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Article by Nampak 29 May 2012

Nampak increases profit from Africa by 60%

Nampak today released its results for the half-year ended 31 March 2012.

Headline earnings per share from continuing operations were 13% higher as a result of an improvement in operating profit and a reduction in the effective tax rate.

The dividend has been increased by 19% to 40.5 cents per share and is evidence of the strong cash-generating ability of the company.

Group revenue increased by 10% whilst revenue from the rest of Africa increased by 71% with a full 6 months contribution from the beverage can operation in Angola. Trading profit from Africa increased by 60%.
Group 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 & Glass and softer performances from Tissue and Paper & Flexibles.

CEO Andrew Marshall said, “The results are further evidence that the strategy we embarked on a few years ago continues to bear fruit.

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.

The furnace rebuild at Glass was completed on time and within budget and with us now owning 100% of the glass business we expect a greater contribution from this business in the years ahead.

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. Our strategy of generating at least 25% of our revenue from the rest of Africa remains intact with a number of exciting opportunities in the pipeline.

In Europe the acquisition of Four Four Two last year 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.”
Looking ahead Andrew Marshall noted “The next six months should see steady growth in our South African 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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