SOUTH AFRICA – Paper and plastic packaging group Transpaco has blamed a 5.4% decline in headline earnings per share (HEPS) on a tough economic environment, especially for its plastics division.
HEPS slid to 168.2c in the six months to End-December, the company said in its interim results for the period released on Tuesday.
Price deflation in the plastics division was the main contributor to a 3% decline in turnover to US$74.5 million.
An interim cash dividend of 45c to be paid out of income reserves on March 19 has been declared.
This is slightly lower than the 48c declaration in the prior comparable period.
Transpaco said a decrease in sales and continued margin pressure in its business was partially offset by stringent management of expenses, resulting in the operating margin remaining on par with the previous year.
The group is looking ahead, however, saying its pending acquisition of the Future Packaging Group announced in December was expected to be finalised in April or May.
The US$8.92 million transaction would boost the business offerings of Transpaco, which it previously described as “highly profitable and cash generative” with an “experienced and self-sufficient management team”.
Future Packaging supplies industrial and general packaging products through distribution centres in Johannesburg, Cape Town, Durban, Bloemfontein and Nelspruit.
Transpaco said it would continue to target organic growth while maintaining strict financial control and pursuing “appropriate” acquisitions.