Press Room

Disaki buyout boosts Transpaco

24 August 2011

TRANSPACO said yesterday turnover reached the R1bn mark in the year ended June, for the first time.

It said good overall growth was maintained on improved operating efficiency and stringent control of expenses. This was supported by a reduction in net interest paid, and the acquisition of paper business Disaki Cores and Tubes last year.

Transpaco is the major supplier of plastic shopping bags to Checkers, Spar and Pick n Pay. Its paper business, including tubes and cores, supplies the pharmacy, cosmetic and veterinary industries.

"We’re very happy with the results. It’s been a good year for us," CEO Phillip Abelheim said yesterday. The group got a nice boost on the paper and packaging side as a result of the Disaki buyout, he said. But trading conditions had been tough, mainly because of competitive imports from China and the rising cost of electricity.

The group said another batch of about 3,3-million shares were issued during the year, after its empowerment shareholder converted preference shares into ordinary shares.

This slightly weighed down headline earnings per share. Operating profit rose 14% to R95m, notwithstanding a fall in operating profit in the plastics division. Operating profit in the paper division increased because of the Disaki acquisition.

Interest cover doubled to 33,3 times in the year, with cash generated from operations amounting to R129m, from R99m last year, an increase of 30%.

Mr Abelheim said the group had strong subsidiaries and was well diversified. The plastics division makes up 65% of the group, with paper making up the rest.

Transpaco said net asset value per share increased 12% to 866c, from 772c last year.

The group said it would continue its proven growth strategy by maintaining strict management of working capital, and by organically expanding businesses.

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