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Condensed Consolidated Financial Statements for the Financial Period ended 28 February 2017
MASTER PLASTICS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2016/323930/06)
Share code: MAP ISIN: ZAE000242921
("Master Plastics" or "the Company")
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the financial period ended 28 February 2017
KEY HIGHLIGHTS
- Unbundling and Listing effected 24 May 2017
- Profit Estimate and Aggregate Profit Estimate as per Pre-Listing Statement achieved
COMMENTARY
INTRODUCTION
The Master Plastics Group ("the Group") was unbundled from the Astrapak Limited Group on 24 May 2017.
In order to give effect to this and prior to the implementation of the unbundling, Master Plastics was
incorporated and a number of companies and/or assets were disposed of to the Company through a series
of "asset-for-share-transactions" at the end of January 2017 and February 2017, which resulted in the
establishment of the Group. The Group includes the manufacturing businesses of Barrier Film Converters,
(Pty) Ltd ("Barrier Film Converters") Peninsula Packaging and Plusnet-Geotex.
FINANCIAL RESULTS
In terms of International Financial Reporting Standards ("IFRS"), the Group will herewith only report the
trading results of the respective entities for the periods that they were part of the Group and accordingly will
only recognise the trading results of Barrier Film Converters, Micawber 430 (Pty) Ltd and Micawber 451 (Pty) Ltd
for one month, while the trading results of Peninsula Packaging and Plusnet-Geotex, both material components of
the Company and the Group as acquired on 28 February 2017, will not be recognised in the trading results reported.
All entities will,however, be accounted for in the Statement of Financial Position as at 28 February 2017. As the
Group was only established in the 2017 financial year, no comparatives will be presented in accordance with IFRS.
The Group will, as a result of the above, report a basic loss and headline loss of R0,6 million or 13,9 cents
per share given a weighted average number of shares of 4 186 939 (compared to an issued share capital of
135 131 250) for the reporting period. These amounts are not representative of the actual performance of the
Group's underlying businesses over the financial year and shareholders should look to the aggregated
profit estimate in the Pre-listing Statement dated 5 May 2017 issued to shareholders ("the Prelisting
Statement"), and the below earnings metrics for an accurate reflection of the actual financial performance of
the businesses over the 12-month period ended 28 February 2017, which is representative of trading results which
the Group would expect to report when it will be able to consolidate operational results for the full period being
reported on.
In the annexures to the Pre-listing Statement, combined historical financial information, pro forma financial
information, a profit estimate to 28 February 2017, an aggregated profit estimate to 28 February 2017 and a
profit forecast to 28 February 2018 were presented and the basis of preparation and assumptions applicable to
each of these were detailed.
We advise that both the profit estimate and aggregated profit estimate, as presented in Annexure 5 of the
Pre-listing Statement, were achieved by the Group for the financial period ended 28 February 2017 when applying
the same basis of preparation and assumptions as detailed in the relevant annexures. An aggregated earnings
per share ("EPS") of 36.0 cents and an aggregated headline earnings per share ("HEPS") of 25.6 cents (compared
to the aggregated EPS and HEPS of 36.0 cents and 24.0 cents respectively per the aggregated profit estimate set
out in Annexure 5 of the Pre-listing Statement) would accordingly have been reported for the financial year
ended 28 February 2017 had the results of all the operations within the Group been accounted for during the
full 12-month period being reported on.
PROSPECTS
The Group will continue to focus on the execution of its stated business strategy and invest in opportunities to
enhance efficiency and in support of organic growth being experienced by the existing customer base.
Trading conditions remain challenging in an economy with a rather depressed outlook, but the Group is
confident that the exposure to more defensive market segments and a continued focus on operational performance
will support and underwrite its strategic efforts.
BROAD-BASED BLACK ECONOMIC EMPOWERMENT
The Group is committed to transformation and achieved a Level 4 (Empowered Supplier) accreditation at its
first rating in accordance with the Codes of Good Practice issued in terms of section 91(1) of the Broad-Based
Black Economic Empowerment Act 53 of 2003 (gazetted 11 October 2013).
CHANGES TO THE BOARD OF DIRECTORS
Appointments:
Mr M Diedloff was appointed as Executive Director & Chief Executive Officer on 28 November 2016.
The following directors were appointed to the Board of Directors of the Company ("the Board") on 13 April 2017:
Ms P Langeni as Independent Non-Executive Chairperson;
Ms S Ratlhagane as Executive Director and Chief Financial Officer;
Mr T Mokgatlha as Independent Non-Executive Director;
Mr G Steffens as Independent Non-Executive Director;
Mr C McDougall as Independent Non-Executive Director; and
Mr P Botha as Non-Executive Director.
SUBSEQUENT EVENTS AND DIVIDEND DECLARATIONS
Events that occurred post the financial year end are detailed in note 13 to the Condensed Consolidated
Financial Statements. This includes details of the dividend declaration by Master Plastics to Astrapak Limited,
its sole shareholder at the date of the dividend declaration.
APPROVAL AND PREPARATION
The Condensed Financial Statements presented herein have been prepared under the direction and supervision
of the Chief Financial Officer, Salome Ratlhagane CA(SA).
DOCUMENTS
The Pre-listing Statement and this announcement is available via Master Plastics' website:
www.masterplasticsgroup.com or from the registered office of the Company, or its Corporate and Designated
Adviser Merchantec Proprietary Limited, Monday to Friday 08h30 to 16h30.
ACKNOWLEDGEMENT AND APPRECIATION
The Board of Directors would like to express its appreciation to all stakeholders for their commitment,
efforts and support during the various processes relating to the Group.
On behalf of the Board
Manley Diedloff Salome Ratlhagane Rivonia
Chief Executive Officer Chief Financial Officer 26 May 2017
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial period ended 28 February 2017
Reviewed
financial
period ended
28 February
2017
Notes (R'000)
Revenue 11 9 347
Cost of sales (7 382)
Gross profit 1 965
Administrative and other expenses (2 453)
Distribution and selling costs (421)
Loss from operations (909)
Investment income 103
Finance cost (2)
Loss before taxation (808)
Taxation expense 226
Loss for the period (582)
Other comprehensive loss -
Total comprehensive loss for the period (582)
Loss per ordinary share (cents) 12 (13,9)
HEADLINE LOSS PER ORDINARY SHARE
Headline loss per ordinary share (cents) 12 (13,9)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the financial period ended 28 February 2017
Reviewed
financial
period ended
28 February
2017
Notes (R'000)
Assets
Non-current assets 154 407
Property, plant and equipment 7 145 759
Deferred taxation assets 8 648
Current assets 211 656
Inventories 46 260
Accounts receivable 71 214
Cash and cash equivalents 13 94 182
Assets classified as held-for-sale 7 214
Total assets 366 277
Equity and liabilities
Total equity 227 238
Equity attributable to ordinary
shareholders of the parent 227 238
Non-current liabilities 43 759
Long-term interest-bearing debt 8 5 974
Long-term financial liability 9 15 528
Deferred taxation liabilities 22 257
Current liabilities 95 280
Trade and other payables 13 87 393
Short-term interest-bearing debt 8 6 843
Taxation payable 1 044
Total equity and liabilities 366 277
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the financial period ended 28 February 2017
Reviewed
financial
period ended
28 February
2017
Notes (R'000)
Cash utilised operations before working capital changes (664)
Decrease in working capital 2 830
Net interest and taxation paid (663)
Net cash inflow from operating activities 1 503
Capital expenditure 7 (1 118)
Acquisition of businesses - cash balances acquired 6 93 797
Net cash inflow from investing activities 92 679
Net increase in cash and cash equivalents 94 182
Net cash and cash equivalents at beginning of the period -
Net cash and cash equivalents at end of the period 94 182
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the financial period ended 28 February 2017
Reviewed
financial
period ended
28 February
2017
(R'000) Notes (R'000)
Opening balance -
Movements:
Ordinary share capital issued 6 235 404
Common control reserve on acquisition of equity
interests in subsidiaries 10 (7 584)
Loss for the period (582)
Closing balance 227 238
Comprising:
Ordinary share capital 235 404
Retained loss (582)
Common control reserve on acquisition of
equity interests in subsidiaries (7 584)
Total equity 227 238
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the financial period ended 28 February 2017
1. STATEMENT OF COMPLIANCE
The provisional condensed consolidated financial statements for the period ended 28 February 2017
have been prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, and to also, as a minimum, contain the
information required by IAS 34: Interim Financial Reporting, the Listings Requirements of the
JSE Limited and the requirements of the Companies Act, 2008 (Act 71 of 2008), as amended (" the
Companies Act"). The provisional report has been prepared using accounting policies that comply with
IFRS which are consistent in all material respects with those of Astrapak Limited applied in the
financial statements for the year ended 28 February 2017. The provisional condensed consolidated
financial statements have been prepared internally under the supervision of the Chief Financial Officer,
Salome Ratlhagane, CA(SA).
2. REVIEW CONCLUSION
The provisional condensed consolidated financial statements for the period ended 28 February 2017 have been
independently reviewed by the Group's auditor, Deloitte & Touche. The review was conducted in accordance with
ISRE 2410 "Review of Interim Financial Information performed by the Independent Auditor of the Entity".
A copy of their unmodified review conclusion is available for inspection at the Company's registered office.
Any reference to future financial performance included in this announcement has not been reviewed or reported
on by the Company's auditors. The auditor's report does not necessarily report on all of the information
contained in this announcement/provisional report. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of that
report together with the accompanying financial information from the registered office of the Company.
The directors take full responsibility for the preparation of the provisional report.
3. ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the provisional condensed consolidated financial
statements are consistent with IFRS.
4. COMPARATIVE FIGURES
As Master Plastics was only established during the financial period ended 28 February 2017, no comparative
figures are presented.
5. SEGMENTAL ANALYSIS
As the financial information reported on relate to only 1 (one) month's trading and is mainly attributable
to the business of Barrier Film Converters and due to the timing of the transactions in terms of which Master
Plastics acquired the underlying operations a segmentation of the financial information reported would not
be meaningful.
6. ESTABLISHMENT OF THE MASTER PLASTICS GROUP
In line with Astrapak Limited's resolved strategy aimed at becoming a focused rigid packaging business and
pursuant to an offer from RPC Plc, the Board of Directors of Astrapak resolved to unbundle Master Plastics
to its ordinary shareholders by way of a distribution in specie in terms of section 46(1)(a)(ii) of the
Companies Act and section 46 of the Income Tax Act. In order to give effect to this and prior to the
implementation of the unbundling, Master Plastics was incorporated and a number of companies and/or assets
were disposed of to Master Plastics through a series of "asset-for-share-transactions" at the end of
January 2017 and February 2017, which resulted in the establishment of the Master Plastics Group.
The Master Plastics Group has accordingly only been trading for a period of 1 month during the period
being reported upon.
The "asset-for-share-transactions" and a breakdown of the assets and liabilities so acquired by
Master Plastics is presented below. All assets and liabilities were acquired at fair value.
Rand value No of
of shares no par
issued value shares
(R'000) issued
Shares and share claims acquired 31 January 2017
(100% voting interest):
- Barrier Film Converters (Pty) Limited 79 650 36 446
- Micabwer 430 (Pty) Limited 6 912 8 954
- Micawber 451 (Pty) Limited 6 511 6 746
Businesses acquired as at 28 February 2017:
- Peninsula Packaging 75 279 22 277
- Plusnet Geotex 25 431 22 277
- Property letting enterprises 24 806 16 154
- Astrapak Investments 16 815 22 277
235 404 135 131
The following assets and liabilities were acquired by Master Plastics Group as a result
of the aforementioned transactions:
(R'000)
Properties 22 238
Plant and equipment 122 862
Deferred tax assets 7 938
Inventory 46 133
Trade and other debtors* 73 851
Cash and cash equivalents 93 797
Long-term interest-bearing debt (refer note 8) (5 974)
Long-term financial liabilities (refer note 9) (15 528)
Deferred tax liabilities (23 581)
Trade and other creditors* (87 073)
Short-term interest-bearing debt (refer note 8) (6 843)
Net asset value acquired 227 820
Common control reserve 7 584
Share issue 235 404
* These are measured at fair value and designated as level 1 in the fair value hierarchy
7. PROPERTY PLANT AND EQUIPMENT
Reviewed
financial
period ended
28 February
2017
(R'000)
Opening net carrying value -
Additions - restructuring per note 6 145 100
Additions - post-restructuring 1 118
Depreciation (245)
Assets classified as held for sale - excess production equipment (214)
Closing net carrying value 145 759
Capital expenditure for the period (excluding
acquired through restructure) 1 118
Capital commitments
- contracted not spent 5 520
- authorised not contracted -
8. LONG-TERM AND SHORT-TERM INTEREST BEARING DEBT
Long-term and short-term interest bearing debt represent asset based finance liabilities which are measured
at amortised cost using the effective interest rate method. These are designated as level 1 in the fair
value hierarchy.
9. LONG-TERM FINANCIAL LIABILITY
The long-term financial liability of R15.528 million represents the final estimated payment due to the vendor
of Coralline Investments (Pty) Limited at the end of the financial year ending 28 February 2019. This amount
is estimated based on the valuation formula agreed between the parties as part of the transaction in terms
of which the minority interest in Coralline Investments (Pty) Limited was acquired by Astrapak Investments
prior to the disposal of the business to Master Plastics as part of the restructure detailed in 6 above.
10. COMMON CONTROL RESERVE
The common control reserve arose on the acquisition of equity interest by Master Plastics in Barrier Film
Converters (Pty) Limited, Micawber 430 (Pty) Limited and Micawber 451 (Pty) Limited in terms of the
restructure detailed in note 6 above and represents the differential between the net asset value acquired
and the value of shares issued for such net asset value by Master Plastics.
11. REVENUE
Reviewed
financial
period ended
28 February
2017
R'000
Revenue for the Group 9 347
Transactions with other entities in the Group -
Revenue for external customers 9 347
12. LOSS PER ORDINARY SHARE AND HEADLINE LOSS PER ORDINARY SHARE
Loss per ordinary share is calculated by dividing the reported loss for the period by the weighted average
number of shares in issue over the period that the attributable loss was generated.
Headline loss per ordinary share is calculated by dividing the headline loss attributable to ordinary
shareholders of the parent by the weighted average number of shares in issue over the period that the
headline loss were generated.
As there were no headline adjustable items for the period the loss per ordinary share and headline loss
per ordinary share is the same.
13. SUBSEQUENT EVENTS
The following subsequent events have occurred between 28 February 2017 and the date of this report:
All resolutions relating to the ordinary and preference share schemes proposed by Astrapak Limited pursuant
to the offer from RPC plc were duly passed on 12 May 2017 and accordingly the listing and unbundling of Master
Plastics became unconditional and effected on 24 May 2017.
The amount due to the vendor of Coralline investments (Pty) Limited was settled in full on 17 May 2017.
The amount of R6.43 million, which included interest of R0,21 million, was settled out of cash resources and
in accordance with the relevant sale agreement. The amount due was reflected as part of trade and other
payables in the Statement of Financial Position on 28 February 2017.
Master Plastics declared and paid a dividend of R75 million to Astrapak Limited on Monday, 22 May 2017
from its cash resources. The relevant resolutions, including those in relation to section 46 (solvency and
liquidity) and section 75 (financial interests) of the Companies Act, where applicable, were duly passed.
The dividend will not impact on the ability of Master Plastics to deliver on the profit forecast provided
in the Pre-listing Statement.
SUPPLEMENTARY INFORMATION
for the financial period ended 28 February 2017
Financial
period ended
28 February
2017
Number of ordinary shares in issue
at 28 February 2017 ('000) 135 131
Weighted average number of ordinary shares in
issue during financial period ('000) 4 187
Fully diluted weighted average number of ordinary
shares in issue during financial period ('000) 4 187
Net asset value per share (cents) 168
Net tangible asset value per share (cents) 168
Net cash 81 365
Long-term interest-bearing debt 5 974
Short-term interest-bearing debt 6 843
Cash and cash equivalents (94 182)
Loss before interest, taxation, depreciation and
amortisation ("LBITDA") (664)
Loss from operations (909)
Depreciation 245
Date: 26/05/2017 05:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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