KAP INDUSTRIAL HOLDINGS LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018

Release Date: 14/08/2018 12:35
Code(s): KAP
 
Wrap Text
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018

KAP Industrial Holdings Limited
Registration number: 1978/000181/06
Share code: KAP
ISIN: ZAE000171963
(‘KAP’ or ‘the company’ or ‘the group’)


AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018


HIGHLIGHTS

Revenue from continuing operations up by 16% to R23.0bn
Operating profit from continuing operations up by 15% to R2.9bn
Cash generated from operations up by 12% to R3.3bn
Headline earnings per share from continuing operations up by 9%
Net asset value per share up by 9%


OPERATIONAL OVERVIEW

KAP continued to grow its business during the year under review, showing revenue, profit and cash growth while successfully implementing 
a number of major expansion projects and concluding the integration of its recent acquisitions. The disciplined execution of the company’s 
strategy produced good results for the year. 

The results of the company are reported in three segments as follows:

Diversified industrial

Integrated Timber - Integrated forestry and timber manufacturing operations with primary and upgrading processes
Automotive Components - Manufacture of vehicle retail accessories and components used in new vehicle assembly
Integrated Bedding - Manufacture of foam, fabrics, springs, bases and branded mattresses

Diversified chemical

Polymers - Manufacture of polyethylene terephthalate (PET), high-density polyethylene (HDPE) and polypropylene (PP)
Resins - Manufacture of formaldehyde and urea formaldehyde (UF) resins

Diversified logistics

Contractual Logistics - Provision of specialised contractual supply chain and logistics services
Passenger Transport - Provision of personnel, commuter, intercity and tourism transport services

Revenue
Diversified industrial - 29%
Diversified chemical - 34%
Diversified logistics - 37%

Operating profit 
Diversified industrial -38%
Diversified chemical - 32%
Diversified logistics - 30%

Total assets 
Diversified industrial - 36%
Diversified chemical - 36%
Diversified logistics - 28%


Revenue for the diversified industrial segment increased by 7% to R6 801 million, while the operating profit of the segment increased 
by 17% to R1 100 million. 

During the year under review:

The Integrated Timber division performed well following recent upgrades to its Piet Retief particleboard plant and continued focus 
on its value-add product strategy, which provided revenue growth and margin expansion. A further production capacity expansion project 
was successfully completed at its medium-density fibreboard plant in Johannesburg. The division’s forestry, sawmilling and pole operations 
performed satisfactorily notwithstanding the operational impact of major fires that affected the southern Cape region during June 2017.

The Automotive Components division successfully completed the industrialisation of two replacement vehicle models being assembled 
in the country. The division continued to show growth, albeit modest, in spite of the lower industry vehicle assembly volumes that 
are normally associated with replacement model introductions. The increased parts penetration into these replacement models resulted 
in market share gains for the division. Autovest performed below expectation in a subdued motor retail environment.

The Integrated Bedding division continued to show strong growth as a result of recent capital investments in infrastructure 
and new technology manufacturing equipment and through further integration into the manufacture of its primary bedding-related 
component raw materials. The acquisition of Support-a-Paedic provided access to new markets and brands.


Revenue for the diversified chemical segment increased by 47% to R8 018 million, while the operating profit of the segment increased 
by 38% to R925 million. 

During the year under review:

The Chemical division successfully concluded the integration of Hosaf and Safripol into a single polymers business, which was recently 
launched under a reformatted Safripol brand. This resulted in increased operational efficiencies and provided access to broader markets 
for the division.

Both the PP and HDPE product streams performed ahead of expectation as a result of strong demand for the products and healthy industry 
margins.

The PET product stream produced a disappointing result due to the delayed start-up of a major expansion project at its plant in Durban. 
The expansion project was, however, successfully completed and tested to full capacity. Domestic and international demand for PET remains 
stable with healthy industry margins.

The division’s resin operation produced a pleasing result, with strong demand for the product.


Revenue for the diversified logistics segment increased by 4% to R8 971 million, while the operating profit of the segment decreased 
by 5% to R842 million. 

During the year under review:

The Contractual Logistics division produced a disappointing result. After a good first half of the financial year, the division 
found economic conditions particularly challenging during the second half with reduced volumes and pricing pressure across its main 
areas of operations. The recent acquisitions of this division performed ahead of expectation, while efforts toward operational 
efficiencies and cost control continued in the traditional operations. Certain strategic contracts were successfully renewed. 
The division successfully concluded a B-BBEE transaction that is detailed below and remains subject to approval by the competition 
authority.

The Passenger Transport division produced a pleasing result in spite of a subdued economic environment and a major industry strike. 
The intercity operations continued to perform below expectation due to increased competitor activity and lower passenger numbers. 
The personnel, commuter and tourism operations performed well, as did the company’s personnel operations in Mozambique.


FINANCIAL REVIEW

These are the provisional audited results for the year ended 30 June 2018.

Revenue and operating profit before capital items
Revenue from continuing operations increased by 16% to R22 985 million (2017: R19 783 million). Operating profit before capital items from 
continuing operations increased by 15% to R2 867 million (2017: R2 499 million). Operating margin remained stable at 12.5% (2017: 12.6%).

Headline earnings per share (HEPS)
HEPS from continuing operations increased by 8.8% to 60.5 cents (2017: 55.6 cents). 

Tax rate
The effective tax rate decreased to 23.9% (2017: 25.8%), mainly due to incentives in relation to the group’s investments during the year 
in expanding manufacturing capacity. 

Working capital 
Net working capital increased by R686 million to R1 367 million. Inventories increased by R397 million, mainly due to increased 
stockholding associated with the expansion at its PET operation in Durban and accelerated sawlog harvesting following extensive plantation 
fires in the southern Cape during June 2017. Accounts receivable increased by R361 million mainly as a result of longer-dated payments 
for exports of PET. Accounts payable increased by R72 million. 

Cash flow
Cash generated from operations increased by 11.8% to R3 308 million (2017: R2 958 million).

Capital expenditure
Replacement capital expenditure continues to be managed over time in relation to the annual depreciation charge and amounted 
to R837 million for the period (net of proceeds on disposal). Expansion capital expenditure of R811 million resulted from continued 
investment in the group’s asset base to drive growth and efficiency benefits. Capital expenditure was mainly directed towards expansion 
of the PET plant in Durban, replacement vehicle model introductions, logistics long-haul vehicles and passenger transport vehicles.

Net asset value (NAV) 
The NAV per share increased by 9.4% to 454 cents from 415 cents.

Capital structure
In order to facilitate the various expansion activities of the group while maintaining a healthy capital structure, R1 500 million 
was raised through a fully subscribed rights issue in the prior year (December 2016). This resulted in a 4% increase in the weighted 
number of shares in issue when comparing to the prior year. Net interest-bearing debt decreased by R50 million to R5 727 million. 
The net debt/EBITDA ratio and the EBITDA/interest cover ratio both remain well within target levels at 1.5 times and 5.5 times 
respectively. This positions the company well in terms of funding future growth and expansion activities.

Global Credit Rating Co (Pty) Ltd reviewed KAP’s credit rating in October 2017 and upgraded KAP from A(za) to A+(za) with a stable outlook. 

The debt structure and capacity ratios are reflected as follows:

                                                     30 Jun 2018        30 Jun 2017
                                                              Rm                 Rm
Interest-bearing long-term liabilities                     6 922              7 307
Interest-bearing short-term liabilities                      956                405
Bank overdrafts and short-term facilities                      -                 74
Cash and cash equivalents                                 (2 151)            (2 009)
Net interest-bearing debt                                  5 727              5 777
EBITDA*                                                    3 912              3 361
Net finance charges*                                         706                515
EBITDA: interest cover (times)                               5.5                6.5
Net debt: EBITDA (times)                                     1.5                1.7
Gearing %                                                    47%                52%

* From continuing operations. Safripol operations only included for six months in the prior year.

The following funding activities were concluded during the period to facilitate longer-dated maturities to accommodate future growth:

- R2 004 million raised through bond issuances, with 3 and 5-year tenures;
- R240 million bond settled at maturity;
- R1 750 million of existing term loan facilities settled; and
- the KAP bond programme increased from R5 billion to R10 billion.

The bond issuances and settlements of term facilities have resulted in an extended debt maturity profile.


CORPORATE ACTIVITY

The group concluded the following transactions during the period, in accordance with its strategy: 

- The company concluded a series of transactions and funding arrangements in order to facilitate greater than 51% ‘black ownership’ 
  and greater than 30% ‘black women ownership’ of its South African logistics operations, Unitrans Supply Chain Solutions (Pty) Ltd (USCS). 
  This series of transactions resulted in the following:

  - Effective sale of 23.02% of USCS to a wholly owned entity of the FWG Pieters Trust.
  - Effective sale of 21.98% of USCS to a wholly owned entity of the Sakhumzi Foundation Empowerment Trust.
  - Acquisition by USCS of the remaining shares of Xinergistix (Pty) Ltd, resulting in it being a wholly owned subsidiary of USCS.

  The details of this series of transactions were published on the Stock Exchange News Service (SENS) on 18 May 2018 and a related circular
  was published on 8 June 2018. The series of transactions remain subject to approval of the competition authorities.

- Support-a-Paedic (Pty) Ltd and RME Components (Pty) Ltd were acquired effective 1 December 2017 for R48 million, in order to provide 
  the integrated bedding division with access to new markets and brands. The fair value of the assets and liabilities was R16 million, 
  resulting in goodwill of R32 million.

- On 1 December 2017, Southern Star Logistics (Pty) Ltd (a 50% owned subsidiary) was formed in order to facilitate growth in the Swaziland 
  territory. Certain assets from KAP-owned subsidiaries Unitrans Swaziland (Pty) Ltd and Unitrans Agricultural Services (Pty) Ltd were 
  combined with a R92 million contribution of assets from an external party, South Star Investments (Pty) Ltd.

- KAP acquired 45% minority interests in Crystal Cool Holdings (Pty) Ltd on 1 July 2017 for R10 million in order to consolidate 
  and streamline operations in the contractual logistics division.

- The disposal of 23% of Feltex Fehrer (Pty) Ltd to the automotive components division’s technology partner, F.S. Fehrer Automotive GmbH, 
  was concluded effective 1 July 2017 for R58 million in terms of a call option.


OUTLOOK

The diverse nature of the group’s operations, with exposure to various sectors, business models and currencies, and the recent investments 
in organic and acquisitive expansion support the continued growth of the company.

During the last 24 months KAP has made significant investments in the expansion of its operations and concluded several acquisitions. 
In addition, the company recently concluded a B-BBEE transaction in its Contractual Logistics division, which remains subject 
to competition authority approval. The primary focus of management in the year ahead will therefore be on optimising its expanded 
operations and growing its market share in all areas of operation in order to extract full value from these recent investments 
and transactions. 

Management remains optimistic that this focus will provide continued operational growth, and will result in a strong balance sheet, 
sustainable earnings and good cash generation in order to facilitate future expansion activities and acquisition opportunities in terms 
of its strategy.


DIVIDEND

The board of directors is pleased to announce that a gross dividend of 23 cents per share (2017: 21 cents per share) for the year 
ended 30 June 2018 has been approved and declared.


APPRECIATION

The board of directors records its appreciation for the continued support and loyalty of the group’s employees, shareholders, customers 
and suppliers.

On behalf of the board

J de V du Toit                           GN Chaplin                    FH Olivier
Independent non-executive chairman       Chief executive officer       Chief financial officer

14 August 2018


SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

Summarised consolidated income statement 
                                                                         Year ended            Year ended
                                                                        30 Jun 2018           30 Jun 2017
                                                                            Audited               Audited                  %
                                                           Notes                 Rm                    Rm             change
Revenue                                                                      22 985                19 783                 16 
Operating profit before depreciation, amortisation 
and capital items                                                             3 912                 3 361                 16 
Depreciation and amortisation                                                (1 045)                 (862) 
Operating profit before capital items                                         2 867                 2 499                 15 
Capital items                                                  1                (66)                  (34) 
Earnings before interest, dividend income, associate 
and joint venture earnings and taxation                                       2 801                 2 465                 14 
Net finance charges                                                            (706)                 (515) 
Share of profit of associate and joint venture companies                         23                    15  
Profit before taxation                                                        2 118                 1 965                  8 
Taxation                                                                       (508)                 (510) 
Profit for the year from continuing operations                                1 610                 1 455                 11 
Loss for the year from discontinued operations                 2                (19)                  (62) 
Profit for the year                                                           1 591                 1 393                 14 
Attributable to:    
Owners of the parent                                                          1 540                 1 343                 15 
Non-controlling interests                                                        51                    50  
Profit for the year                                                           1 591                 1 393                 14 
From continuing and discontinued operations:    
Basic earnings per ordinary share (cents)                                      57.7                  52.2                 11
Fully diluted earnings per ordinary share (cents)                              57.2                  51.7                 11 
From continuing operations:    
Basic earnings per ordinary share (cents)                                      58.4                  54.6                  7
Fully diluted earnings per ordinary share (cents)                              58.0                  54.1                  7


Additional information 
                                                                         Year ended            Year ended 
                                                                        30 Jun 2018           30 Jun 2017
                                                                            Audited               Audited                  %
                                                                                 Rm                    Rm             change
Note 1: Capital items   
From continuing operations:   
Loss on disposal of intangible assets                                            (1)                    - 
Loss on disposal of property, plant and equipment 
and investment property                                                          (3)                  (36) 
Gain on bargain purchase                                                          -                     4  
Impairments                                                                     (62)                   (2) 
                                                                                (66)                  (34) 
From discontinued operations:   
Loss on disposal of property, plant and equipment 
and investment property                                                           -                    (1) 
Impairments                                                                       -                   (34) 
                                                                                  -                   (35) 
                                                                                (66)                  (69)
   
Note 2: Loss for the year from discontinued operations   
Revenue                                                                          57                   227  
Operating loss before depreciation, amortisation and capital items              (25)                  (44) 
Depreciation and amortisation                                                     -                    (6) 
Operating loss before capital items                                             (25)                  (50) 
Capital items                                                                     -                   (35) 
Loss before interest, dividend income, associate and joint venture 
earnings and taxation                                                           (25)                  (85) 
Net finance charges                                                              (1)                   (3) 
Loss before taxation                                                            (26)                  (88) 
Taxation                                                                          7                    26  
Loss for the year from discontinued operations                                  (19)                  (62)

Note 3: Headline earnings attributable to ordinary shareholders   
Earnings attributable to owners of the parent                                 1 540                 1 343                 15
Adjusted for:   
  Capital items (note 1)                                                         66                    69  
  Taxation effects of capital items                                             (10)                  (19) 
  Non-controlling interests' portion of capital items (net of taxation)           -                     1  
                                                                              1 596                 1 394                 14

Note 4: Headline earnings per ordinary share   
From continuing and discontinued operations:   
Headline earnings per ordinary share (cents)                                   59.8                  54.2                 10
Fully diluted headline earnings per ordinary share (cents)                     59.3                  53.6                 11
From continuing operations:   
Headline earnings per ordinary share (cents)                                   60.5                  55.6                  9
Fully diluted headline earnings per ordinary share (cents)                     60.0                  55.1                  9
Number of ordinary shares in issue (m)                                        2 678                 2 662  
Weighted average number of ordinary shares in issue (m)                       2 671                 2 574                  4


Summarised consolidated statement of comprehensive income 
                                                                         Year ended            Year ended
                                                                        30 Jun 2018           30 Jun 2017
                                                                            Audited               Audited                  %
                                                                                 Rm                    Rm             change
Profit for the year                                                           1 591                 1 393                 14
Other comprehensive income/(loss)   
Items that may be reclassified subsequently to profit or loss:   
Exchange differences on translation of foreign operations                        27                   (75) 
Deferred taxation                                                                12                     -
Other comprehensive income/(loss) for the year                                   39                   (75) 
Total comprehensive income for the year                                       1 630                 1 318                 24
Total comprehensive income attributable to:   
Owners of the parent                                                          1 579                 1 269  
Non-controlling interests                                                        51                    49  
Total comprehensive income for the year                                       1 630                 1 318                 24


Summarised consolidated statement of changes in equity 
                                                                                               Year ended         Year ended
                                                                                              30 Jun 2018        30 Jun 2017
                                                                                                  Audited            Audited
                                                                                                       Rm                 Rm
Balance at beginning of the year                                                                   11 348              8 862 
Changes in stated share capital  
Net shares issued                                                                                      17              1 456 
Changes in reserves  
Total comprehensive income for the year attributable to owners of the parent                        1 579              1 269 
Dividends paid                                                                                       (559)              (442)
Share-based payments                                                                                   61                 85 
Other reserve movements                                                                                22                  -
Changes in non-controlling interests  
Total comprehensive income for the year attributable to non-controlling interests                      51                 49 
Dividends paid                                                                                        (71)               (37)
Shares issued to non-controlling interests                                                             31                  3 
Shares bought from non-controlling interests                                                           (2)                 -
Introduced and acquired on acquisition of subsidiaries                                                  -                103 
Balance at end of the year                                                                         12 477             11 348 
Comprising:  
Stated share capital                                                                                8 791              8 774 
Reverse acquisition reserve                                                                        (3 952)            (3 952)
Distributable reserves                                                                              6 905              5 915 
Share-based payment reserve                                                                           292                274 
Other reserves                                                                                        119                 24 
Non-controlling interests                                                                             322                313 
                                                                                                   12 477             11 348 


Summarised consolidated statement of financial position 
                                                                                              30 Jun 2018        30 Jun 2017
                                                                                                  Audited            Audited
                                                                                                       Rm                 Rm
ASSETS  
Non-current assets  
Goodwill and intangible assets                                                                      5 392              5 333 
Property, plant and equipment and investment properties                                            12 513             11 832 
Consumable biological assets                                                                        1 919              1 978 
Investments in associate and joint venture companies                                                   75                 67 
Investments and loans                                                                                  13                 11 
Deferred taxation assets                                                                               68                130 
Other receivables                                                                                       -                 40 
                                                                                                   19 980             19 391 
  
Current assets  
Inventories                                                                                         2 145              1 727 
Accounts receivable and other current assets                                                        4 053              3 652 
Short-term loans receivable                                                                             6                  3 
Taxation receivable                                                                                    87                 93 
Cash and cash equivalents                                                                           2 151              2 009 
Assets classified as held for sale                                                                     82                103 
                                                                                                    8 524              7 587 
Total assets                                                                                       28 504             26 978 
  
EQUITY AND LIABILITIES  
Capital and reserves  
Stated share capital                                                                                8 791              8 774 
Reserves                                                                                            3 364              2 261 
                                                                                                   12 155             11 035 
Non-controlling interests                                                                             322                313 
Total equity                                                                                       12 477             11 348 
  
Non-current liabilities  
Interest-bearing long-term liabilities                                                              6 922              7 307 
Deferred taxation liabilities                                                                       3 141              2 928 
Other long-term liabilities and provisions                                                            113                112 
                                                                                                   10 176             10 347 

Current liabilities  
Accounts payable, provisions and other current liabilities                                          4 844              4 736 
Interest-bearing short-term liabilities                                                               956                405 
Taxation payable                                                                                       51                 68 
Bank overdrafts and short-term facilities                                                               -                 74 
                                                                                                    5 851              5 283 
Total equity and liabilities                                                                       28 504             26 978 
Net asset value per ordinary share (cents)                                                            454                415 
Net interest-bearing debt to equity (%)                                                               47%                52%


Fair values of financial instruments                                                                         
                                                                                               Fair value         Fair value
                                                                                                    as at              as at
                                                                                              30 Jun 2018        30 Jun 2017
                                                                         Fair value               Audited            Audited
                                                                          hierarchy                    Rm                 Rm
Derivative financial assets                                                 Level 2                    58                  6 
Derivative financial liabilities                                            Level 2                    (2)               (11)

Level 2 financial instruments consist of foreign exchange contracts that are valued using techniques where all of the inputs 
that have a significant effect on the valuation are directly or indirectly based on observable market data. These inputs include 
foreign exchange rates.


Summarised consolidated statement of cash flows 
                                                                                               Year ended         Year ended
                                                                                              30 Jun 2018        30 Jun 2017
                                                                                                  Audited            Audited
                                                                                                       Rm                 Rm
Operating profit before capital items                                                               2 867              2 499 
Depreciation and amortisation                                                                       1 045                862 
Operating loss before depreciation, amortisation and capital items 
from discontinued operations                                                                          (25)               (44)
Net fair value adjustments of consumable biological assets and decrease 
due to harvesting and sale of livestock                                                                64                 (4)
Other non-cash adjustments                                                                             38                 28 
Cash generated before working capital changes                                                       3 989              3 341 
Increase in inventories                                                                              (389)               (41)
Increase in receivables                                                                              (352)              (334)
Increase/(decrease) in payables                                                                        60                 (8)
Changes in working capital                                                                           (681)              (383)
Cash generated from operations                                                                      3 308              2 958 
Dividends received                                                                                     10                 10 
Dividends paid                                                                                       (630)              (479)
Net finance charges                                                                                  (764)              (596)
Taxation paid                                                                                        (237)              (295)
Net cash inflow from operating activities                                                           1 687              1 598 
Additions to property, plant and equipment and investment property                                 (1 648)            (2 240)
Acquisition of investments                                                                            (29)            (3 781)
Other investing activities                                                                            (46)               (62)
Net cash outflow from investing activities                                                         (1 723)            (6 083)
Net cash outflow from operating and investing activities                                              (36)            (4 485)
Net cash inflow from financing activities                                                             178              3 911 
Net increase/(decrease) in cash and cash equivalents                                                  142               (574)
Effects of exchange rate translations on cash and cash equivalents                                      -                (19)
Cash and cash equivalents at beginning of year                                                      2 009              2 602 
Cash and cash equivalents at end of year                                                            2 151              2 009 


Reconciliation of total assets per statement of financial position 
to total assets per segmental analysis   
                                                                                              30 Jun 2018        30 Jun 2017
                                                                                                  Audited            Audited
                                                                                                       Rm                 Rm
Total assets per statement of financial position                                                   28 504             26 978 
Less: Investments in associate and joint venture companies                                            (75)               (67)
Less: Interest-bearing long-term loans receivable                                                      (6)                (2)
Less: Deferred taxation assets                                                                        (68)              (130)
Less: Interest-bearing short-term loans receivable                                                     (5)                (1)
Less: Taxation receivable                                                                             (87)               (93)
Less: Cash and cash equivalents                                                                    (2 151)            (2 009)
Less: Assets classified as held for sale                                                              (82)              (103)
Total assets per segmental analysis                                                                26 030             24 573 


Segmental analysis  
                                                                         Year ended            Year ended
                                                                        30 Jun 2018           30 Jun 2017
                                                                            Audited               Audited                  %
                                                                                 Rm                    Rm             change
Total assets    
Diversified industrial                                                        9 458                 9 149                  3
Diversified chemical                                                          9 292                 8 354                 11
Diversified logistics                                                         7 280                 7 070                  3
                                                                             26 030                24 573                  6
    
Revenue from continuing operations    
Diversified industrial                                                        6 801                 6 385                  7 
Diversified chemical                                                          8 018                 5 467                 47 
Diversified logistics                                                         8 971                 8 656                  4 
                                                                             23 790                20 508                 16 
Intersegment revenue eliminations                                              (805)                 (725) 
                                                                             22 985                19 783                 16 
    
Operating profit before depreciation, amortisation and capital 
items from continuing operations    
Diversified industrial                                                        1 314                 1 095                 20
Diversified chemical                                                          1 061                   732                 45
Diversified logistics                                                         1 537                 1 534                  -
                                                                              3 912                 3 361                 16

Operating profit before capital items from continuing operations    
Diversified industrial                                                        1 100                   944                 17 
Diversified chemical                                                            925                   672                 38 
Diversified logistics                                                           842                   883                 (5)
                                                                              2 867                 2 499                 15 


Geographical information 
                                                                         Year ended                               Year ended
                                                                        30 Jun 2018                              30 Jun 2017
                                                                            Audited                                  Audited
                                                                                 Rm                     %                 Rm
Non-current assets   
South Africa                                                                 18 685                    94             18 179
Rest of Africa                                                                1 295                     6              1 212
                                                                             19 980                   100             19 391 
   
Revenue from continuing operations   
South Africa                                                                 20 971                    91             17 978 
Rest of Africa                                                                2 014                     9              1 805 
                                                                             22 985                   100             19 783


SELECTED EXPLANATORY NOTES

Statement of compliance
The provisional summarised consolidated financial statements have been prepared and presented in accordance with the framework concepts 
and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting 
Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting 
Standards Council, the Listings Requirements of the JSE Limited, the information at a minimum as required by IAS 34: Interim Financial 
Reporting and the requirements of the South African Companies Act, No. 71 of 2008. The summarised consolidated financial statements 
have been prepared using accounting policies that comply with IFRS, which are consistent with those applied in the consolidated financial 
statements for the year ended 30 June 2017.

Basis of preparation
The summarised consolidated financial statements are prepared in millions of South African rand (Rm) on the historical-cost basis, except 
for certain assets and liabilities, which are carried at amortised cost, and derivative financial instruments and consumable biological 
assets, which are stated at their fair values. The preparation of the summarised consolidated financial statements and the full set 
of consolidated financial statements for the year ended 30 June 2018 was supervised by Frans Olivier CA(SA), the group’s chief financial 
officer.

Financial statements
The consolidated financial statements for the year, which have been audited by Deloitte & Touche, and their accompanying unmodified 
audit report as well as their unmodified audit report on this set of summarised financial information, are available for inspection 
at the company’s registered office. Information included under the headings ‘Outlook’ and ‘Operational overview’ and any reference 
to future financial information included in the summarised financial information, has not been audited or reviewed. The full consolidated 
financial statements are available at the issuer’s office upon request. The auditor’s report does not necessarily report on all the 
information contained in this announcement. Shareholders are therefore advised that, in order to obtain a full understanding of the nature 
of the auditor’s engagement, they should obtain a copy of the auditor’s report together with the accompanying financial information from 
the issuer’s registered office. The results were approved by the board of directors on 14 August 2018.

Accounting policies
The accounting policies and methods of computation of the group have been applied consistently to the periods presented in the summarised 
consolidated financial statements.

Post-balance sheet events
No significant events have occurred in the period between the end of the period under review and the date of this report.

Changes to the board/board committees
With effect from 1 October 2017 Mr MJ Jooste and Mr AB la Grange resigned as non-executive directors. On the same date Mr TLR de Klerk 
and Mr LJ du Preez were appointed as non-executive directors. There were no other changes to the board of directors during the period 
under review.

Dividend timetable
The timetable in respect of the dividend is as follows:

Day                                Event
Tuesday, 18 September 2018         Last day to trade
Wednesday, 19 September 2018       Shares trade ex dividend
Friday, 21 September 2018          Record date
Tuesday, 25 September 2018         Payment date

Share certificates may not be demateralised or remateralised between Wednesday, 19 September 2018 and Friday, 21 September 2018.

In terms of the taxation on dividends and the amendments to section 11.17 of the JSE Listings Requirements, the following additional 
information is disclosed:

(1) Local dividend tax rate is 20%.
(2) Dividends are to be paid from income reserves.
(3) The withholding tax, if applicable at the rate of 20%, will result in a net cash dividend per share of 18.4 cents.
(4) The issued ordinary share capital of KAP Industrial Holdings Limited is 2 677 874 340 shares at 14 August 2018.
(5) KAP Industrial Holdings Limited’s tax reference number is 9999/509/71/5.


KAP Industrial Holdings Limited (‘KAP’ or ‘the company’ or ‘the group’)
Non-executive directors: J de V du Toit (Chairman)*, KJ Grové (Deputy chairman), TLR de Klerk, LJ du Preez, IN Mkhari*, SH Müller*,
SH Nomvete*, PK Quarmby*, DM van der Merwe, CJH van Niekerk*
Executive directors: GN Chaplin (Chief executive officer), FH Olivier (Chief financial officer)
*Independent

Registered address
28 6th Street, Wynberg, Sandton 2090

Postal address
PO Box 18, Stellenbosch 7599

Telephone: 021 808 0900
Facsimile: 021 808 0901
E-mail: info@kap.co.za
www.kap.co.za

Transfer secretaries
Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank 2196

Company secretary
Steinhoff Secretarial Services Proprietary Limited

Auditors
Deloitte & Touche

Sponsor
PSG Capital Proprietary Limited
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