Nampak CEO Riaan Heyl was handed a solid hand of cards in the mid-cap JSE packaging firm when he took over the executive role from legendary corporate fixer Phil Roux in February.
The two executives have known each other since Roux was CEO of Pioneer Foods and Heyl ran the Essential Foods division. Heyl later became CEO of PepsiCo South Africa after Pioneer was taken over by PepsiCo. He had strong credentials in the fast-moving consumer goods (FMCG) sector when he was anointed the new Nampak CEO.
For those who need reminding, Roux had led the aggressive restructuring and streamlining of Nampak when he took the CEO role in early 2023, having been brought in by activist A2 Investment Partners supported by a cabal of disgruntled institutional shareholders who ousted previous Nampak executives.
Back in late 2022 and into 2023, Nampak, once a packaging powerhouse, was reduced to penury, saddled with R6bn of debt and with an interim loss in 2023 of a whopping R2.4bn. Its market cap dribbled down to R600m at one point — at the time less than small-cap packaging group Bowler Metcalf. The mighty had certainly fallen.
Within this carnage activists saw a gem that just needed a recut and repolish to restructure and rightsize it; its investor value had been shredded by aggressive African expansion and derisory returns on capital. Roux quickly administered the return to a profitable core at Nampak, driven by the central beverages division (Bevcan), the fixing up of DivFood and the sale of noncore assets.
Over the past three years Nampak has risen like a phoenix from the corporate ashes. A R1bn rights issue in September 2023 at R175 was quickly followed by operational streamlining and a reviewed strategy focusing on Bevcan. There were material asset sales in liquid cartons and in Nigeria and other African territories that reduced debt and focused returns. In the past three years the Nampak share price rose 150% to the current R475 as earnings rebounded.
Off its highs of November 2025 of R570, the counter is down 12% year-to-date despite the current earnings multiple still on a modest 4.5, with decent growth prospects ahead.
The FM engaged with Heyl after the recent announcement of interim results to March at which Nampak reported revenue of R5,6bn (-1%), operating profit of R89m (-6%) and normalised headline earnings of R41.32 a share (+8%). Noteworthy, also, was the 33% reduction in finance costs to R189m.
Bevcan in Angola and South Africa drove the story again. The ongoing problem child, Nampak’s specialised and custom-shaped tinplate and aluminium products, saw a 3% dip in revenue to R1.36bn, but profitability skittered down 44% to R131m. Bevcan, on the other hand, posted a 9% rise in profits to R720m — registering strong growth in Angola.
Heyl says there has been strong consumer demand for beverages in larger can formats, with volumes in the 500ml can market growing strongly. He says energy drinks, new beverage formats and growth in ready-to-drink categories — coupled with a move away from glass beer bottles towards cans — have spurred market growth.
Nampak plays in this market, but Heyl notes that it simply did not have enough installed capacity in South Africa to meet customer demand. This Achilles heel, alongside weaker orders from the canned fish sector due to structural issues within fishing, one of Nampak’s larger accounts, weighed on the performance.
Activists saw a gem that just needed a recut and repolish to restructure and rightsize it
A decision was made in 2025 to move and relocate an underutilised beverage line in Angola to Springs, near Joburg. Nampak began relocation at the end of 2025; 62 containers and 15 break-bulk shipments of equipment were disassembled and shipped. Heyl says the rebuild started in March this year.
This strategy adds more flexibility and volume to Nampak’s beverages and canning lines. The company stresses that the R400m cost of the move and rebuild is a third of what a new line would have cost. Nampak now needs to secure volumes to bring in the key 500ml canning line.
Heyl says that from August production line 4 in Springs, which manufactures cans sized 200ml-300ml, will provide Nampak with more production flexibility, production agility and faster manufacture with lower costs. Line 1, the beverage line, should be producing on or before the end of the year, enabling Nampak to meet customer demands in this fast-growing beverage segment.
With Roux having restructured Nampak and saved the stock from the scrap heap, the balance sheet and operations have materially improved. Heyl’s intent is to drive efficiency and lower costs and push higher returns alongside refining the portfolio.
One outstanding issue is the sale of Nampak’s 51.43% stake in its Zimbabwean subsidiary. A $25m deal to exit that stake fell apart in September 2025 as the buyer failed to meet suspensive conditions. The unit recorded a 10% rise in revenue in the first half of 2026 to $41.7m. But higher raw material and consumable costs, which rose 24.1% to more than $25m, combined with aggressive pricing competition across the group’s business segments, eroded margins, and profits dived 90% to just $300,000.
The delayed sale of the Zimbabwean asset miffed investors, who had hoped the deal would close the asset sale chapter with funds being used to further repay debt. Heyl tells the FM the Zimbabwean operation, which was impaired by R319m to reflect its worth better, should be sold by the year-end results announcement, with funds flowing into Nampak’s new financial year.
With net debt at R2,2bn, down 30% like-on-like, and improving business prospects, Heyl says the board had considered an interim dividend — reflecting a degree of internal confidence. However, debt reduction and the continuation of the capex strategy won the day. But Heyl says paying a dividend, or even share buybacks, is on the cards for year-end results.
It is interesting that after the results announcement Heyl acquired R1m worth of shares in the open market at R481.33. He says it took him two days to acquire the shares, which is an indication of the tightness of the group’s share liquidity.
The Nampak share price has been trending sideways since April due to some valid concerns.
The aluminum price has risen 20% since the Middle East conflict began and this cost will ultimately be borne by consumers; a 500ml can will cost up to 50c more. Heyl says sector demand remains robust and all FMCG businesses will be in the same boat regarding costs until the Middle East conflict is resolved.
With a headline earnings base of R110.05 a share for financial 2025, the release of the year-to-September 2026 trading update should likely be the pivot for the stock. The market awaits the Zimbabwe sale news but is also looking forward keenly to the commissioning of two new lines at Bevcan. Any announcement of a dividend boosts sentiment further.
The FM envisages a solid start to Nampak’s second half to end-September and into the 2027 financial year, with several business touchpoints kicking into renewed growth and business expansion.
At current prices, Nampak remains a canny ongoing recovery play.
*The writer holds shares in Nampak
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