Cape Town - Specialist packaging group Transpaco [JSE:TPC] is hoping for attractive returns from Disaki Cores and Tubes, the business it recently purchased from Nampak [JSE:NPK] for R30m.
Transpaco has already enjoyed some success with spinning around underperforming businesses acquired from Nampak.
The company purchased the retail plastic bag business of the flexibles Bellville business of Nampak Products in 2006, and has since bedded it down successfully.
Transpaco CEO Phil Abelheim told Fin24.com on Monday that there was no reason to believe the company should not replicate its successes with Nampak's plastic bags business at Disaki.
He said Transpaco – which is considerably smaller than packaging conglomerate Nampak - would focus on running a much leaner operation at Disaki.
"It took around 18 months to get the plastics bag business correctly positioned. We don't think it will take as long with the Disaki business."
Abelheim disclosed that Disaki would further diversify Transpaco's market and revenue streams, adding about R200m to the turnover line.
Disaki (formerly Kohler Cores & Tubes) specialises in manufacturing cardboard tubes and cores. The acquisition – which includes Cleveland Pakaging and Global Packaging - expands Transpaco's product range, adding angle board, carton dividers, cones and void fillers.
Abelheim said Transpaco was now poised to benefit from growing demand in the tubes and cores sector as well as increasing its market share in the Western Cape and KwaZulu-Natal.
Abelheim was confident the operating margins at Disaki could be tweaked to the same levels as Transpaco's other businesses.
On Monday Transpaco shrugged off tight trading conditions in the packaging sector to post a 16% jump in earnings to 194 cents per share in the year to end-June 2010.
Operating margins came in at a solid 10.6%.
With R99m in cash flow generated from operations, Transpaco declared a final dividend of 38c/share, hiking the full-year payout by over 30% to 63c/share.
- Fin24.com
Transpaco has already enjoyed some success with spinning around underperforming businesses acquired from Nampak.
The company purchased the retail plastic bag business of the flexibles Bellville business of Nampak Products in 2006, and has since bedded it down successfully.
Transpaco CEO Phil Abelheim told Fin24.com on Monday that there was no reason to believe the company should not replicate its successes with Nampak's plastic bags business at Disaki.
He said Transpaco – which is considerably smaller than packaging conglomerate Nampak - would focus on running a much leaner operation at Disaki.
"It took around 18 months to get the plastics bag business correctly positioned. We don't think it will take as long with the Disaki business."
Abelheim disclosed that Disaki would further diversify Transpaco's market and revenue streams, adding about R200m to the turnover line.
Disaki (formerly Kohler Cores & Tubes) specialises in manufacturing cardboard tubes and cores. The acquisition – which includes Cleveland Pakaging and Global Packaging - expands Transpaco's product range, adding angle board, carton dividers, cones and void fillers.
Abelheim said Transpaco was now poised to benefit from growing demand in the tubes and cores sector as well as increasing its market share in the Western Cape and KwaZulu-Natal.
Abelheim was confident the operating margins at Disaki could be tweaked to the same levels as Transpaco's other businesses.
On Monday Transpaco shrugged off tight trading conditions in the packaging sector to post a 16% jump in earnings to 194 cents per share in the year to end-June 2010.
Operating margins came in at a solid 10.6%.
With R99m in cash flow generated from operations, Transpaco declared a final dividend of 38c/share, hiking the full-year payout by over 30% to 63c/share.
- Fin24.com