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MASTER PLASTICS LIMITED - Unaudited Condensed Consolidated Results for the Six Months Ended 31 August 2018

Release Date: 18/09/2018 16:30
Code(s): MAP     PDF:  
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Unaudited Condensed Consolidated Results for the Six Months Ended 31 August 2018

MASTER PLASTICS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2016/323930/06)
Share code: MAP  ISIN: ZAE000242921
("Master Plastics" or "the Company" or "the Group")

Unaudited condensed consolidated results for the six months ended 31 August 2018

COMMENTARY

INTRODUCTION
Master Plastics is involved in the manufacture and provision of specific products and solutions to customers operating
in the agricultural, food, produce, dairy and general industrial markets. Its offering extends beyond traditional
plastic products, also being a market leader in the supply and design of undercover farming nets and structures and
geotextile fibres for concrete reinforcement. The Group will continue to explore opportunities to better service its 
chosen end markets and provide a broader range of its customers’ requirements.

EXTERNAL ENVIRONMENT
Our current operating environment is not without significant headwinds, the majority of which are of a macro-economic
nature and not within our control. The on-going land policy debate has had a negative impact on both investment into the
agricultural sector and the exchange rate. The drought experienced in the Western Cape, together with the land policy debate,
led to the agricultural sector being the major contributor to the recession reported in South Africa. The listeria
outbreak towards the end of last year continues to depress both the processed meats and spice markets. These issues have
directly impacted demand during the period and the weakening exchange rate has resulted in significant increases in polymer
input costs which directly impacted working capital investment. Together with a weak economy, an ever-increasing cost of
living and increased taxes, this has resulted in a platform not conducive to trading during the first six months. The
Group expects these factors to continue to exert pressure on the trading performance over the balance of the financial
year.

STATE OF THE BUSINESS
Our focus remains on those elements that are currently within our control. These include our commitment to capital
allocation and cash management disciplines, managing operational costs and efficiencies, maximising utilisation across our
asset base and sustaining a strong financial position. We continue to investigate opportunities to invest in
expansionary and value-enhancing growth to improve overall shareholder returns through the business cycle. During the
reporting period we completed the expansion of the Plusnet-Geotex facility and entered into an exclusive license agreement
with a leading international partner that will see us increase our product offering into our core markets and potentially
expand our business into new markets. 

Despite challenging trading conditions, all three of the underlying operations, being Barrier Film Converters
Proprietary Limited, Peninsula Packaging and Plusnet-Geotex (both divisions of Master Plastics) remain profitable and 
continue to enjoy a preferred supplier status in many of their chosen market segments.

FINANCIAL RESULTS
Revenue and cost management remains a challenge in difficult economic conditions. Revenue increased by 3.2% to 
R 243.6 million (2017: R 236.0 million) due to selling price increases resulting from input polymer price and overhead
recoveries. Volumes declined by 2.0% in relation to the comparative period. Despite the volume decline, an increased
depreciation charge following significant capacity enhancing investments into Plusnet-Geotex and the higher direct labour 
costs associated therewith, the Group has maintained its gross profit margin at 21.6% (2017: 22.2%) though improved 
efficiencies and cost management disciplines. 

Administrative and other expenses of R20.9 million (2017: R 17.7 million) increased by R 4.6 million over that of the
comparative period, having adjusted for the benefit from the fair value adjustment on the long-term financial liability
of R 1.4 million in the current period. This increase is attributable to an increased Share Appreciation Rights expense
of R 1.1 million (2017: R 0.1 million) and R 2.5 million of holding company expenses incurred in the current year not
incurred in the comparative period due to the unbundling of the Group from Astrapak Limited at the end of May 2017. 
The balance of the increase is attributable mainly to inflation. Distribution and selling expenses increased by
17.7% to R 16.8 million (2017: R14.3 million) - the increase is attributable to additional warehousing and transport
costs incurred in relation to the plant extension at Plusnet-Geotex and the enhancement of the Group’s sales team with the
appointment of a senior Business Development Manager in the business. There is however scope to improve on current
processes and disciplines in this area of the business and management has introduced measures to better control these costs
going forward. 

Gearing, as represented by the ratio of net debt to equity, increased to 22.2% from the level of 0.6% reported at 
28 February 2018. The increase in gearing since the financial year end was as a direct result of the R 38.0 million capacity
expansion investment into Plusnet-Geotex during the reporting period and an increased investment in working capital of
R 14.0 million resulting from higher input polymer pricing, strategic stock builds and the timing of debtor collections.
Consequently, a net interest expense of R 1.4 million was incurred during the period in comparison with net interest
income of R 0.4 million during the same period in 2017. It should be noted that Master Plastics also declared
a R 75.0 million dividend during the comparative period to Astrapak Limited and concluded a further R 4.1 million in share buy 
backs during the second half of the last financial year which results in the net interest expense and income numbers not being
directly comparable. 

The effective tax rate of the Group reported is 24.8% (2017: 26.0%) with the difference to the statutory tax rate of
28% being due to certain permanent differences associated with government incentives and the fair value adjustment on the
long-term financial liability. The Group has a total of R 32.1 million (2017: R 42.1 million) in tax losses available
for utilisation in future periods and these should be fully utilised based on forecasted levels of profitability.

The Group has reported basic earnings and headline earnings of R 10.1 million or 8.6 cents per share. Basic earnings
and headline earnings of R 15.6 million or 12.1 cents per share and R 15.8 million or 12.2 cents per share respectively,
were reported in the comparative period.

The Group did not declare any dividends and did not conclude any share repurchases during the period. The issued
number of shares in the Company remained at 117 535 232.

The Group generated R 24.1 million (2017: R 28.0 million) in cash from operations before working capital changes. The
investment in working capital increased by R14.0 million from 28 February 2018 with R 7.7 million directly attributable
to higher input polymer costs and R 3.2 million to strategic stock builds whilst the balance is associated with the
timing of debtor receipts which only occurred post the reporting date.

Capital expenditure of R 41.5 million was incurred during the period with a further R 9.1 million having been
committed as at the reporting date. 

Net Tangible Asset Value per share is R 1.66 (2017: R 1.39) in comparison with R 1.57 as reported at 28 February 2018.

PROSPECTS
The pressures from the external factors will continue to impact business performance for the balance of the
financial year. The Group will however continue to focus on the execution of its stated business strategy and look to 
explore and invest in opportunities to increase utilisation, enhance efficiency and to support organic, expansionary and
value-adding growth.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT
The Group is committed to transformation and achieved a Level 2 (Empowered Supplier) rating in accordance with the
Codes of Good Practice issued in terms of section 91(1) of the Broad-Based Black Economic Empowerment Act 53 of 2003
(gazetted 11 October 2013).

SUBSEQUENT EVENTS
On 17 September 2018 Plusnet-Geotex (a division of Master Plastics Limited) was issued with a notice of strike in
terms of section 64 of the Labour Relations Act. The strike which relates to a wage dispute, will accordingly commence 
on 19 September 2018.

There are no other subsequent events to be reported upon.

DIVIDEND DECLARATIONS
No dividend has been declared for the period.

APPROVAL AND PREPARATION
The Condensed Financial Statements presented herein have been prepared under the direction and supervision of the
Chief Financial Officer, Salome Ratlhagane CA (SA).

DOCUMENTS
This announcement is available via Master Plastics’ website: www.masterplasticsgroup.com, or from the registered
office of the Company, or its Corporate and Designated Adviser Merchantec Capital, Monday to Friday 08:30 to 16:30.

ACKNOWLEDGEMENT AND APPRECIATION
The Board would like to express its appreciation to all stakeholders for their continued commitment, efforts and
support.

On behalf of the Board            

Manley Diedloff                        Salome Ratlhagane
Chief Executive Officer                Chief Financial Officer

Johannesburg
18 September 2018            

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                                                     Audited
   (R’000)                                                   Unaudited         Unaudited           financial     
                                                      six months ended  six months ended          year ended     
                                                             31 August         31 August         28 February
                                             Notes                2018              2017                2018 

   Revenue                                        9            243 610           235 958             504 479    
   Cost of sales                                              (191 010)         (183 477)           (386 249)   
   Gross profit                                                 52 600            52 481             118 230    
   Administrative and other expenses                           (20 917)          (17 745)            (39 293)    
   Distribution and selling costs                              (16 821)          (14 291)            (29 834)    
   Other items of income and expenditure                             -               254                   -    
   Profit from operations                        10             14 862            20 699              49 103    
   Investment income                                               148             1 077               1 211    
   Finance cost                                                 (1 592)             (684)             (1 499)    
   Profit before taxation                                       13 418            21 092              48 815    
   Taxation expense                                             (3 330)           (5 474)            (12 460)    
   Profit for the period                                        10 088            15 618              36 355    
   Other comprehensive profit/(loss)                                 -                 -                   -    
   Total comprehensive profit for the period                    10 088            15 618              36 355    
                                                                                                                
   Basic earnings per ordinary share (cents)     11               8,58             12,10               29,46    


RECONCILIATION OF HEADLINE EARNINGS
                                                                                                     Audited
   (R’000)                                                     Unaudited         Unaudited         financial       
                                                        six months ended  six months ended        year ended   
                                                               31 August         31 August       28 February          
                                                Note                2018              2017              2018 
   Profit attributable to ordinary shareholders                   10 088            15 618            36 355    
   Headline earnings adjustment                                        6               154                55    
   Loss/(profit) on sale of plant and equipment                        9               214              (300)    
   Impairment of plant and equipment                                   -                 -               377    
   Tax effect of adjustments                                          (3)              (60)              (22)    
   Headline earnings attributable to ordinary                             
   shareholders                                                   10 094            15 772            36 410    
   Headline earnings per ordinary share (cents)    11               8,59             12,22             29,51    


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                                        Audited
   (R’000)                                                      Unaudited          Unaudited          financial      
                                                         six months ended   six months ended         year ended           
                                                                31 August          31 August        28 February         
                                                Notes                2018               2017               2018 
   Assets                                                                                                      
   Non-current assets                                             184 384            158 366            153 525    
   Property, plant and equipment                    3             179 773            150 628            148 216    
   Deferred taxation assets                                         4 611              7 738              5 309    
   Current assets                                                 173 118            159 632            174 407    
   Inventories                                                     63 058             49 575             59 962    
   Trade and other receivables                      3             100 384             83 691             97 917    
   Cash and cash equivalents                        6               7 400             26 366             15 985    
   Taxation asset                                                   2 276                  -                543    
   Assets classified as held-for-sale               4               9 449                  -              8 985    
   Total assets                                                   366 951            317 998            336 917    
   Equity and liabilities                                                                                          
   Total equity                                                   194 600            165 037            184 512    
   Equity attributable to ordinary                                                                      
   shareholders of the parent                       8             194 600            165 037            184 512    
   Non-current liabilities                                         69 786             44 130             44 057    
   Long-term interest-bearing debt                  5              36 018              6 662              9 117    
   Long-term financial liability                    7              14 182             15 528             15 528    
   Deferred taxation liabilities                                   19 586             21 940             19 412    
   Current liabilities                                            102 565            108 831            108 348    
   Trade and other payables                         3              87 969            101 003            100 289    
   Short-term interest-bearing debt                 5              14 596              7 379              8 059    
   Taxation payable                                                     -                449                  -    
   Total equity and liabilities                                   366 951            317 998            336 917    


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                        Audited
   (R’000)                                                     Unaudited          Unaudited            financial        
                                                        six months ended   six months ended           year ended     
                                                               31 August          31 August          28 February
                                                Note                2018               2017                 2018 
   Opening balance                                               184 512             227 238             227 238    
   Comprising:                                                                                                      
   Ordinary share capital                                        231 323             235 404             235 404    
   Common control reserve on acquisition                                                                
   of equity interests in subsidiaries              8             (7 584)             (7 584)             (7 584)    
   Retained loss                                                 (39 227)               (582)               (582)    
                                                                                                                    
   Movements:                                                     10 088             (62 201)            (42 726)   
   Ordinary share capital repurchased                                  -              (2 819)             (4 081)    
   Profit for the period                                          10 088              15 618              36 355    
   Dividend paid to parent prior to unbundling                         -             (75 000)            (75 000)    
   Closing balance                                               194 600             165 037             184 512    
   Comprising:                                                                                                      
   Ordinary share capital                                        231 323             232 585             231 323    
   Common control reserve on acquisition                                                                
   of equity interests in subsidiaries              8             (7 584)             (7 584)             (7 584)    
   Retained loss                                                 (29 139)            (59 964)            (39 227)    
   Total equity                                                  194 600             165 037             184 512    


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                    Restated*            Audited
   (R’000)                                                     Unaudited           Unaudited           financial                       
                                                        six months ended    six months ended          year ended     
                                                               31 August           31 August         28 February
                                                   Note             2018                2017                2018 
   Cash generated from operations before 
   working capital changes                                        24 057              27 965              66 041    
   Increase in working capital                                   (13 968)             (2 182)            (23 253)    
   Net interest and taxation paid                                 (5 635)             (5 083)            (13 841)    
   Dividend paid to parent prior to unbundling                         -             (75 000)            (75 000)    
   Net cash inflow/(outflow) from operating activities             4 454             (54 300)            (46 053)    
   Additions to property, plant and equipment                     (3 174)             (6 312)            (13 239)    
   Payment of contingent purchase consideration                        -                   -              (6 224)    
   Proceeds on disposal of plant and equipment                       141                   -                 300    
   Net cash outflow from investing activities                     (3 033)             (6 312)            (19 163)    
   Repayment of interest-bearing debt                            (10 066)             (4 385)             (8 900)    
   Repurchase of ordinary shares                                       -              (2 819)             (4 081)    
   Net cash outflow from financing activities                    (10 066)             (7 204)            (12 981)    
   Net decrease in cash and cash equivalents                      (8 585)            (67 816)            (78 197)    
   Net cash and cash equivalents at beginning                                                           
   of the period                                                  15 985              94 182              94 182    
   Net cash and cash equivalents at end                                                                 
   of the period                                     6             7 400              26 366              15 985    

*Restated for the cash flow treatment relating to assets purchased in terms of instalment sales agreement.


CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS

A segmentation of the financial information for the six months ended 31 August 2018 with 31 August 2017 comparatives
is presented below:

   (R’000)                                                 Food                                                        
                                                      & Produce      Construction      Industrial      Total Group    
   Revenue for segment                 2018             172 139            31 905          39 566          243 610    
                                       2017             165 642            34 444          35 872          235 958    
   Revenue for external customers      2018             172 139            31 905          39 566          243 610    
                                       2017             165 642            34 444          35 872          235 958    
   Profit from operations              2018              13 412               362           1 088           14 862    
                                       2017              17 781             1 633           1 285           20 699    
   Profit before taxation              2018              11 959               217           1 242           13 418    
                                       2017              18 141             1 628           1 323           21 092    
   Total assets                        2018             245 448            52 135          69 368          366 951    
                                       2017             217 919            30 314          69 765          317 998    
   Total liabilities                   2018             122 456            37 016          12 879          172 351    
                                       2017             103 227            30 683          19 051          152 961    
   Capex                               2018              37 808             3 467             178           41 453    
                                       2017              11 468               386              67           11 921    
   Depreciation                        2018               6 618               638           2 026            9 282    
                                       2017               4 617               498           1 937            7 052    


SUPPLEMENTARY INFORMATION
                                                                                                          Audited 
                                                                   Unaudited          Unaudited          financial
                                                            six months ended   six months ended         year ended
                                                                   31 August          31 August        28 February
                                                                        2018               2017               2018                       
   Number of ordinary shares in issue - net 
   of repurchases (‘000)                                             117 535            118 373            117 535          
   Weighted average number of ordinary shares in                                                       
   issue over period (‘000)                                          117 535            129 071            123 399          
   Net asset value per share (cents)                                     166                139                157          
   Net tangible asset value per share (cents)                            166                139                157          
   Closing share price (cents)                                           140                160                165          
   Market capitalisation (R million)                                     165                189                194          
   Net interest-bearing debt/(cash) as percentage                                                      
   of equity (%)                                                        22,2%               (7%)               0,6%          
   Net interest-bearing (debt)/cash                                  (43 214)            12 325             (1 191)          
   Long-term interest-bearing debt                                   (36 018)            (6 662)            (9 117)          
   Short-term interest-bearing debt                                  (14 596)            (7 379)            (8 059)          
   Cash and cash equivalents                                           7 400             26 366             15 985          
   Return on average capital employed (ROCE)                             5,9%               9,6%              20,2%          
                                                                                                                            
   Normalised Earnings before interest, taxation,                                                      
   depreciation and amortisation ( Normalised EBITDA”)**                                               
                                                                                                                            
                                                                      23 905             28 036             65 291          
   Profit/(loss) from operations                                      14 862             20 699             49 103          
   Depreciation                                                        9 282              7 052             14 893          
   Earnings/(loss) before interest, taxation, depreciation                                             
   and amortisation ( EBITDA”)                                        24 144             27 751             63 996          
   Loss/(profit) on sale of plant and equipment                            9                214               (300)          
   Fair value adjustment on long-term financial liability             (1 346)                 -                  -          
   Impairment of plant and equipment                                       -                  -                377          
    IFRS 2 Share Appreciation Rights Expense                           1 098                 71              1 218          
   Normalised EBITDA margin                                              9,8%              11,9%              12.9%          
                                                                                                                            
   Normalised Profit from operations**                                14 623             20 984             50 398          
   Normalised Profit from operations margin                              6,0%               8,9%              10,0%          
 
 ** Normalised EBITDA and Normalised Profit from Operations are determined by adjusting the reported EBITDA and 
 Profit from operations numbers for those items deemed to be non-recurring, capital in nature or in view of the 
 Company distorts the reporting of the sustainable profitability of the Group. The adjustables used in determining 
 the Normalised Profit from operations are the same as those used for purposes of determining the Normalised EBITDA.                           

 
NOTES TO THE CONDENSED AUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PREPARATION
   The condensed unaudited consolidated financial statements are 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, Financial Reporting Pronouncements as issued by the
   Financial Reporting Standards Council, as well as the requirements of the Companies Act of South Africa and the JSE
   Limited’s Listings Requirements. The condensed audited consolidated financial statements also contain, at a minimum the
   information required by International Accounting Standard 34 Interim Financial Reporting. 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 consolidated and separate financial statements for the financial year ended 28 February 2018. Standards and
   interpretations that were effective, being IFRS 15 and IFRS 9, were adopted.

2. COMPARATIVE FIGURES
   The condensed unaudited consolidated financial statements for the six months ended 31 August 2017 and the condensed
   audited results for the financial year ended 28 February 2018 have been presented.
     
3. PROPERTY, PLANT AND EQUIPMENT 
                                                                                                        Audited                              
   (R’000)                                                   Unaudited          Unaudited             financial   
                                                      six months ended   six months ended            year ended
                                                             31 August          31 August           28 February   
                                                                  2018               2017                  2018   
   Opening net carrying value                                  148 216            145 759               145 759    
   Additions                                                    40 989             11 921                26 252    
   Disposals                                                      (150)                 -                     -    
   Assets classified as held-for-sale - 
   properties excess to requirements                                 -                  -                (8 739)    
   Impairment of item of machinery due to redundancy                 -                  -                  (163)    
   Depreciation                                                 (9 282)            (7 052)              (14 893)    
   Closing net carrying value                                  179 773            150 628               148 216    
                                                                                                                   
   Capital expenditure for the period                           40 989             11 921                26 252    
   Capital commitments                                                                                             
   - contracted not spent                                        9 144              5 536                33 316    
   - authorised not contracted                                       -              1 015                     -    
   
   A total of R 1.3 million of the contracted but not yet spent total above has been paid by the finance provider in the
   form of progress payments made to suppliers of equipment. The Group has accordingly recognised both an asset and a
   corresponding liability as part of Trade and other receivables and Trade and other payables for this amount.

4. ASSETS HELD-FOR-SALE                                                                                                
   The assets held-for-sale relate to assets that are 
   being disposed of:                                               
                                                                                                        Audited
   (R’000)                                                   Unaudited          Unaudited             financial   
                                                      six months ended   six months ended            year ended
                                                             31 August          31 August           28 February   
                                                                  2018               2017                  2018   
   Opening balance at the beginning of the period               8 985                214                    214    
   Property*                                                      464                  -                    246    
   Property transferred from property, plant and equipment          -                  -                  8 739    
   Assets previously held-for-sale now impaired                     -               (214)                  (214)    
   Assets held-for-sale at the end of the period                9 449                  -                  8 985    
   *Property additions capitalised to assets held-for-sale                                                         

   Assets held-for-sale at end of the period represent land and buildings which are deemed excess to requirements by the
   Group. Management is committed to a plan to sell the asset and has actively marketed the property for sale at a price
   that is reasonable in relation to the property’s current fair value. An independent broker has been appointed to market
   the properties on the Group’s behalf.

5. LONG-TERM AND SHORT-TERM INTEREST-BEARING DEBT
   Long-term and short-term interest-bearing debt represent asset-based finance liabilities which are measured at
   amortised cost using the effective interest rate method.

6. CASH AND CASH EQUIVALENTS 
                                                                                                        Audited
   (R’000)                                                   Unaudited          Unaudited             financial   
                                                      six months ended   six months ended            year ended
                                                             31 August          31 August           28 February   
                                                                  2018               2017                  2018   
                                                                                           
 Bank balances                                                   7 400             26 366                15 985    

7. LONG-TERM FINANCIAL LIABILITY                                      
   Long-term financial liability                                14 182              15 528               15 528    

   The long-term financial liability, reflected at fair value, represents the estimated final payment that will be due to
   the vendor of Coralline Investments Proprietary Limited. This estimated amount was re-calculated at the end of 
   28 February 2018 and 31 August 2018 based on the actuals for the February 2017 and February 2018 financial years and the
   forecast for the financial year ending 28 February 2019. The decrease in the long-term financial liability is attributed 
   to the lower than anticipated trading levels over the period. The original transaction occurred prior to the disposal of the
   Plusnet-Geotex business to Master Plastics by Astrapak Limited in preparation of the unbundling. The final amount will be
   determined upon finalisation of the Group audited results for the financial year ended 28 February 2019, which is
   anticipated to be towards the end of May 2019. The amount finally due will therefore be re-calculated based on the agreed
   valuation formula and the actual results achieved over the financial years ended 28 February 2017 to 28 February 2019 and
   could accordingly still vary from the amount of the financial liability currently reported. The final amount due will be
   settled over 2 financial years, with 70% being settled in May 2019 and the balance on 28 February 2021. The long-term
   financial liability is classified as a level 3 fair value in terms of the fair value hierarchy and has been discounted to
   its present value at a rate of 10%.

8. COMMON CONTROL RESERVE
   The common control reserve arose on the acquisition of equity interest by Master Plastics in Barrier Film Converters
   Proprietary Limited, Micawber 430 Proprietary Limited and Micawber 451 Proprietary Limited in terms of the restructure
   detailed in note 3 and represents the differential between the net asset value acquired and the value of the shares issued
   for such net asset value by Master Plastics, which value represented the carrying value in the books of the parent.

9. REVENUE                                                                                             
   Revenue for the group                                          253 835             243 977               529 089    
   Transactions with other entities in the group                  (10 225)             (8 019)              (24 610)    
   Revenue for external customers                                 243 610             235 958               504 479    

10. PROFIT FROM OPERATIONS
                                                                                                            Audited
    (R’000)                                                     Unaudited           Unaudited             financial     
                                                         six months ended    six months ended            year ended      
                                                                31 August           31 August           28 February      
                                                                     2018                2017                  2018                 
    Profit from operations has been determined 
    after taking the following items into account:                                       
    (Loss)/profit on disposal of plant and equipment                  (9)                 (214)                 300    
    Auditors remuneration                                             536                  491                  811    
    Depreciation                                                    9 282                7 052               14 893    
    Staff costs                                                    48 031               43 218               87 239    
    Rental expense                                                  4 654                4 489                9 230    
    Fair value adjustment on long-term financial liability         (1 346)                   -                    -    
    Foreign exchange (gains)/ losses realised                         (15)                  85                  313    
    Impairment of machinery due to redundancy                           -                    -                  377    
    IFRS 2 Share Appreciation Rights Expense                        1 098                   71                1 218    

11. BASIC EARNINGS PER ORDINARY SHARE AND HEADLINE EARNINGS PER ORDINARY SHARE
    Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of Master
    Plastics by the weighted average number of shares in issue over the period that the attributable profit or loss was
    generated.

    Headline earnings per ordinary share is calculated by dividing the headline earnings attributable to ordinary
    shareholders of the parent by the weighted average number of shares in issue over the period that the headline earnings were
    generated.

12. SUBSEQUENT EVENTS
    On 17 September 2018 Plusnet-Geotex (a division of Master Plastics Limited) was issued with a notice of strike in
    terms of section 64 of the Labour Relations Act. The strike which relates to a wage dispute, will accordingly commence on 
    19 September 2018.
    
    The Board is not aware of any other facts or circumstances material to the appreciation of this report that may have
    occurred between 31 August 2018 and the date of this report.
Date: 18/09/2018 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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