To view the PDF file, sign up for a MySharenet subscription.

ASTRAPAK LIMITED - Condensed unaudited interim results for the six months ended 31 August 2016 and renewal of cautionary announcement

Release Date: 29/09/2016 07:05
Code(s): APKP APK     PDF:  
Wrap Text
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'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story