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Nampak Limited
(Incorporated in the Republic of South Africa)
Registration Number: 1968/008070/06
Share Code: NPK
ISIN: ZAE000071676
('Nampak' or 'the Group')
VOLUNTARY TRADING UPDATE AHEAD OF THE 2021 ANNUAL GENERAL MEETING
Nampak will hold its Annual General Meeting on 9 February at 14h00 Central
Africa Time (UTC+2). This announcement serves to update the market on
general trading conditions, compliance with funding covenants in the first
quarter of the 2021 financial year (1Q21) and the impact on Nampak of the
third alcohol ban in South Africa.
General trading conditions in 1Q21
Group revenue was up 1% for the quarter measured on a year-on-year basis,
with good trading conditions in South Africa and Nigeria. Cost saving
initiatives undertaken during the prior financial year yielded benefits,
complemented by export sales, which were reflected in the group trading
profit improving by 18% relative to 1Q20. Operating profit for the quarter
increased significantly over the prior year, partly as a result of the non-
recurrence of adverse adjusting items.
With eased COVID-19 restrictions over the quarter ended December 2020, the
Metals division experienced healthy beverage can demand in South Africa and
the export contracts secured by Bevcan South Africa were serviced as
planned.
Funding covenants complied with
Following the renegotiation of the group's funding covenants during
September 2020, these will be measured and reported on a quarterly basis for
the duration of the current financial year. Nampak has complied with these
covenants for the first measurement period ended 31 December 2020.
EBITDA is calculated on a rolling 12-month period for measurement of the
covenants. Net debt:EBITDA at 4.49 times remained below the revised 5.25
times limit and EBITDA:interest cover at 2.62 times was greater than the
required minimum of 2.25 times.
Impact of third alcohol ban in South Africa
The third alcohol ban (sale, dispensing and distribution of alcohol) in
South Africa, announced on 28 December 2020, was subsequently lifted two
weeks earlier than originally anticipated, effective 2 February 2021. While
certain categories within our Paper and Plastics businesses have lost sales
during this period, the impact on the Metals businesses is expected to be
much less than the previous bans, as demand for cans from our major
customers remained largely unaffected during the first three weeks of the
ban. The impact of the alcohol ban will be visible in the 2Q21 results and
its extent depends on the level and pace of restocking by consumers
following the upliftment of the ban.
The financial information contained in this statement is based on unaudited
management accounts and the Company is satisfied with the quality of those
management accounts. The information has not been reviewed or reported on by
the Company's external auditors.
Nampak expects to release its 2021 half-year results on or about 28 May
2021.
Bryanston
5 February 2021
Sponsor: UBS South Africa (Pty) Ltd
Forward-looking statements: Certain statements in this document are not
reported financial results or historical information, but forward-looking
statements. These statements are predictions of or indicate future events,
trends, future prospects, objectives, earnings, savings or plans. Examples
of such forward-looking statements include, but are not limited to,
statements regarding volume growth, increases in market share, exchange rate
fluctuations, shareholder return and cost reductions. Forward-looking
statements are sometimes, but not always, identified by their use of a date
in the future or such words as 'believe', 'continue', 'anticipate',
'ongoing', 'expect', 'will', 'could', 'may', 'intend', 'plan', 'could',
'may', and 'endeavour'. By their nature, forward-looking statements are
inherently predictive, speculative and involve inherent risks and
uncertainties, because they relate to events and depend on circumstances
that may or may not occur in the future. If one or more of these risks
materialise, or should underlying assumptions prove incorrect, our actual
results may differ materially from those anticipated. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to: changes in
economic or political conditions and changes to the associated legal,
regulatory and tax environments; lower than expected performance of existing
or new products and the impact thereof on the Group's future revenue, cost
structure and capital expenditure; the Group's ability to expand its
portfolio; skills shortage; changes in foreign exchange rates and a lack of
market liquidity which holds up the repatriation of earnings; increased
competition, slower than expected customer growth and reduced customer
retention; acquisitions and divestments of Group businesses and assets and
the pursuit of new, unexpected strategic opportunities; the extent of any
future write-downs or impairment charges on the Group's assets; the impact
of legal or other proceedings against the Group; uncontrollable increases to
legacy defined benefit liabilities and higher than expected costs or capital
expenditures. When relying on forward-looking statements to make investment
decisions, you should carefully consider both these factors and other
uncertainties and events. Forward-looking statements apply only as of the
date on which they are made, and we do not undertake any obligation to
update or revise any of them, whether as a result of new information, future
events or otherwise.
Date: 05-02-2021 08:00:00
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