Nampak under pressure despite sales increase

The South African group reported a 4% increase in sales to Rand8.87bn (£587m) in the six months to 31 March 2008, but trading income fell 17% to Rand762m.

Although European sales of paper-based packaging rose 5% to £115m and trading income increased by the same percentage to £3.9m, the group said lower volumes in South Africa and a failure to fully recover raw material price rises had hit results.

Nampak also paid Rand250m to settle a tax dispute in South Africa, and was forced to write off Rand25m in Nigeria following the discovery of irregularities.

Group pre-tax profit rose 4% to Rand719m and net finance costs were 24% higher at Rand114m due to higher interest rates and increased capital expenditure.

Sales in Nampak’s European plastics business rose 6% to £58m, while trading income was static at £5.7m.

The group’s share price dropped 2% yesterday (28 May) as pressure intensified to appoint new non-executive directors.

South African newspaper Business Day quoted Nampak chief executive John Bortolan as saying it would be “difficult” to recruit three new non-executive directors by the end of June.

A year ago, Nampak decided to retain its European packaging businesses after a lengthy strategic review.

Nampak produces medical packaging, cartons and plastics from 16 plants in the UK, as well as others on mainland Europe.

Popular Articles