Nampak’s share price increased 19.3% by midday yesterday on the JSE after the packaging group, which is undergoing massive restructuring due to financial difficulties, said it would likely report a turnaround to a profit on a per share basis for the six months to March 31.
“The most salient first half performance drivers includes a step change in performance of the continuing operations, an effective cost reduction programme, lower foreign exchange losses, improved working capital, progress on asset disposals and lower impairments,” the group said in a trading statement yesterday.
As an indication of how favourably investors have viewed Nampak’s restructuring so far, the share price was trading at R220.50 cents yesterday afternoon, while a year ago it was trading at only 76 cents.
During the first half, various group assets were classified as held-for-sale and discontinued operations, as part of the asset disposal programme that started in August 2023.
The group said yesterday that it expected to report headline earnings per share of continuing operations of between 4 700 cents and 5 500 cents for the six months, compared with a headline loss per share of 11 027.3 cents at the half year stage in the 2023 year.
Earnings per share of continuing operations was expected to be between 4 600 cents and 5 400 cents, compared with a loss per share of 31 043.7 cents at the half year stage in 2023.
Measured in terms of total operations, headline earnings per share was expected to be between 3 000 cents and 3 400 cents, compared to a headline loss per share of 11 524.1 cents at the same time last year.
The loss per share of total operations of between 1050 cents and 1 250 cents represented a 99% increase from the 83 882.1 cents loss per share reported at the same time last year.
A rights offer and share consolidation through the period meant that the average number of shares in issue would be re-presented from 627 822 506 to 2 968 572.
In December, in line with terms of a new funding package, Nampak said it was required to raise R2.7bn through asset disposals in the next 18 months to repay interest-bearing debt. Nampak had gotten into financial difficulties after building a R5.2bn debt pile through an unsuccessful expansion into the rest of Africa a few years ago.
In September, the group raised R1bn from its shareholders after a rights offer was oversubscribed.
BUSINESS REPORT