With an aggressive turnaround nearing completion, packaging group Astrapak has narrowed its losses during the financial year ended February 29, after initially feeling the pain of restructuring the business.

The group posted a headline loss a share of 14.1c for the 12 months under review, compared with a headline loss a share of 71.5c in the prior year, while the loss a share decreased from 114.4c in 2015 to 2.7c in 2016.

The headline loss attributable to ordinary shareholders of R17.1-million in 2016 decreased substantially on the R86.5-million loss in the prior year, said Astrapak CFO and MD Manley Diedloff at a presentation of the company’s finacial results, in Sandton, on Wednesday.

During the 2016 financial year, Astrapak reduced its attributable losses to R3.9-million from a loss of R143.3-million in the year ended February 2015.

Profit from operations of R44.3-million for the 2016 financial year was nearly double the R24.9-million reported in the prior year, while gross profit increased by 3.2% to R301.5-million and gross profit percentage improved from 21% to 22.4% during the financial year under review.

Earnings before interest, taxes, depreciation and amortisation increased to R116.1-million on a like-for-like basis and was higher in the second half of the year than in the first six months.

Revenue was down 2.9% year-on-year to R1.3-billion; however, Diedloff pointed out that the prior year’s revenue had included R102.5-million from the disposed Hilfort operation, which meant that, on a like-for-like basis, revenue increased by 4.8% year-on-year.

Meanwhile, the company had “charted a new course” with the completion of a significant but costly footprint reorganisation, the exit of identified businesses and noncore assets, the elimination of costs and inefficiencies in continuing operations and a refocus as a moulding and forming technologies-based packaging manufacturer after the disposal of the polyethylene terephthalate and flexible divisions.

“The costly reorganisation is substantially complete and [Astrapak] is now focused on ensuring that the transformed business delivers operational performance and healthy cash flow,” said CEO Robin Moore.

In 2016, the group had continued with the rationalisation and consolidation of its factories, including the relocation of its capital assets from Bronkhorstspruit to its KwaZulu-Natal operations and the transfer and imminent closure of the Johannesburg head office.

“Our operational structures have been significantly overhauled; we have made good progress on exiting from discontinued businesses and surplus assets, and have reinvested notably into servicing major customers, particularly those in our personal care lines,” Moore added.

“This is evidenced by far fewer one-off items in this year’s financial results, as discontinued operations and closure costs are almost out of the system. With a streamlined business, fewer but larger customers, and with major investments in place, we are now set to drive performance towards targeted returns.”

Astrapak had increased the cash generated from operations from R37.1-million in 2015 to R113.2-million and net cash flow from operating activities, after interest, taxes and preference dividends was R55.7-million.

No dividend was declared as Astrapak aimed to reinvest operational cash flows into the ongoing execution of the turnaround strategy and the reduction of debt.

“We are aspirant in recommencing dividend distributions to shareholders and will do this when our reworked businesses are on track and delivering healthy cash flows, balanced against our requirements for maintenance and growth,” Moore assured.