“The period under review coincides with the conclusion of eighteen months of the group’s two-year recovery time-frame objective. From a financial strength perspective the group is in a much stronger position than it was at the commencement of the plan,” the company said.
(READ MORE: Astrapak past phase one of turnaround strategy)
“The reported earnings do not, as yet, reflect the extent of the transformative initiatives undertaken. However, these measures have given the group the platform to execute on its recovery plan without increasing the gearing levels within the group or having to seek further funding.”
[DATA APK:Astrapak], a manufacturer and distributor of rigid and flexible plastic packaging products, also saw a slight growth in revenue of 3.5 per cent.
Its revenue increased to 1.14 billion rand for the six months ending 31 August 2014 from 1.10 billion rand for the same period in 2013.
“The major qualitative improvements that have been under way throughout the group have been costly but have not come at the expense of the balance sheet, which remains sound, and are part of a deliberate change management strategy,” said Astrapak.
“If we do not deliver superior quality products on time and at the right price to customers according to international, not local, benchmarks, we do not have a sustainable business model.”
The company reported a loss from operations of 12.6 million rand in the 2014 period from a profit of 29.5 million rand in 2013 and a loss before taxation of 27.9 million rand from a profit of 15.9 million rand.
It also saw a headline loss attributable to ordinary shareholders of 40 million rand in 2014 from a loss of 1.8 million rand in 2013.
(READ MORE: Strike expected to impact Astrapak’s HEPS)
“The financial results continue to reflect the costs and impact of business reengineering, together with the substantial irrecoverable loss from strike action. Markets served remain soft and not helpful to operational performance,” Astrapak said.
“The second six months of the financial year ended 28 February 2015 marks the final phase of the turnaround. We have some more tidying up to do, and with that is certain to come further costs. The group is on track to meet its medium-term return aspirations.”