Our opinion on the current state of NAMPAK(NPK)
Nampak (NPK) is Africa's largest packaging company with interests in South Africa and ten other African countries. About 60% of its turnover comes from South Africa, but only 36% of its trading profit. The rest of Africa accounts for 59% of trading profit and only 31% of turnover. The company also has small interests in the UK and Ireland. It produces four kinds of packaging products - plastics, metals, paper, and glass. The great preponderance of its trading profits come from metals - which consists mainly of beverage cans.
Nampak has been able to remove R3,5bn (US265m) of surplus cash from Zimbabwe, Nigeria, and Angola. Importantly, management appears to have the ability to re-patriate profits from the various African countries where it operates. It has halted its strategy of expanding into Africa after writing down its businesses in Angola and Nigeria by R3bn. COVID-19 and the fall in the oil price have impacted on its results in Nigeria and South Africa.
It is also benefiting from the news that it will not need to sell assets or do a rights issue to pay back debt of just under R6bn. The announcement that it would raise R1,35bn through a rights issue to reduce debt caused the share to fall 30%. The rights offer was reduced from R2bn to R1,5bn and shareholders finally gave permission to raise up to R1bn on 30th June 2023.
On 20th April 2023 the CEO, Eric Smuts, resigned with immediate effect and was replaced by Phil Roux. In its results for the six months to 31st March 2024 the company reported revenue up 7% and headline earnings per share (HEPS) of 5 393.9c per share compared to headline loss of 11 027.3c in the previous period. The company said, "Despite declines in revenue in DivFood and Bevcan Angola, Metals recorded a 6% increase in revenue boosted by growth achieved with Bevcan South Africa, while Plastics and Paper posted 9% and 10% increases in revenue respectively."
In an update on 1st October 2024 the company said, "In September 2024 the group successfully concluded the refinancing of the group, utilising a significantly simplified funding structure, inclusive of only a minor foreign debt component. The Standard Bank of South Africa financed the transaction in full."
On 16th May 2024 the company announced that it had sold its entire Nigerian operation for $68,5m. In a trading statement for the year to 30th September 2024 the company estimated that HEPS would be between 3100c and 3500c compared with 39004,6c in the previous period. This caused the share price to drop sharply.
The share remains in an upward trend, but it is a volatile commodity share.
Nampak has been able to remove R3,5bn (US265m) of surplus cash from Zimbabwe, Nigeria, and Angola. Importantly, management appears to have the ability to re-patriate profits from the various African countries where it operates. It has halted its strategy of expanding into Africa after writing down its businesses in Angola and Nigeria by R3bn. COVID-19 and the fall in the oil price have impacted on its results in Nigeria and South Africa.
It is also benefiting from the news that it will not need to sell assets or do a rights issue to pay back debt of just under R6bn. The announcement that it would raise R1,35bn through a rights issue to reduce debt caused the share to fall 30%. The rights offer was reduced from R2bn to R1,5bn and shareholders finally gave permission to raise up to R1bn on 30th June 2023.
On 20th April 2023 the CEO, Eric Smuts, resigned with immediate effect and was replaced by Phil Roux. In its results for the six months to 31st March 2024 the company reported revenue up 7% and headline earnings per share (HEPS) of 5 393.9c per share compared to headline loss of 11 027.3c in the previous period. The company said, "Despite declines in revenue in DivFood and Bevcan Angola, Metals recorded a 6% increase in revenue boosted by growth achieved with Bevcan South Africa, while Plastics and Paper posted 9% and 10% increases in revenue respectively."
In an update on 1st October 2024 the company said, "In September 2024 the group successfully concluded the refinancing of the group, utilising a significantly simplified funding structure, inclusive of only a minor foreign debt component. The Standard Bank of South Africa financed the transaction in full."
On 16th May 2024 the company announced that it had sold its entire Nigerian operation for $68,5m. In a trading statement for the year to 30th September 2024 the company estimated that HEPS would be between 3100c and 3500c compared with 39004,6c in the previous period. This caused the share price to drop sharply.
The share remains in an upward trend, but it is a volatile commodity share.
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