Green light for Nampak asset disposal
Group to extend disposal of some assets alongside two other divisions that were earlier earmarked for sale
sandile.mchunu@inl.co.za DIVERSIFIED packaging company Nampak yesterday said it would offload more businesses in order to shore up its bottom line. The group said the board gave its green light to extend the disposal of some assets alongside two other divisions that were earlier earmarked for sale.
Nampak said the spinning off of its glass division during the first half of the reporting period and crates and drums business in the second half were well on track. It said the two divisions were therefore recorded as discontinued operations in the results for the year to end September.
“The proposed sale of the glass division is proceeding as planned and according to schedule. In the second half, the board also made the decision to dispose of the crates and drums businesses, with the assets and liabilities of these operations being disclosed as assets held for sale,” the group said.
The group said the board decided not to resume dividends until the sustainability of cash transfers from Angola and Zimbabwe is assured and the disposal of the glass business is finalised. It said profit from continuing operations increased 29 percent to R1.2 billion, despite tough economic conditions in most territories in which it operated.
Nampak said consumers navigated high inflation, increased taxes, fuel price increases and other pricing pressures. It said revenue, however, declined 1 percent to R17.3bn, while headline earnings per share increased by 15 percent to 168.7 cents a share.
Chief executive André de Ruyter said the performance was pleasing in a tough economic environment in most of the geographies in which they operate.
“Good cost control led to operational efficiencies, with improved margins for Bevcan and the recovery of DivFood, despite lacklustre demand in South Africa,” De Ruyter said.
He said plastics in the UK delivered profitability as promised, while plastics South Africa had a tough year, due to a very competitive landscape.
“The significant improvement in the availability of foreign currencies in Angola, sustained liquidity and market share growth for beverage cans in Nigeria, and strong demand in Zimbabwe resulted in improved performance in the rest of Africa,” De Ruyter said.
Nampak said it forecast that consumer spending to remain under pressure in light of inflationary pressures from the recent Value-Added Tax increase, ongoing fuel and electricity hikes as well as a recent recession.
“In response to expected subdued demand in the short-term, Nampak will continue to focus on improving operational efficiencies in order to mitigate these demand pressures,” the group said.
Nampak shares declined 6.69 percent on the JSE yesterday to close at R14.51.