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Unaudited condensed interim group results for the six months to 31 December 2016 and dividend announcement
TRANSPACO LIMITED
A leading manufacturer, recycler and distributor of plastic and paper packaging products
Registration number 1951/000799/06
ISIN: ZAE000007480 Share code: TPC
("Transpaco" or "the group")
UNAUDITED CONDENSED INTERIM GROUP RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2016 AND
DIVIDEND ANNOUNCEMENT
- Net asset value per share 1 671 cents
- Headline earnings per share 178 cents
- Dividend per share 48 cents
INTRODUCTION
Transpaco's performance, reflecting a 7% decrease in headline earnings per share (HEPS), as a result
of a continued challenging economic environment, was below expectations.
The group's margins remained under pressure declining slightly during the period. Expenses were well
contained and below inflation. However, sales volumes did not reach anticipated levels.
All Transpaco operations traded favourably with certain divisions outperforming the previous year.
Transpaco's balance sheet remains strong due to continued stringent working capital management and
the group's performance for the six months.
FINANCIAL RESULTS
December December %
Group 2016 2015 decrease
Turnover (R'm) 903,6 912,5 (1,0)
Operating profit (R'm) 82,4 89,3 (7,7)
Headline earnings (R'm) 58,5 62,8 (7,0)
Earnings per share (cents) 177,8 190,4 (6,6)
Headline earnings per share (cents) 177,9 190,6 (6,7)
Diluted headline earnings per share (cents) 177,8 190,3 (6,6)
Headline earning per share for the 12 calendar months ended 31 December 2016 increased 3,3% to
317,4 cents (December 2015: 307,2)
The group's net interest-bearing debt-to-equity (gearing) position is 8,0% (December 2015: 17,6%).
Net asset value per share increased by 11,2% to 1 671 cents (December 2015: 1 503 cents).
PROSPECTS
The group will continue its proven business strategy, targeting organic growth while maintaining strict
financial control and at the same time identifying and pursuing appropriate acquisitions.
Transpaco has concluded an agreement to purchase the Johannesburg property from which Transpaco
Recycling operates. The transaction will be finalised during the financial year.
TRANSFORMATION
Transpaco's seventh independent accreditation process in respect of Black Economic Empowerment
reflected a Level 4 value added contributor.
Transformation remains a key strategic imperative of the group.
DIVIDEND
The board has declared an interim gross cash dividend out of income reserves of 48,0 cents per share
(December 2015: 52,0 cents per share) for the six-month period ended 31 December 2016. After applying the
dividend withholding tax of 15%, a net interim dividend of 40,80000 cents per share will be paid to those
shareholders who are not exempt from the dividends tax. The issued shares at the date of declaration is
33 317 482 ordinary shares. The Income Tax reference number is 9975/112/71/6.
The salient dates for the dividend are as follows:
Last date to trade shares cum dividend Tuesday, 14 March 2017
Shares trade ex-dividend Wednesday, 15 March 2017
Record date Friday, 17 March 2017
Payment date Monday, 20 March 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 15 March 2017 and
Friday, 17 March 2017, both days inclusive.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The group's unaudited interim financial results have been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting Standards ("IFRS") issued by the
International Accounting Standards Board ("IASB"), its interpretations issued by the IFRS Interpretations
Committee, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial
Reporting Pronouncements as issued by the Financial Reporting Standards Council and comply with the
JSE Listings Requirements and the Companies Act of South Africa. The accounting policies are consistent
in all material respects with those applied in the preparation of the group's annual financial statements
for the year ended 30 June 2016. The group has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
The group's unaudited interim financial statements comply with IAS 34 - Interim Financial Reporting
("IAS 34").
APPROVAL AND PREPARATION
These unaudited interim financial results have been prepared under the direction and supervision of the
Financial Director, L Weinberg CA(SA).
ON BEHALF OF THE BOARD
DJJ Thomas PN Abelheim L Weinberg
Non-executive Chairman Chief Executive Financial Director
DIRECTORS
DJJ Thomas (Chairman)*; PN Abelheim (Chief Executive); L Weinberg (Financial Director); HA Botha*ˆ;
SR Bouzaglou; SI Jacobson*; SP van der Linde (Lead Independent Director)*ˆ
*non-executive ˆindependent non-executive
Date 22 February 2017
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months % 6 months 12 months
R'000 Dec 2016 change Dec 2015 June 2016
Revenue 905 676 913 817 1 714 724
Turnover 903 641 (1,0) 912 532 1 712 376
Cost of sales (581 068) (586 777) (1 099 905)
Profit before operating costs and depreciation 322 573 (1,0) 325 755 612 471
Operating costs (218 122) (215 899) (412 613)
Depreciation (22 045) (20 530) (42 878)
Operating profit 82 406 (7,7) 89 326 156 980
Finance income 2 035 1 285 2 348
Finance costs (3 252) (3 218) (6 767)
Profit before taxation 81 189 (7,1) 87 393 152 561
Taxation (22 767) (24 593) (43 313)
Profit for the period 58 422 (7,0) 62 800 109 248
Other comprehensive income - - -
Total comprehensive income 58 422 (7,0) 62 800 109 248
Weighted average ranking number of
shares in issue ('000) 32 858 32 978 32 838
Diluted weighted average ranking
number of shares in issue ('000) 32 883 33 022 32 883
Earnings per share (cents) 177,8 (6,6) 190,4 332,7
Diluted earnings per share (cents) 177,7 (6,6) 190,2 332,2
Headline earnings per share (cents) 177,9 (6,7) 190,6 330,1
Diluted headline earnings per share (cents) 177,8 (6,6) 190,3 329,6
Dividend per share (cents)* 48,0 (7,7) 52,0 150,00
*Dividend declared after the period
Reconciliation of headline earnings (R'000)
Basic earnings 58 422 62 800 109 248
Loss/(profit) on disposal of property,
plant and equipment 41 48 (851)
Headline earnings 58 463 (7,0) 62 848 108 397
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued
share Share Other Distributable
R'000 capital premium reserves reserve Total
Balance at 30 June 2015 (audited) 328 11 019 4 005 439 824 455 176
Profit for the period - - - 62 800 62 800
Other comprehensive income - - - - -
Total comprehensive income - - - 62 800 62 800
Dividend paid - - - (24 356) (24 356)
Balance at 31 December 2015 (unaudited) 328 11 019 4 005 478 268 493 620
Profit for the period - - - 46 448 46 448
Other comprehensive income - - - - -
Total comprehensive income - - - 46 448 46 448
Dividend paid - - - (17 114) (17 114)
Balance at 30 June 2016 (audited) 328 11 019 4 005 507 602 522 954
Profit for the period - - - 58 422 58 422
Other comprehensive income - - - - -
Total comprehensive income - - - 58 422 58 422
Dividend paid - - - (32 271) (32 271)
Balance at 31 December 2016 (unaudited) 328 11 019 4 005 533 753 549 105
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months 6 months 12 months
R'000 Dec 2016 Dec 2015 June 2016
ASSETS
Non-current assets 335 408 304 501 311 664
Property, plant and equipment 292 309 266 288 267 823
Intangibles 17 855 482 17 855
Goodwill 23 195 35 704 23 195
Deferred taxation 2 049 2 027 2 791
Current assets 579 930 529 067 558 051
Inventories 184 987 176 686 212 704
Trade and other receivables 339 454 333 187 259 524
Taxation receivable 275 3 634 656
Cash and cash equivalents 55 214 15 560 85 167
TOTAL ASSETS 915 338 833 568 869 715
EQUITY AND LIABILITIES
Capital and reserves 549 105 493 620 522 954
Issued share capital 328 328 328
Share premium 11 019 11 019 11 019
Other reserves 4 005 4 005 4 005
Distributable reserve 533 753 478 268 507 602
Non-current liabilities 129 520 118 947 99 345
Interest-bearing borrowings 86 362 82 815 58 733
Deferred income 13 365 7 648 12 007
Deferred taxation 29 793 28 484 28 605
Current liabilities 236 713 221 001 247 416
Trade payables and accruals 201 180 172 055 201 221
Provisions 15 798 28 338 29 462
Current portion of interest-bearing borrowings 12 974 19 379 14 077
Deferred income 2 812 870 2 098
Taxation payable 3 949 359 558
TOTAL EQUITY AND LIABILITIES 915 338 833 568 869 715
Number of shares in issue ('000)
Number of shares (net of treasury shares) 32 841 32 821 32 821
Net movement in treasury shares 20 20 20
Ranking number of shares 32 861 32 841 32 841
Salient features
Net asset value per share (cents) 1 671 1 503 1 592
Operating margin % 9,1 9,8 9,2
Net interest-bearing debt:equity ratio % 8,0 17,6 Net cash
positive
CAPITAL COMMITMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
R'000 Dec 2016 Dec 2015 June 2016
Capital expenditure authorised and contracted
Property, plant and equipment 30 371 9 741 39 665
STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
R'000 Dec 2016 Dec 2015 June 2016
Cash flow from operating activities
Cash generated/(utilised) from operations 40 661 (23 185) 139 090
Dividends paid (32 271) (24 356) (41 470)
Finance income received 2 035 1 285 2 348
Finance costs paid (3 252) (3 218) (6 767)
Taxation paid (17 064) (20 319) (41 369)
Net cash (outflow)/inflow from operating activities (9 891) (69 793) 51 832
Cash flow used in investing activities
Proceeds on disposal of property,
plant and equipment 570 783 2 777
Acquisition of business - (109 650) (109 650)
Expansion and replacement of property,
plant and equipment (47 158) (31 492) (56 120)
Net cash outflow from investing activities (46 588) (140 359) (162 993)
Cash flow used in financing activities
Proceeds from borrowings 36 363 78 637 90 622
Repayment of borrowings (9 837) (6 525) (47 894)
Net cash inflow from financing activities 26 526 72 112 42 728
Net movement in cash for the period (29 953) (138 040) (68 433)
Cash and cash equivalents at the beginning
of the period 85 167 153 600 153 600
Cash and cash equivalents at the end of the period 55 214 15 560 85 167
SEGMENTAL ANALYSIS
Unaudited six months December 2016, six months December 2015 and audited 12 months June 2016
Paper Properties
Plastic and Board and Group Total
R'000 Products Products Services Group
Revenue - December 2016 662 831 240 821 2 024 905 676
Revenue to all customers 687 644 260 658 2 024 950 326
Less revenue to internal customers 24 813 19 837 - 44 650
Revenue - December 2015 665 281 247 285 1 251 913 817
Revenue to all customers 682 375 263 236 1 251 946 862
Less revenue to internal customers 17 094 15 951 - 33 045
Revenue - June 2016 1 231 499 481 104 2 121 1 714 724
Revenue to all customers 1 279 367 509 911 2 121 1 791 399
Less revenue to internal customers 47 868 28 807 - 76 675
Operating profit - December 2016 57 098 20 737 4 571 82 406
Operating profit - December 2015 60 168 27 035 2 123 89 326
Operating profit - June 2016 99 626 50 929 6 425 156 980
Profit before tax - December 2016 56 983 19 732 4 474 81 189
Profit before tax - December 2015 59 849 26 263 1 281 87 393
Profit before tax - June 2016 95 436 49 299 7 826 152 561
Capital expenditure December 2016 45 562 1 402 194 47 158
Capital expenditure December 2015 22 467 6 321 2 704 31 492
Capital expenditure - June 2016 33 798 17 645 4 677 56 120
Assets - December 2016 624 701 195 357 95 280 915 338
Assets - December 2015 591 058 202 738 39 772 833 568
Assets - June 2016 549 871 192 446 127 398 869 715
Liabilities - December 2016 255 756 82 307 28 170 366 233
Liabilities - December 2015 226 223 83 931 29 794 339 948
Liabilities - June 2016 217 105 97 766 31 890 346 761
AUDITORS Ernst & Young Inc.
COMPANY SECRETARY HJ van Niekerk
SPONSOR Investec Bank Limited
REGISTERED OFFICE 331 6th Street, Wynberg, Sandton
TRANSFER SECRETARIES Computershare Investor Services (Pty) Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg
WEBSITE www.transpaco.co.za
Date: 22/02/2017 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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