Our opinion on the current state of TPC

Transpaco (TPC) is a small manufacturer of paper and plastic packaging. It is also involved in re-cycling. In its results for the year to 30th June 2023 the company reported revenue up 10,8% and headline earnings per share (HEPS) up 19,4%. The company's net asset value (NAV) increased by 12,6% to 2958c per share. The company said, "Notwithstanding a flat economy, reduced consumer spend and the negative impact of excessive load shedding, Transpaco's results for the 12 months ended 30 June 2023 ("the year") reflect operating profit up 13,3% to R252,5 million (June 2022: R222,8 million) with an operating margin increase to 9,7% (June 2022: 9,6%)". A problem with this share is that it has been relatively thinly traded but volumes are picking up. The share is selling for around R33.76 and volumes traded have increased significantly to an average of about R68 000 per trading day. The company faces a general resistance and move away from single-use plastics and is developing alternatives. In our view, as the company continues to improve the tradability of its shares it becomes more attractive.