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 (US$265m) of surplus cash from Zimbabwe, Nigeria, and Angola. Importantly, management appears to have the ability to repatriate 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 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 a 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."
On 16th May 2024, the company announced that it had sold its entire Nigerian operation for $68,5m. This resulted in the share giving a clear on-balance-volume (OBV) buy signal. A second OBV buy signal came on 20th June 2024 at R228 per share. Since then, it has moved up to R285.50. We believe that it will continue to perform.
Nampak has been able to remove R3,5bn (US$265m) of surplus cash from Zimbabwe, Nigeria, and Angola. Importantly, management appears to have the ability to repatriate 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 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 a 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."
On 16th May 2024, the company announced that it had sold its entire Nigerian operation for $68,5m. This resulted in the share giving a clear on-balance-volume (OBV) buy signal. A second OBV buy signal came on 20th June 2024 at R228 per share. Since then, it has moved up to R285.50. We believe that it will continue to perform.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.