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Reviewed Condensed Consolidated Results for the Year Ended 30 June 2017 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")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2017 AND DIVIDEND ANNOUNCEMENT
- Net asset value per share 1 708 cents
- Headline earnings per share 263 cents
- Total dividend per share 120 cents
INTRODUCTION
Following a stellar 2016 financial year, Transpaco's reduced performance is indicative of the unfavourable
prevailing economic conditions.
Selling price deflation, reduced customer spend and a continued softening demand for recycled material all impacted
negatively on Transpaco's performance resulting in a decrease in revenue, operating profit and headline earnings for
the year to June 2017 ("the year"). The decrease in turnover and operating profits declined in both divisions.
Aggressive focus on marketing and sales strategies remain key drivers in mitigating against the current economic
environment.
Transpaco's performance was supported by disciplined working capital management and controlled operating costs.
Although the group's gross profit percentage increased slightly, the reduced revenue resulted in a decrease in
operating margin to 7,4% (June 2016: 9,2%).
During the year the Mpumalanga production facilities in the Recycling and Flexible operations were consolidated
into the Recycling factory in Elandsfontein and the Flexible site in the Western Cape.
The employee costs associated with the consolidation amounting to R6,2 million have been fully accounted for in
these results representing 3,7% of the earnings decline which are non-recurring. Notwithstanding Transpaco's
trading performance, the balance sheet remains robust with the company ending the year in a net cash
positive position.
FINANCIAL RESULTS
Group %
June June (decrease)/
2017 2016 increase
Turnover (R'm) 1 635,79 1 712,37 (4,5)
Operating profits (R'm) 121,7 157,0 (22,5)
Total comprehensive income (R'm) 86,4 109,2 (21,0)
Headline earnings (R'm) 86,3 108,4 (20,4)
Earnings per share (cents) 262,8 332,7 (21,0)
Headline earnings per share (cents) 262,6 330,1 (20,4)
Diluted headline earnings per share (cents) 262,4 329,6 (20,4)
Net asset value per share (cents) 1 708 1 592 7,3
The weighted average number of shares in issue in calculating EPS and HEPS was 32 858 000 (June 2016: 32 838 000).
Additional plant and equipment acquired during the year and the purchase of the property from which the
Elandsfontein Recycling business operates, resulted in an increase in long-term borrowings of R9 million.
Cash generated from operations increased to R204,4 million (June 2016: R139,1 million). Cash and cash equivalents
at year-end were R99,5 million (June 2016: R85,2 million). Efficient working capital management minimised net
interest paid and resulted in Transpaco's net interest-bearing debt-to-equity position remaining cash positive.
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.
TRANSFORMATION
Transpaco's eighth independent accreditation process in respect of Black Economic Empowerment reflected a Level 5
value added contributor.
During the year Transpaco has focused its transformation initiatives on skills, supplier and enterprise development.
DIRECTORSHIP
Bonge Mkhondo was appointed as an independent non-executive director on 19 May 2017. Mrs Mkhondo is a member of the
Audit & Risk and Remuneration committees.
DIVIDEND
The board has declared a final gross cash dividend out of income reserves of 72,0 cents per share, resulting in
total dividends of 120,0 cents per share for the year ended 30 June 2017 (June 2016: 150,0 cents per share). After
applying the dividend withholding tax of 20% a net final dividend of 57.60000 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, 12 September 2017
Shares trade ex dividend Wednesday, 13 September 2017
Record date Friday, 15 September 2017
Payment date Monday, 18 September 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 13 September 2017 and
Friday, 15 September 2017, both days inclusive.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The group's annual financial results have been prepared in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS) issued by the International Auditing 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, the JSE Listings Requirements and the Companies Act. The principal 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 2017. The group has not early adopted any other standard, interpretation
or amendment that has been issued but is not yet effective.
The condensed consolidated financial statements do not include all the information and disclosures required in
the annual financial statements and should be read in conjunction with the group's annual financial statements
for the year ended 30 June 2017. The presentation and disclosure complies with International Accounting
Standard (IAS) 34.
REVIEW OF INDEPENDENT AUDITORS
The group's auditors Ernst & Young Inc. have reviewed the condensed consolidated financial information for the year.
The unmodified review report is available for inspection at Transpaco's registered office. The review was performed
in accordance with ISRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the
Entity. Any reference to future financial performance included in this announcement has not been reviewed or reported
on by the group's external auditors.
APPROVAL AND PREPARATION
These condensed consolidated 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 Bothaˆ; SR Bouzaglou;
SI Jacobson*; B Mkhondoˆ; SP van der Linde (Lead Independent Director)ˆ
*non-executive ˆindependent non-executive
Date 22 August 2017
Transpaco Limited Registration number: 1951/000799/06, Share code: TPC, ISIN: ZAE000007480
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
STATEMENT OF COMPREHENSIVE INCOME
R'000 Reviewed % Audited
12 months change 12 months
June 2017 June 2016
Revenue 1 639 861 1 714 724
Turnover 1 635 790 (4,5) 1 712 376
Cost of sales (1 046 749) (1 099 905)
Profit before operating costs and depreciation 589 041 (3,8) 612 471
Operating costs (422 076) (412 613)
Depreciation (45 262) (42 878)
Operating profit 121 703 (22,5) 156 980
Finance income 4 071 2 348
Finance costs (6 429) (6 767)
Profit before taxation 119 345 (21,8) 152 561
Taxation (32 986) (43 313)
Profit for the year 86 359 109 248
Other comprehensive income - -
Total comprehensive income for the year 86 359 (21,0) 109 248
Weighted average ranking number of shares in issue ('000) 32 858 32 838
Diluted weighted average ranking number of shares in issue ('000) 32 883 32 883
Earnings per share (cents) 262,8 (21,0) 332,7
Diluted earnings per share (cents) 262,6 (21,0) 332,2
Headline earnings per share (cents) 262,6 (20,4) 330,1
Diluted headline earnings per share (cents) 262,4 (20,4) 329,6
Dividend per share (cents)* 120,0 (20,0) 150,0
*Includes interim dividend of 48 cents (June 2016 - 52 cents)
and a dividend declared after the period of 72 cents
(June 2016 - 98 cents)
Reconciliation of headline earnings (R'000)
Basic earnings 86 359 109 248
Profit on disposal of property, plant and equipment (65) (851)
Headline earnings 86 294 (20,4) 108 397
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
R'000 Share Share Other Distributable
capital premium reserves reserve Total
Balance at 30 June 2015 328 11 019 4 005 439 824 455 176
Profit for the year - - - 109 248 109 248
Other comprehensive income - - - - -
Total comprehensive income - - - 109 248 109 248
Dividend paid - - - (41 470) (41 470)
Balance at 30 June 2016 328 11 019 4 005 507 602 522 954
Profit for the year - - - 86 359 86 359
Other comprehensive income - - - - -
Total comprehensive income - - - 86 359 86 359
Dividend paid - - - (48 088) (48 088)
Balance at 30 June 2017 328 11 019 4 005 545 873 561 225
STATEMENT OF FINANCIAL POSITION
R'000 Reviewed Audited
12 months 12 months
June 2017 June 2016
ASSETS
Non-current assets 382 035 311 664
Property, plant and equipment 338 406 267 823
Intangibles 17 855 17 855
Goodwill 23 195 23 195
Deferred taxation 2 579 2 791
Current assets 541 469 558 051
Inventories 204 006 212 704
Trade and other receivables 237 929 259 524
Taxation receivable - 656
Cash and cash equivalents 99 534 85 167
TOTAL ASSETS 923 504 869 715
EQUITY AND LIABILITIES
Capital and reserves 561 225 522 954
Issued share capital 328 328
Share premium 11 019 11 019
Other reserve 4 005 4 005
Distributable reserve 545 873 507 602
Non-current liabilities 106 303 99 345
Interest-bearing borrowings 65 259 58 733
Deferred income 13 153 12 007
Deferred taxation 27 891 28 605
Current liabilities 255 976 247 416
Trade payables and accruals 208 813 201 221
Provisions 27 929 29 462
Current portion of interest-bearing borrowings 16 916 14 077
Deferred income 2 113 2 098
Taxation payable 205 558
TOTAL EQUITY AND LIABILITIES 923 504 869 715
Number of shares in issue ('000)
Number of shares (net of treasury shares) 32 841 32 821
Net movement in treasury shares 20 20
Ranking number of shares 32 861 32 841
Salient features
Net asset value per share (cents) 1 708 1 592
Operating margin % 7,4% 9,2%
Net interest-bearing debt:equity ratio % Net cash Net cash
positive positive
CAPITAL COMMITMENTS
R'000 Reviewed Audited
12 months 12 months
June 2017 June 2016
Capital expenditure authorised and contracted
Property, plant and equipment 6 386 39 665
STATEMENT OF CASH FLOWS
R'000 Reviewed Audited
12 months 12 months
June 2017 June 2016
Cash flow from operating activities
Cash generated from operations 204 387 139 091
Dividends paid (48 088) (41 470)
Finance income received 4 071 2 348
Finance costs paid (6 429) (6 767)
Taxation paid (33 185) (41 370)
Net cash inflow from operating activities 120 756 51 832
Cash flow used in investing activities
Proceeds on disposal of property, plant and equipment 2 615 2 777
Acquisition of business - (109 650)
Expansion and replacement of property, plant and equipment (118 369) (56 120)
Net cash outflow from investing activities (115 754) (162 993)
Cash flow used in financing activities
Proceeds from borrowings 59 929 90 622
Repayment of borrowings (50 564) (47 894)
Net cash inflow from financing activities 9 365 42 728
Net movement in cash for the year 14 367 (68 433)
Cash and cash equivalents at the beginning of the year 85 167 153 600
Cash and cash equivalents at the end of the year 99 534 85 167
SEGMENTAL ANALYSIS
R'000 Paper Properties
Plastic and Board and Group Total
Products Products Services Group
Turnover - 2017 1 168 733 467 057 - 1 635 790
Turnover to all customers 1 215 968 500 084 - 1 716 052
Less turnover to internal customers 47 235 33 027 - 80 262
Turnover - 2016 1 231 286 481 090 - 1 712 376
Turnover to all customers 1 279 154 509 897 - 1 789 051
Less turnover to internal customers 47 868 28 807 - 76 675
Operating profit - 2017 71 403 41 253 9 047 121 703
Operating profit - 2016 99 626 50 929 6 425 156 980
Profit before tax - 2017 68 207 40 250 10 888 119 345
Profit before tax - 2016 95 436 49 299 7 826 152 561
Capital expenditure - 2017 57 424 6 764 54 181 118 369
Capital expenditure - 2016 33 798 17 645 4 677 56 120
Assets - 2017 541 339 185 420 196 745 923 504
Assets - 2016 549 871 192 446 127 398 869 715
Liabilities - 2017 218 928 92 381 50 970 362 279
Liabilities - 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: 23/08/2017 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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