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Unaudited Condensed Interim Group Results for the six months to 31 December 2017 and Dividend Announcement
Transpaco Limited
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 2017 AND DIVIDEND ANNOUNCEMENT
- Net asset value per share 1 803 cents
- Headline earnings per share 168,3 cents
- Dividend per share 45 cents
INTRODUCTION
Transpaco's performance, reflecting a 5,4% decrease in headline earnings per share (HEPS), as a result of a continued
challenging economic environment, was in line with expectations.
Turnover declined by 3% mainly as a result of price deflation in the plastics division.
The group's decrease in sales and continued margin pressure was partially offset by stringent well managed expenses
resulting in the operating margin remaining on par with the previous year.
All Transpaco divisions traded favourably with the plastics division lower than the previous year.
Transpaco's balance sheet remains robust as the group continues its strict working capital management strategy, and
the performance for the six months.
FINANCIAL RESULTS
December December %
Group 2017 2016 decrease
Turnover (R'm) 876,8 903,6 (3,0)
Operating profit (R'm) 78,5 82,4 (4,7)
Headline earnings (R'm) 55,3 58,4 (5,3)
Earnings per share (cents) 168,2 177,8 (5,4)
Headline earnings per share (cents) 168,3 177,9 (5,4)
Diluted headline earnings per share (cents) 168,3 177,8 (5,3)
The group's net interest-bearing debt-to-equity (gearing) position improved slightly to 6,2% (December 2016: 8,0%).
Transpaco's net asset value per share increased by 7,9% to 1 803 cents (December 2016: 1 671 cents).
Prospects
Transpaco's pending acquisition of the Future Packaging Group announced on SENS dated 18 December 2017 is progressing
well and is anticipated to be finalised during April/May 2018.
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.
Dividend
The board has declared an interim gross cash dividend out of income reserves of 45,0 cents per share (December 2016:
48,0 cents per share) for the six-month period ended 31 December 2017. After applying the dividend withholding tax of
20%, a net interim dividend of 36,00000 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 32 886 359 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, 13 March 2018
Shares trade ex dividend Wednesday, 14 March 2018
Record date Friday, 16 March 2018
Payment date Monday, 19 March 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 14 March 2018 and Friday, 16 March 2018,
both days inclusive.
Basis of preparation and accounting policies
The group's unaudited interim financial results have been prepared in accordance with IAS 34 - Interim Financial Reporting
("IAS 34"), 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 2017. The group has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
IFRS 9
There will be reclassification of financial assets and the measurement of provisions against receivables will be revised
using the loss method, the impact of which has not yet been quantified. However, a view will be provided at 30 June 2018.
The effective date will be 1 July 2018 and the modified retrospective method will be used.
IFRS 15
Management has assessed the potential impact of IFRS 15 on the financial statements of the group and concluded that the
group does not sell products based on multiple-element arrangements and it does not sell products on a provisional or
variable pricing basis and as such IFRS 15 does not have a significant impact on the timing or amount of the group's
revenue recognition. The effective date will be 1 July 2018 and the modified retrospective method will be used.
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*^; SR Bouzaglou;
SI Jacobson*; B Mkhondo*^; SP van der Linde (Lead Independent Director)*^
*non-executive ˆindependent non-executive
Date 20 February 2018
Auditors
Ernst & Young Incorporated
Transpaco Limited Registration number: 1951/000799/06, Share code: TPC; ISIN: ZAE000007480
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 Bierman Avenue, Rosebank, Johannesburg.
STATEMENT OF COMPREHENSIVE INCOME
R'000 Unaudited Unaudited Audited
6 months % 6 months 12 months
Dec 2017 change Dec 2016 June 2017
Revenue 878 994 905 676 1 639 861
Turnover 876 774 (3,0) 903 641 1 635 790
Cost of sales (550 605) (581 068) (1 046 749)
Profit before operating costs and depreciation 326 169 1,1 322 573 589 041
Operating costs (223 523) (218 122) (422 076)
Depreciation (24 109) (22 045) (45 262)
Operating profit 78 537 (4,7) 82 406 121 703
Finance income 2 220 2 035 4 071
Finance costs (3 896) (3 252) (6 429)
Profit before taxation 76 861 (5,3) 81 189 119 345
Taxation (21 551) (22 767) (32 986)
Profit for the period 55 310 (5,3) 58 422 86 359
Other comprehensive income - - -
Total comprehensive income 55 310 (5,3) 58 422 86 359
Weighted average ranking number of shares in issue ('000) 32 883 32 858 32 858
Diluted weighted average ranking number of shares in issue ('000) 32 883 32 883 32 883
Earnings per share (cents) 168,2 (5,4) 177,8 262,8
Diluted earnings per share (cents) 168,2 (5,3) 177,7 262,6
Headline earnings per share (cents) 168,3 (5,4) 177,9 262,6
Diluted headline earnings per share (cents) 168,3 (5,3) 177,8 262,4
Dividend per share (cents)* 45,0 (6,3) 48,0 120,0
*Dividend declared after the period
Reconciliation of headline earnings (R'000)
Basic earnings 55 310 58 422 86 359
Loss/(profit) on disposal of property, plant and equipment 35 41 (65)
Headline earnings 55 345 (5,3) 58 463 86 294
STATEMENT OF CHANGES IN EQUITY
R'000 Issued
share Share Other Distributable
capital premium reserves reserve Total
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
Profit for the period - - - 27 937 27 937
Other comprehensive income - - - - -
Total comprehensive income - - - 27 937 27 937
Dividend paid - - - (15 817) (15 817)
Balance at 30 June 2017 (audited) 328 11 019 4 005 545 873 561 225
Profit for the period - - - 55 310 55 310
Other comprehensive income - - - - -
Total comprehensive income - - - 55 310 55 310
Dividend paid - - - (23 742) (23 742)
Transfer - - (50) 50 -
Balance at 31 December 2017 (unaudited) 328 11 019 3 955 577 491 592 793
STATEMENT OF FINANCIAL POSITION
R'000 Unaudited Unaudited Audited
6 months 6 months 12 months
Dec 2017 Dec 2016 June 2017
ASSETS
Non-current assets 368 635 335 408 382 035
Property, plant and equipment 325 686 292 309 338 406
Intangibles 17 855 17 855 17 855
Goodwill 23 195 23 195 23 195
Deferred taxation 1 899 2 049 2 579
Current assets 578 638 579 930 541 469
Inventories 172 810 184 987 204 006
Trade and other receivables 368 668 339 454 237 929
Taxation receivable 669 275 -
Cash and cash equivalents 36 491 55 214 99 534
TOTAL ASSETS 947 273 915 338 923 504
EQUITY AND LIABILITIES
Capital and reserves 592 793 549 105 561 225
Issued share capital 328 328 328
Share premium 11 019 11 019 11 019
Other reserves 3 955 4 005 4 005
Distributable reserve 577 491 533 753 545 873
Non-current liabilities 101 648 129 520 106 303
Interest-bearing borrowings 57 214 86 362 65 259
Deferred income 12 904 13 365 13 153
Deferred taxation 31 530 29 793 27 891
Current liabilities 252 832 236 713 255 976
Trade payables and accruals 212 505 201 180 208 813
Provisions 18 665 15 798 27 929
Current portion of interest-bearing borrowings 15 911 12 974 16 916
Deferred income 2 111 2 812 2 113
Taxation payable 3 640 3 949 205
TOTAL EQUITY AND LIABILITIES 947 273 915 338 923 504
Number of shares in issue (‘000)
Number of shares (net of treasury shares) 32 861 32 841 32 841
Net movement in treasury shares 25 20 20
Ranking number of shares 32 886 32 861 32 861
Salient features
Net asset value per share (cents) 1 803 1 671 1 708
Operating margin % 9,0 9,1 7,4
Net interest-bearing debt:equity ratio % 6,2 8,0 Net cash
positive
CAPITAL COMMITMENTS
R'000 Unaudited Unaudited Audited
6 months 6 months 12 months
Dec 2017 Dec 2016 June 2017
Capital expenditure authorised and contracted
Property, plant and equipment 7 746 30 371 6 386
STATEMENT OF CASH FLOWS
R'000 Unaudited Unaudited Audited
6 months 6 months 12 months
Dec 2017 Dec 2016 June 2017
Cash flow from operating activities
Cash (utilised)/generated from operations (2 769) 40 661 204 387
Dividends paid (23 742) (32 271) (48 088)
Finance income received 2 220 2 035 4 071
Finance costs paid (3 896) (3 252) (6 429)
Taxation paid (14 467) (17 064) (33 185)
Net cash (outflow)/inflow from operating activities (42 654) (9 891) 120 756
Cash flow used in investing activities
Proceeds on disposal of property, plant and equipment 307 570 2 615
Expansion and replacement of property, plant and
equipment (11 646) (47 158) (118 369)
Net cash outflow from investing activities (11 339) (46 588) (115 754)
Cash flow used in financing activities
Proceeds from borrowings - 36 363 59 929
Repayment of borrowings (9 050) (9 837) (50 564)
Net cash (outflow)/inflow from financing activities (9 050) 26 526 9 365
Net movement in cash for the period (63 043) (29 953) 14 367
Cash and cash equivalents at the beginning of the period 99 534 85 167 85 167
Cash and cash equivalents at the end of the period 36 491 55 214 99 534
SEGMENTAL ANALYSIS
Unaudited six months December 2017, six months December 2016 and audited 12 months June 2017
R'000 Paper Properties
Plastic and Board and Group
Products Products Services Total
Revenue - December 2017 639 455 237 330 2 209 878 994
Revenue to all customers 665 570 257 026 2 209 924 805
Less revenue to internal customers 26 115 19 696 - 45 811
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 - June 2017 1 168 733 467 173 3 955 1 639 861
Revenue to all customers 1 215 968 500 200 3 955 1 720 123
Less revenue to internal customers 47 235 33 027 - 80 262
Operating profit - December 2017 52 466 20 068 6 003 78 537
Operating profit - December 2016 57 098 20 737 4 571 82 406
Operating profit - June 2017 71 403 41 253 9 047 121 703
Profit before tax - December 2017 51 122 19 412 6 327 76 861
Profit before tax - December 2016 56 983 19 732 4 474 81 189
Profit before tax - June 2017 68 207 40 250 10 888 119 345
Capital expenditure December 2017 4 934 3 433 3 279 11 646
Capital expenditure December 2016 45 562 1 402 194 47 158
Capital expenditure - June 2017 57 424 6 764 54 181 118 369
Assets - December 2017 630 974 182 164 134 135 947 273
Assets - December 2016 624 701 195 357 95 280 915 338
Assets - June 2017 541 339 185 420 196 745 923 504
Liabilities - December 2017 230 949 72 240 51 291 354 480
Liabilities - December 2016 255 756 82 307 28 170 366 233
Liabilities - June 2017 218 928 92 381 50 970 362 279
Website
www.transpaco.co.za
Date: 20/02/2018 11:00:00 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
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