Listed South African glass company Consol on Monday reported a 4,6% increase in headline earnings per share to 109,7 cents for the financial year ended June 2005, from 104,9 cents. A final dividend of 39 cents per share was declared.
Revenue increased by 6,1% to R2,2-billion, while gross profit rose to R830,7-million from R774,2-million. Operating profit increased by 6,3% to R509,2-million and the operating profit margin — at 22,7% — was in line with that of the prior year, 22,6%.
Consol MD Mike Arnold said the results were “pleasing”, following from a positive consumer market and a strong operational performance.
Revenue from the glass division grew by 5,9% to R1,98-billion from R1,869-billion, while the plastics division contributed R265,5-million in revenues, 7,2% higher than last year’s.
During the period, Consol adopted the International Financial Reporting Standards (IFRS). Among other changes as a result of the introduction of the IFRS, Consol has depreciated idle assets.
Consol said to complement organic growth in existing markets, it aims to pursue new business in a number of high-growth consumer-packaging and related industries.
The opportunities identified include African markets, speciality plastic and glass packaging, and glass tableware.
In March, Consol installed a further 15 000 tonnes of capacity at Bellville with the rebuild of the number-three furnace, and in September last year, 10 000 tonnes of capacity was added to the number-four furnace at the CSG plant in Pretoria. This brings total glass capacity to 620 000 tonnes a year.
Additional glass capacity totalling 150 000 tonnes is planned to be commissioned over the next 18 months in the north and south to meet future demand. This will be funded from the group’s strong cash-generation ability.
Looking ahead, Consol expects consumer demand to remain buoyant, in line with gross domestic product growth. The company’s key markets are anticipated to generate commensurate growth.
“Consumer demand is forecast to remain buoyant, and consequently the food and beverage industries, our key markets, are expected to generate commensurate growth.
“To meet future demand, additional glass capacity of 25% has been planned to be commissioned over the next 18 months. Within the current economic environment, the group is expected to achieve real earnings growth for the next year,” Arnold added. — I-Net Bridge