Group turnover up 7% Net asset value up 12% Final dividend per share 53,5 cents Introduction Transpaco maintained its consistent performance with good turnover growth and a slight increase in headline earnings per share despite challenging trading conditions. Turnover of R1,12 billion was attributable to a combination of volume growth and price increases. Aggressive marketing and sales strategies remain a prime imperative to maintain this momentum, especially given the difficult economic climate. Transpaco s performance was further strengthened by controlled operating costs, enhanced production and manufacturing efficiencies, and well-managed working capital which was supported by minimal net interest paid of R1,0 million (June 2012: R1,2 million). Notwithstanding the group s positive growth, margins remain under pressure from increased competition and higher input costs notably energy and plastic raw materials. Further, the transport and mining strikes during the year adversely affected certain Transpaco markets. Financial Results Turnover increased to R1,12 billion, up 6,7% (June 2012: R1,05 billion). The increase occurred in both the Plastic and Paper and Board divisions, enabling the group to maintain market share. Operating profit increased in the Paper and Board divisions, with a decline in the Plastic division resulting in group operating profit of R93,1 million (June 2012: R95,7 million). Transpaco s total comprehensive income grew 0,5% to R66,9 million (June 2012: R66,6 million). Headline earnings increased 2,0% to R66,7 million (2012: R65,3 million), translating into a 1,3% rise in headline earnings per share (HEPS). The weighted average number of shares in issue in calculating HEPS and EPS is 32 012 000 compared to 31 782 000 in the previous year.
Diluted HEPS increased 1,3% to 203,7 cents (June 2012: 201,1 cents). Cash generated from operations amounted to R100,1 million (June 2012: R101,9 million). Cash and cash equivalents at the end of the year were R83,7 million (June 2012: R70,6 Million), which reflected an increase of 18,6%. Transpaco s net interest-bearing debt-to-equity position remains cash positive. Interest cover improved to 90,5 times (June 2012: 67,6 times). Net asset value per share increased by 12,4% to 1 127cents (June 2012: 1 002 cents). Prospects The economic landscape continues to present challenges, with tough trading conditions. Management will remain focused on sound business and financial fundamentals in an effort to achieve Transpaco s organic growth ambitions. Expansion opportunities including acquisitions continue to be pursued. Transformation We are pleased to report that our fourth independent accreditation process in respect of B-BBEE during the year reflected an improvement in our level of contribution. Transpaco is now a Level 4 value added contributor. We are proud that our customers can count 125% of their purchases from Transpaco as preferential procurement. Dividend The board has declared a final gross cash dividend out of income reserves of 53,5 cents per share. This resulted in total dividends of 90,0 cents per share for the year (June 2012: 80,0 cents per share), an increase of 12,5%. After applying the dividend withholding tax of 15% a net final dividend of 45,47500 cents per share will be paid to those shareholders who are not exempt from the dividends tax. The issued shares at the date of declaration is 33 177 372 ordinary shares.
The salient dates for the dividend are as follows: Last date to trade shares cum dividend Friday, 13 September 2013 Shares trade ex-dividend Monday, 16 September 2013 Record date Friday, 20 September 2013 Payment date Monday, 23 September 2013 Share certificates may not be dematerialised or rematerialised between Monday, 16 September 2013 and Friday, 20 September 2013, both days inclusive. Basis of Preparation and Accounting Policies The reviewed condensed consolidated annual financial results have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), its interpretations adopted by the International Accounting Standards Board (IASB), the presentation and disclosure requirements set out in IAS 34 Interim Financial Reporting, the AC 500 standards as issued by the Accounting Practices Board or its successor, and comply with the Listings Requirements of JSE Limited and the South African Companies Act No 71 of 2008. The accounting policies are consistent in all material respects with those applied in the preparation of the group s annual financial statements for the year ended 30 June 2012. Review of Independent Auditors The group s auditors Ernst & Young Inc. have reviewed the condensed consolidated financial information for the year. Their unmodified review report is available for inspection at Transpaco s registered office. The review was performed in accordance with ISRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity. Approval and Preparation These condensed consolidated financial results have been prepared under the direction and supervision of the Financial Director, L Weinberg CA(SA). On behalf of the board AJ Aaron PN Abelheim L Weinberg Non executive Chairman Chief Executive Financial Director
Directors AJ Aaron (Chairman)* **; PN Abelheim (Chief Executive); L Weinberg (Financial Director); HA Botha* **; SR Bouzaglou; SI Jacobson*; D Thomas*; SP van der Linde* ** *non-executive **independent Date 21 August 2013 Auditors Ernst & Young Inc. Transpaco Limited Registration number: 1951/000799/06 Share code: TPC; ISIN ZAE000008480 Income tax number: 9975/112/71/6 Company Secretary HJ van Niekerk Sponsor Investec Bank Limited Registered Office 331 6th Street Wynberg Sandton Transfer Secretaries Computershare Investor Services (Pty) Limited 70 Marshall Street Johannesburg Website www.transpaco.co.za
STATEMENT OF COMPREHENSIVE INCOME Reviewed Audited 12 months % 12 months R'000 June 2013 Change June 2012 CONTINUING OPERATIONS Revenue 1 125 260 1 047 021 Turnover 1 123 204 7,6 1 044 221 Cost of sales (715 749) (660 088) Profit before operating costs and depreciation 407 455 6,1 384 133 Operating costs (282 697) (256 077) Depreciation (31 618) (27 486) Operating profit 93 140 (7,4) 100 570 Finance income 2 056 2 800 Finance costs (3 085) (4 032) Profit before taxation 92 111 (7,3) 99 338 Taxation (25 246) (29 019) Profit for the year from continuing operations 66 865 (4,9) 70 319 Loss for the year from discontinued operations (3 756) Profit for the year 66 865 66 563 Other comprehensive income Total comprehensive income 66 865 0,5 66 563 Weighted average number of shares in issue ( 000) 32 012 31 782 Diluted weighted average number of shares in issue ( 000) 32 719 32 485 Continuing operations Earnings per share (cents) 208,9 (5,6) 221,3 Diluted earnings per share (cents) 204,4 (5,6) 216,5 Headline earnings per share (cents) 208,2 (4,8) 218,7 Diluted headline earnings per share (cents) 203,7 (4,8) 214,0 Continuing and discontinued operations Earnings per share (cents) 208,9 (0,2) 209,4 Diluted earnings per share (cents) 204,4 (0,2) 204,9 Headline earnings per share (cents) 208,2 1,3 205,6 Diluted headline earnings per share (cents) 203,7 1,3 201,1 Dividend per share (cents)* 90,0 12,5 80,0 Reconciliation of headline earnings (R 000) Continuing operations Basic earnings 66 865 70 319 Profit on disposal of property, plant and equipment (208) (797) Headline earnings 66 657 (4,1) 69 522 Continuing and discontinued operations Basic earnings 66 865 66 563 Profit on disposal of property, plant and equipment (208) (1 230) Headline earnings 66 657 2,0 65 333 *Includes interim dividend of 36,5 cents (June 2012: 31 cents) and a dividend declared after the period of 53,5 cents (June 2012: 49 cents).
STATEMENT OF CASH FLOWS Reviewed Audited 12 months 12 months R'000 June 2013 June 2012 Cash flow from operating activities Cash generated from operations 100 067 101 893 Dividends paid (27 521) (23 452) Finance costs from continuing operations (3 085) (4 032) Finance costs from discontinued operations (452) Finance income from continuing operations 2 056 2 800 Finance income from discontinued operations 271 Taxation paid (23 768) (26 784) Net cash inflow from operating activities 47 749 50 244 Cash flow from investing activities Proceeds on disposal of property, plant and equipment 436 13 341 Expansion and replacement of property, plant and equipment (40 007) (67 007) Decrease in unlisted investments 17 Decrease/(increase) in long-term receivables 2 309 (2 951) Increase in short-term receivables (198) (2 110) Net cash outflow from investing activities (37 460) (58 710) Cash flow from financing activities Movement in treasury shares 148 1 698 Increase/(decrease) in interest-bearing borrowings 7 644 (926) Decrease in current portion of interest-bearing borrowings (4 947) (2 247) Net cash inflow/(outflow) from financing activities 2 845 (1 475) Net movement in cash for the year 13 134 (9 941) Cash and cash equivalents at the beginning of the year 70 552 80 493 Cash and cash equivalents at the end of the year 83 686 70 552
STATEMENT OF FINANCIAL POSITION Reviewed Audited 12 months 12 months R'000 June 2013 June 2012 ASSETS Non-current assets 202 602 195 482 Property, plant and equipment 193 901 185 659 Intangibles 482 482 Goodwill 3 204 3 204 Long-term receivables 642 2 951 Deferred taxation 4 373 3 186 Current assets 393 393 368 685 Inventories 120 416 123 521 Trade and other receivables 185 579 169 942 Short-term receivables 2 308 2 110 Taxation receivable 1 404 2 560 Cash and cash equivalents 83 686 70 552 Non-current asset classified as held-for-sale 885 885 TOTAL ASSETS 596 880 565 052 EQUITY AND LIABILITIES Capital and reserves 360 935 320 523 Issued share capital 320 320 Share premium 11 019 11 019 Other reserves 3 358 2 438 Distributable reserve 346 238 306 746 Non-current liabilities 53 491 46 694 Interest-bearing borrowings 32 612 24 968 Deferred taxation 20 879 21 726 Current liabilities 182 454 197 835 Trade payables and accruals 148 898 162 951 Provisions 17 449 16 186 Current portion of interest-bearing borrowings 13 244 18 191 Taxation payable 2 863 507 TOTAL EQUITY AND LIABILITIES 596 880 565 052 Number of shares in issue ( 000) Number of shares (net of treasury shares) 31 991 31 691 Net movement in treasury shares 26 300 Ranking number of shares 32 017 31 991 Salient features Net asset value per share (cents) 1 127 1 002 Operating margin % 8,3% 9,1% Net interest-bearing debt:equity ratio % Net cash positive Net cash positive Net interest cover (x) 90,5 67,7
SEGMENTAL ANALYSIS Paper Properties and and Total Plastic board group continuing Discontinued Total R'000 products products services operations operations group Turnover 2013 689 172 434 032 1 123 204 1 123 204 Turnover to customers 738 518 450 872 1 189 390 1 189 390 Less turnover to internal customers 49 346 16 840 66 186 66 186 Turnover 2012 644 389 399 832 1 044 221 9 976 1 054 197 Turnover to customers 685 076 417 509 1 102 585 11 320 1 113 905 Less turnover to internal customers 40 687 17 677 58 364 1 344 59 708 Operating profit 2013 36 028 53 360 3 752 93 140 93 140 Operating profit /(loss) 2012 54 981 44 227 1 362 100 570 (4 858) 95 712 Profit before tax 2013 34 557 52 943 4 611 92 111 92 111 Profit/(loss) before tax 2012 52 737 44 674 1 927 99 338 (5 039) 94 299 Capital expenditure 2013 15 861 22 838 1 308 40 007 40 007 Capital expenditure 2012 57 255 9 374 378 67 007 67 007 Assets 2013 334 186 165 794 96 900 596 880 596 880 Assets 2012 336 742 141 248 87 062 565 052 565 052 Liabilities 2013 133 908 76 209 25 828 235 945 235 945 Liabilities 2012 153 049 72 051 19 429 244 529 244 529
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Other Distributable R'000 Capital Premium Reserves Reserve Total Balance at 30 June 2011 317 11 019 1 204 261 940 274 480 Profit for the year 66 563 66 653 Other comprehensive income Total comprehensive income 66 563 66 653 Share-based payments 1 234 1 234 Dividend paid (23 452) (23 452) Movement in treasury shares 3 1 695 1 698 Balance at 30 June 2012 320 11 019 2 438 306 746 320 523 Profit for the year 66 865 66 865 Other comprehensive income Total comprehensive income 66 865 66 865 Share-based payments 920 920 Dividend paid (27 521) (27 521) Movement in treasury shares 148 148 Balance at 30 June 2013 320 11 019 3 358 346 238 360 935 DISCONTINUED OPERATIONS Reviewed Audited 12 months 12 months R'000 June 2013 June 2012 Turnover 9 976 Expenses (14 834) Operating loss (4 858) Finance income 271 Finance costs (452) Loss before tax from discontinued operations (5 039) Taxation 1 283 Loss after tax from discontinued operations (3 756) Loss per share (cents) from discontinued operations (11,9) Diluted loss per share (cents) from discontinued operations (11,6) Headline loss per share (cents) from discontinued operations (13,1) Diluted headline loss per share (cents) from discontinued operations (12,9) Cash flows from discontinued operations Net cash flows from operating activities (7 193) Net cash flows from investing activities 5 305 Net cash flows from financing activities Net cash flows (1 888) CAPITAL COMMITMENTS Reviewed Audited 12 months 12 months R'000 June 2013 June 2012 Capital expenditure authorised and contracted Property, plant and equipment 9 347 12 821