10 471 34 513 21 188
Other comprehensive loss (not to be reclassified
to profit or loss) (2 193) - (594)
Total comprehensive profit for the period (76,0) 8 278 34 513 20 594
Attributable to:
Ordinary shareholders of the parent (6 604) 20 105 (3 902)
- Loss for the period from continuing operations (5 012) (8 449) (17 816)
Loss for the period from continuing operations
before exceptional items (5 012) (8 449) (17 804)
Exceptional items - - (12)
- Profit for the period from discontinued operations 601 28 554 14 508
- Revaluation of land and buildings (net of tax) (2 193) - (594)
Preference shareholders of the parent 8 028 7 223 12 718
Non-controlling interest 6 854 7 185 11 778
Total comprehensive profit for the period 8 278 34 513 20 594
(Loss)/profit per ordinary share 13 (121,7) (3,6) 16,6 (2,7)
- Continuing operations 40,8 (4,1) (7,0) (14,7)
- Discontinued operations (97,9) 0,5 23,6 12,0
Fully diluted (loss)/profit per ordinary share (cents) 13 ( 121,7) (3,6) 16,6 (2,7)
- Continuing operations 40,8 (4,1) (7,0) (14,7)
- Discontinued operations (97,9) 0,5 23,6 12,0
RECONCILIATION OF HEADLINE EARNINGS
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
% 31 August 31 August 29 February
(R'000) Notes change 2016 2015 2016
Ordinary shareholders of the parent (121,9) (4 411) 20 105 (3 308)
- Continuing operations (5 012) (8 449) (17 816)
- Discontinued operations 601 28 554 14 508
Headline profit/(loss) adjustments
- Impairment of property, plant and equipment 8 329 - 1 852
- Loss/(profit) on disposal of
property, plant and equipment 5 568 (3 344) (1 087)
- Profit on disposal of business - (32 500) (27 663)
- Total tax effect of adjustments (4 015) 7 897 13 095
Headline profit/(loss) attributable
to ordinary shareholders 5 471 (7 842) (17 111)
- Continuing operations (5 630) (7 773) (11 992)
- Discontinued operations 11 101 (69) (5 119)
Headline profit/(loss) per
ordinary share (cents) 13 169,2 4,5 (6,5) (14,1)
- Continuing operations 26,6 (4,7) (6,4) (9,9)
- Discontinued operations 9 300,0 9,2 (0,1) (4,2)
Fully diluted headline profit/(loss)
per ordinary share (cents) 13 169,2 4,5 (6,5) (14,1)
- Continuing operations 26,6 (4,7) (6,4) (9,9)
- Discontinued operations 9 300,0 9,2 (0,1) (4,2)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
% 31 August 31 August 29 February
(R'000) Notes change 2016 2015 2016
Assets
Non-current assets (1,4) 847 843 860 300 886 990
Property, plant and equipment 3 782 826 737 537 821 935
Goodwill 61 517 69 497 61 517
Deferred taxation assets - - 38
Investments and loans 4 3 500 53 266 3 500
Current assets 6,0 567 512 535 504 521 555
Inventories 5 215 592 165 986 174 614
Accounts receivable 242 303 237 549 197 023
Investments and loans - - 19 599
Taxation receivable 1 459 3 003 2 262
Cash and cash equivalents 6 108 158 128 966 128 057
Assets classified as held-for-sale 7 402 907 514 306 431 962
Total assets (4,8) 1 818 262 1 910 110 1 840 507
Equity and liabilities
Total equity (4,2) 1 057 042 1 103 009 1 076 644
Equity attributable to ordinary
shareholders of the parent 870 196 887 877 874 368
Preference share capital and share premium 142 590 142 590 142 590
Non-controlling interest 44 256 72 542 59 686
Non-current liabilities 0,9 227 706 225 767 252 062
Long-term interest-bearing debt 150 075 125 049 162 245
Deferred taxation liabilities 77 631 100 718 89 817
Current liabilities 16,0 431 445 371 879 349 087
Trade and other payables 338 186 298 132 263 146
Shareholders for preference dividends 6 943 6 211 5 493
Short-term interest-bearing debt 83 794 67 145 76 765
Taxation payable 2 522 - 3 297
Bank overdrafts 6 - 391 389
Liabilities relating to assets held-for-sale 7 102 069 209 455 162 714
Total equity and liabilities (4,8) 1 818 262 1 910 110 1 840 507
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) Notes 2016 2015 2016
Opening balance 1 076 644 1 074 575 1 074 575
Comprising:
Ordinary share capital and premium 199 502 199 502 199 502
Retained income 672 243 664 221 664 221
Capital reserve 8 15 808 16 640 16 640
Revaluation reserve 134 262 134 856 134 856
Treasury shares (147 447) (147 447) (147 447)
Equity attributable to ordinary shareholders of the parent 874 368 867 772 867 772
Preference share capital and premium 142 590 142 590 142 590
Non-controlling interest 59 686 64 213 64 213
Movements:
Profit for the period 10 471 34 513 21 188
Preference dividend paid (8 028) (7 223) (12 718)
Net reduction in non-controlling interest (22 284) 1 144 (16 305)
Reclassification from revaluation reserve to retained income 2 700 - -
Revaluation reserve (2 193) - 10 736
Share-based payment expense for the period (268) - (832)
Closing balance 1 057 042 1 103 009 1 076 644
Comprising:
Ordinary share capital and premium 199 502 199 502 199 502
Retained income 670 532 684 326 672 243
Capital reserve 8 15 540 16 640 15 808
Revaluation reserve 132 069 134 856 134 262
Treasury shares (147 447) (147 447) (147 447)
Equity attributable to ordinary shareholders of the parent 870 196 887 877 874 368
Preference share capital and premium 142 590 142 590 142 590
Non-controlling interest 44 256 72 542 59 686
Total equity 1 057 042 1 103 009 1 076 644
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
% 31 August 31 August 29 February
(R'000) Notes change 2016 2015 2016
Cash generated from operations
before working capital changes 24,9 80 540 64 485 113 273
(Increase)/decrease in working capital (22 121) 49 372 12 741
Net interest and taxation paid (29 196) (26 634) (58 869)
Net cash inflow from activities
before distributions to shareholders (66,5) 29 223 87 223 67 145
Dividend distribution to all shareholders (6 578) (5 272) (11 483)
Net cash inflow from operating activities (72,4) 22 645 81 951 55 662
Capital expenditure (40 924) (39 963) (132 490)
Net movement of investments,
subsidiaries and non-controlling interests (2 684) 2 674 37 520
Proceeds on disposal of property,
plant and equipment 39 877 124 546 176 564
Net cash (outflow)/inflow from
investing activities (3 731) 87 257 81 594
Net cash outflow from financing
activities (38 424) (109 517) (78 472)
Net (decrease)/increase in
cash and cash equivalents (19 510) 59 691 58 784
Net cash and cash equivalents
at beginning of the period 127 668 68 884 68 884
Net cash and cash equivalents
at end of the period 6 (15,9) 108 158 128 575 127 668
CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
Total Discon-
continuing tinued Total
(R'000) Rigids** Flexibles operations operations* Group
Revenue for segment 2016 792 169 - 792 169 242 998 1 035 167
2015 724 132 - 724 132 439 874 1 164 006
Transactions with other
operating segments of the Group 2016 (57 897) - (57 897) (3 436) (61 333)
2015 (86 488) - (86 488) (8 853) (95 341)
Revenue for external customers 2016 734 272 - 734 272 239 562 973 834
2015 637 644 - 637 644 431 021 1 068 665
Profit from operations before
exceptional items 2016 27 566 - 27 566 10 456 38 022
2015 21 985 - 21 985 7 313 29 298
Total assets 2016 1 320 912 94 443 1 415 355 402 907 1 818 262
2015 1 153 744 242 060 1 395 804 514 306 1 910 110
Total liabilities 2016 623 136 36 015 659 151 102 069 761 220
2015 296 466 301 180 597 646 209 455 807 101
Capex 2016 36 266 - 36 266 4 658 40 924
2015 27 819 12 144 39 963 - 39 963
Depreciation 2016 36 704 - 36 704 - 36 704
2015 34 460 - 34 460 - 34 460
* As part of the Group's strategy to discontinue the operations forming part of the Flexibles Division
and rationalise the Rigids Division, operations forming part of the Flexibles Division which have been
discontinued and classified as held-for-sale have been reflected as discontinued operations.
** Corporate-related income and expenses have all been included in the Rigids segment due to the Flexibles
segment being discontinued.
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) 2016 2015 2016
Number of ordinary shares in issue ('000) 135 131 135 131 135 131
Weighted average number of ordinary
shares in issue ('000) 121 035 121 036 121 035
Fully diluted weighted average number
of ordinary shares in issue ('000) 121 035 121 036 121 035
Number of preference shares in issue ('000) 1 500 1 500 1 500
Net asset value per share (cents) 837 851 840
Net tangible asset value per share (cents) 786 794 789
Closing share price (cents) 400 390 385
Market capitalisation (R million) 541 527 520
Net interest-bearing debt as percentage of equity (%) 12,4 6,2 10,9
Net debt 125 711 63 619 111 342
Long-term interest-bearing debt 150 075 125 049 162 245
Short-term interest-bearing debt 83 794 67 145 76 765
Cash and cash equivalents (108 158) (128 966) (128 057)
Bank overdraft - 391 389
Interest cover (before exceptional items) 1,9 1,9 2,0
Net working capital days 30 30 29
Contingent liabilities 6 965 6 971 4 373
Earnings before interest, taxation,
depreciation and amortisation ("EBITDA")
- continuing operations 64 270 56 445 119 076
Profit from operations before exceptional items 27 566 21 985 44 289
Net (profit)/loss on disposal of property,
plant and equipment (686) (261) 362
IFRS 2 Share-based Payment expense and
share appreciation rights expense 922 - 2 565
Depreciation 36 704 34 460 71 860
NOTES
1. Basis of consolidation
The condensed consolidated interim financial statements are prepared in accordance with the requirements
of the JSE Limited Listings Requirements for interim reports, and the requirements of the Companies Act
applicable to financial statements. The Listings Requirements require interim reports to be prepared
in accordance with, IAS 34 Interim Financial Reporting and the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and the Financial Pronouncements as issued by the
Financial Reporting Standards Council. The accounting policies applied in the preparation of the
condensed consolidated interim financial statements were derived in terms of International Financial
Reporting Standards and are consistent with those accounting policies applied in the preparation of the
previous consolidated financial statements. This report was compiled under the supervision of Manley Diedloff,
Group 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 annual
financial statements for the year ended 29 February 2016.
2. Comparative figures
As at 29 February 2016 entities included in discontinued operations and assets classified as held-for-sale
are as follows:
Master Plastics Proprietary Limited
Flexibles
Barrier Film Convertors Proprietary Limited (held-for-sale)
Coralline Investment Proprietary Limited (held-for-sale)
Flexible divisions which are divisions of Master Plastics Proprietary Limited
Peninsula Packaging (held-for-sale)
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) 2016 2015 2016
3. Property, plant and equipment
Opening net carrying value 821 935 734 314 734 314
Additions 40 924 39 963 132 490
Classified as assets held-for-sale (42 931) - 23 674
Revaluation of properties - - 10 600
Disposals (398) (2 280) (7 283)
Depreciation (36 704) (34 460) (71 860)
Closing net carrying value 782 826 737 537 821 935
Capital expenditure for the period 40 924 39 963 132 490
Capital commitments
- Contracted not spent 33 690 89 059 24 601
- Authorised not contracted 2 270 45 795 27 949
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.
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) 2016 2015 2016
4. Investments and loans
Vendor loan to Afripak Consumer
Flexibles
Proprietary Limited in terms of
Flexibles disposal transaction - 50 999 -
Consideration receivable from
Mapflex Proprietary Limited on
disposal of Knilam Packaging 3 500 - 22 138
Vendor loan to Tadbik Pack SA Proprietary
Limited on the disposal Alex White & Company - 2 255 961
Unlisted investment - 12 -
Investments and loans as at the
end of the period 3 500 53 266 23 099
Classified as current assets - - 19 599
Classified as non-current assets 3 500 53 266 3 500
3 500 53 266 23 099
5. Inventories
Inventories of R221 (February 2016: R942)
is carried at net realisable value.
6. Cash and cash equivalents
Cash and cash equivalents 108 158 128 966 128 057
Bank overdrafts - (391) (389)
Net cash and cash equivalents at
the end of the period 108 158 128 575 127 668
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) 2016 2015 2016
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.
Assets classified as held-for-sale
and liabilities associated with assets
held-for-sale consist of the assets
including the related properties and
liabilities of the following entities:
Master Plastics Proprietary Limited
Flexibles
Barrier Film Convertors Proprietary Limited
Coralline Investment Proprietary Limited
Flexible divisions which are divisions
of Master Plastics Proprietary Limited
Peninsula Packaging
Opening balance at the beginning
of the period 431 962 688 569 688 571
Property, plant and equipment 43 802 - 7 497
Inventory 9 931 - (10 757)
Accounts receivable (29 090) - (32 821)
Deferred taxation assets (61) 158 (8 316)
Assets previously held-for-sale
disposed as part of a disposal of business - (174 421) (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 (53 637) - (22 330)
Assets held-for-sale at the end of the period 402 907 514 306 431 962
Liabilities relating to assets held-for-sale
consist of the following:
Opening balance as at the
beginning of the period 162 714 278 472 278 472
Interest-bearing debt (33 280) - (55 842)
Trade creditors (28 664) - (22 263)
Deferred taxation liabilities 1 299 402 (7 258)
Liabilities previously classified as
held-for-sale disposed or transferred - (69 419) (30 395)
Liabilities relating to assets
held-for-sale at the end of the period 102 069 209 455 162 714
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) 2016 2015 2016
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
expense and share appreciation rights
expense of R0,922 million
(February 2016: R0,832 million)
9. Revenue
Revenue for the Group 792 169 724 132 1 448 905
Transactions with other entities
in the Group (57 897) (86 488) (100 535)
Revenue for external customers 734 272 637 644 1 348 370
10. Exceptional items
Impairment of investment - - (12)
Exceptional items - - (12)
11. Profit from operations -
continuing operations
Profit from continuing operations
is arrived at after taking the
following into account:
Net (profit)/loss on disposal of
property, plant and equipment (686) (261) 362
Depreciation 36 704 34 460 71 860
IFRS 2 Share-based Payment expense and
share appreciation rights expense 922 785 2 565
Unaudited Unaudited Audited
six months six months financial year
ended ended ended
31 August 31 August 29 February
(R'000) 2016 2015 2016
12. Profit for the period from
discontinued operations
Revenue 239 562 431 021 701 799
Cost of sales (190 463) (379 623) (620 032)
Gross profit 49 099 51 398 81 767
Other income - 15 300 12 712
Distribution and selling costs (12 488) (43 392) (61 442)
Administration and other
operating expenses (25 559) (15 993) (32 041)
Profit from operations before
exceptional items from
discontinued operations 11 052 7 313 996
Exceptional items (8 329) 30 547 23 858
Profit from operation for
discontinued operations 2 723 37 860 24 854
Investment income 16 - 1 032
Finance costs (1 904) (3 420) (6 787)
Profit before taxation from
discontinued operations 835 34 440 19 099
Taxation expense (234) (5 886) (4 591)
Profit after taxation from
discontinued operations 601 28 554 14 508
Net cash flows incurred by
discontinued operations for the
period are represented below:
Operating cash inflow 81 387 50 951 306 361
Investing cash inflow 109 215 117 279 8 683
Financing cash outflow (144 961) (162 882) (397 854)
Net increase/(decrease) in cash
and cash equivalents from
discontinued operations 45 641 5 348 (82 810)
13. (Loss)/profit per ordinary share and headline loss per ordinary share - basic and fully diluted
(Loss)/profit 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 period
that the attributable loss was generated.
Headline profit/(loss) per ordinary share is calculated by dividing the headline profit/(loss)
attributable to ordinary shareholders of the parent by the weighted average number of shares in
issue over the period that the headline loss were generated.
Fully diluted loss and headline profit/(loss) per ordinary share is determined by adjusting
the weighted average number of shares in issue over the period 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 have occurred between
31 August 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:
http://www.astrapak.co.za
Date: 29/09/2016 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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