Africa boosts Nampak profits
Business Live - Jun 5th 2012, 08:39
Packaging company Nampak (NPK) on Tuesday announced a 10% group revenue increase and 71% fillip from the rest of African operations on results for the year ended 31 March 2012.
The group’s headline earnings per share from continuing operations were up 13% as a result of an improvement in operating profit and a reduction in the effective tax rate, the company said.
Nampak said the dividend had increased by 19% to 40,5 cents per share and was evidence of the cash-generating ability of the company. Operating profit from continuing operations increased by 8% and the trading margin improved to 10,8%.
“An improvement in plastics was partially offset by a flat performance from metals and glass and softer performances from tissue and paper and flexibles,” Nampak said.
“For the first time in many years there was good growth in beverage cans for consumption in South Africa. Corrugated continued to improve with the paper mill and converting plants operating at higher efficiencies. The diversified can business also performed well on strong demand for aluminium aerosol cans,” said CEO Andrew Marshall.
Marshall added that the higher trading income from the rest of Africa was “especially satisfying”.
The beverage can operation in Angola almost reached full capacity in its first year of operation whilst the Zambian businesses performed substantially better than last year.
Marshall said Nampak’s strategy of generating at least 25% of its revenue from the rest of Africa remained in place, with a number of opportunities in the pipeline.
The CEO explained that the group had now entered the glass business and expected a significant contribution from this segment of business.
Marshall explained that in Europe the acquisition of Four Four Two last year had contributed to a 41% increase in trading income.
The trading margin and investment returns continued to improve with return on equity increasing to 24% compared to only 14% in 2009.
Venturing into future prospects of Nampak, Marshall said the next six months should see steady growth in the SA operations.
Benefits from the investments in the rest of Africa are expected to continue contributing to an improvement in profitability for the full year.
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