Nampak shares surge nearly 4% as earnings forecast to more than double

Nampak's share price surged 3.9% on the JSE on Thursday after it forecasted a more than 100% increase in headline earnings per share (HEPS) of continuing operations that entrenches its turnaround process.

The group, Africa's largest diversified packaging manufacturer, said in a trading statement HEPS of continuing operations are expected to be between 10 100 cents and 10 700 cents for the year to September 30, 2024, compared to HEPS of 3 361.1 cents in the 2023 financial year.

The group that produces packaging for the beverage, food, and consumer goods industries and which over the past two years has undergone significant restructuring to bring down high debt, said that in the 2024 comparative financial year, various assets were held for sale in line with an asset disposal process.  The company had returned to profitability by March, this year.

Earnings per share (EPS) of continuing operations for the full year were expected to be between 13 200 cents and 14 500 cents, compared to 7 554 cents in 2023, representing an increase of between 75% and 92%.

Significant once-off post-tax items affecting HEPS and EPS included a significant interest cost reduction of R369 million, a pension fund surplus of R47m and a net R195m settlement of an outstanding Covid-19 insurance claim that was recognised.

Meanwhile, the prior year had benefitted from a post-retirement medical aid gain of R212m, offset by other non-recurring costs of R372m.

HEPS for the group was expected to be between 11 950 cents and 12 200 cents compared to 1 378 cents in the 2023 financial year, an increase of more than 100%. EPS for the group was expected to be between 41 150 cents and 42 000 cents compared to a loss per share of 4 500 cents in 2023.

EPS was mostly increased by the recycling of a net foreign currency translation reserve of R2.2 billion.

In September, the board announced the appointment of Riaan Heyl as CEO with effect from February 1, 2026.The board described Heyl as a "seasoned FMCG (fast moving consumer goods) executive and a chartered accountant by qualification, with more than 20 years' experience. He has held senior positions across the industry and most recently CEO of Pepsico SA which acquired Pioneer Foods in 2020. He furthermore had worked alongside Phil Roux during Phil's 5-year tenure as CEO at Pioneer Foods.

Nampak Southern Africa Holdings earlier this year planned to sell its 51.43% shareholding in Nampak Zimbabwe to TSL Limited, but, notwithstanding a successful due diligence and competition authority approval process, TSL withdrew from the transaction.

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