JSE-listed packaging manufacturer Nampak expects its headline earnings per share (HEPS) to double after a stronger trading performance in the first half of the financial year.
The group reported a 22% increase in trading profit and 7% increase in operating profit, citing a “sustained focus on margin management, cost containment and efficiency improvements”.
On top of a stronger operational performance, Nampak benefited from the disposal of Bevcan Nigeria earlier this year. A $68.2m cash injection from the sale enabled the group to narrow its outstanding debt, lowering net finance costs and boosting earnings per share for the period under review.
Headline earnings also continued to be bolstered by a R65m pension fund surplus and a R100m interim settlement of an outstanding Covid-19 insurance claim, but to a lesser extent than in the first half of 2024, said the group.
As a result, HEPS for total operations for the six months ended March are expected to increase 98%-114% to between R64 and R69. Heps from continuing operations are expected to be 1%-8% higher at R54.50-R58.50.
The company said it continued to make good progress in paying off its debt, supported by the sale of Bevcan Nigeria, strong operating cash flow and lower interest costs but offset by a higher investment in net working capital.
The group’s share price has gained more than 150% over the past year as it implemented a series of turnaround initiatives, including numerous disposals to focus on the core metals market in SA, which the market has lauded.
Completing the disposal of Bevcan Nigeria and an exit from exposure to that country’s volatile currency is the latest move in its plans.
With Jacqueline Mackenzie
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.