Astrapak Group’s presentation of the Interim Results for the six months ending 31 August 2016 revealed the continued traction of the five-year turnaround strategy, now in its fourth year, posting an increase in revenue of 15,2% to R734,3 million and an increase in profit from operations by 25,4% to R27,6 million.
During presentation of the interim results in Sandton on 29 September, and in Newlands on 30 September, Astrapak CEO Robin Moore stated that the key features of the period from continuing operations included the after tax profit increases by 65,6%; the net realisable value of assets held-for-sale of R300,8 million; and the commercialising of major personal care and Fast Moving Consumer Goods (FMCG) contracts.
With the Group substantially exiting non-core businesses and surplus assets, they have methodically eliminated high corporate costs in line with the long-term strategy.
Astrapak Managing Director and CFO, Manley Diedloff, said that it was a “relatively clean result with no exceptional items”. He stated that a net R173 million was received from the sale of non-core assets at good value.
Diedloff said that trading conditions remained difficult, exacerbated by exchange rate volatility and intensified competitor activity.
Astrapak Group’s three largest markets are food, personal care and toiletry, and automotive. A significant FMCG contract is producing as expected and to customer satisfaction, and there is good visibility on future workflow.
Focusing on the strategic outlook, Moore said challenging conditions continue to be experienced due to the political uncertainty, a weak but abnormally volatile rand, customer and consumer price sensitivity, low business confidence and rising dollar polymer prices.
“Despite the external difficulties, we have successfully focused on Group strategic objectives and delivery on major projects,” said Moore.
The Group substantially exited non-core businesses and surplus assets, eliminating high corporate costs deliberately incurred in line with the long-term strategy. The Johannesburg-based head office was closed, with a support structure for nine operations now established in Durban. Approximately R30 million in annualised corporate costs should be eliminated by February 2017.
Moore said that the returns from major projects have begun to manifest and were expected to accelerate, with costs reducing and expected to fall further.
Click here to view the Condensed unaudited Interim Results for the six months ended 31 August 2016