Good morning and welcome. These are the results for KAP for the year ended June 30, 2022. Thank you for joining us. Our results were released on SENS this morning at 7:00 A.M., I think. Today we're gonna go through and just explain the salient features of the results. Just in terms of the agenda, our Chairperson, Pat Quarmby, will introduce. I will then go through the operational reviews, Frans through the financial analysis, and then I'll come back with strategy and outlook. Our normal format. Frans and I will remain afterwards for any questions.
Just in terms of the questions, there's a tab at the top left of your screens, so if you have any questions, I encourage you to hit on the tab, answer the questions during the presentation, so that we can just formulate those questions and try and address them in a sensible manner at the end. Once again, thanks for your time. Thanks for joining us, and with that, I hand over to Pat.
Thank you, Gary. Thanks again for everyone for joining us. To coin a phrase, we certainly live in interesting times. I mean, it's been an extraordinary year globally. We've seen significant commodity price fluctuations and volatility, supply chain disruptions, global political tensions, a war in Ukraine, a China situation that seems to be escalating and still the COVID hangover. Of course, in South Africa, it's also been an extraordinary year. We've had civil unrest, we've had the floods in KZN, we've had political tensions, high unemployment, we've had COVID hangover and a bit of a bearish market. It's not all gloom and doom. Maybe this unpredictability and uncertainty is the new normal. Technology has brought us closer to a world without borders, and so we're not immune to it, to these issues.
Our philosophy has always been to lead industry sectors. That means we have to be globally competitive, and these factors then have a huge bearing on our performance, both positive in certain circumstances, but mostly negative. We've always said that diversity is our strength and one of our greatest attributes. This, there's a strong connection between our group companies. We have a strong, relevant, disciplined, central team and philosophy which allows our people to focus entirely on their business. The KAP business model is resilient, our people are resilient, and our management team are resilient. I'm very proud of the people of KAP, and how you have performed in this incredibly difficult year, and thank you all for your contribution. Gary, I hand you over to you now. Thank you.
Thank you, Pat, for that introduction. If we then move on to the operating environment and our operational review, part of what Pat has said, it's been an extraordinary year. We've had continued political instability and uncertainty, which really has a bearing on policy making and execution. That obviously impacts on industry and on all businesses. We obviously had the terrible civil unrest in July, both in South Africa and actually Eswatini. We've had the global supply chain disruptions and commodity volatility which have been positive and negative for us. We've had inflationary pressures and within all of that, a slowing consumer environment. To kind of complete the year, two sets of floods in KwaZulu-Natal.
As I said, parts of these have been good and bad, and that's why I think the word extraordinary is probably the right word. As Pat mentioned, our diversified model has proven successful in this time, and especially with decentralized management structures, which really assist in making fast decisions and dealing with these issues productively and effectively. If we go through each one of the divisions, firstly, PG Bison, a really fantastic performance from this business. Revenue up 16% to ZAR 4.9 billion. Operating profit up 35% to over ZAR 800 million with an operating margin of 17%. Robust demand really supported by global supply chain disruptions and strong domestic demand both in terms of reselling as well as manufacture.
This resulted in us putting a sales allocation system in place, similar to last year, which was really to balance supply on an equitable basis. Just in terms of supporting local market, we actually reduced our value add ratio by two percentage points from 69% to 67%. We actually reduced intentionally our exports, and that was really to supply local demand from manufacturers to produce product locally.
Just in terms of our margins, we were able to get some selling price increases through, plus we had a 3% increase in our production volumes, and this was sufficient to offset fairly material cost inflation that started coming through the system. Just in terms of our biological assets, so those are our forests where we source, grow and source our own timber for use in our plants. There we had a decrease in the valuation of ZAR 77 million compared to a prior year decrease of ZAR 190 million, and that was largely due to cost inflation exceeding our selling price inflation together with higher value of timber harvested versus the growth that we had. We completed the expansion of our Mkhondo particle board line during the year.
Within the same month, that team actually ramped it up to full capacity, which I think is a phenomenal achievement under extremely challenging environments. Really exceptional performance there and really well done to that team. Lastly, we've been talking some time around the ZAR 1.9 billion MDF plant that we are building also in Mkhondo. That plant process was initiated and we're making really good progress. It's on track in terms of commissioning in July 2024. Overall, PG Bison really strong performance. Restonic had a really disappointing year. Really tough start to the year with civil unrest which caused significant damage to our customers' retail stores and distribution centers.
This created significant complication in terms of supplying product, kinda leading into our peak trading period. We saw demand in the second half, also a bit weaker than normal. During this time we really try to support the market with increased promotional activity, and increased distribution capability. Mattress volumes for the year were 6% down. Bear in mind that the prior year was actually a record for us. As we came out of COVID, we had very strong demand. We had a record year, and I think in the context of this year with the factors that I just described, to be only 6% down on prior, I think is actually a good achievement.
Market indications are that the market contracted more than that, which is indicative from our foam volumes being 17% down and our textile volumes being 12% down in markets where we supply other manufacturers. Significant cost inflation that was our second major issue. It came at short notice and on an ongoing basis, and that's obviously very difficult to pass on to the retail market. With that, revenue down 7% to ZAR 1.6 billion. Operating profit down 73% to ZAR 69 million. Margin obviously significantly impacted from our target of 14%-15% down to 4.3%. Obviously, with this, we did a lot of work internally.
We restructured our foam operations to streamline the product range, streamline the customer base, in the process now of streamlining distribution. We closed our Gqeberha plant, and deliveries are taking place from the eastern into the Eastern Cape from Cape Town and Durban now. Obviously, as we've spoken previously, we've separated out a focus on sleep and a focus on industrial products. That's really some of the internal work that we're doing around the hardships that we experienced during the year. If we then move on to Feltex, also tough year. Revenue down 11% to ZAR 1.8 billion. Operating profit down again 77% to ZAR 36 million. Operating margin down to 2% of our kinda target range of around 10%, 11%.
The big factors there was continued semiconductor shortages, which emanated out of COVID originally. Still a big overhang during this last year, together with supply chain disruptions, which affected components coming into the country and the build volumes. Obviously, the civil unrest, we've got quite a big footprint in KwaZulu-Natal, as well as some of our customers. Civil unrest and the severe flooding, although our assets weren't impacted, it obviously had an impact on our ability to sell into our normal markets. Overall, we saw a 13% decrease in new vehicle assembly volumes, and we saw a 23%-34% decline in the sales volumes of the targeted LCV and SUVs that we target for our aftermarket products. Those are predominantly the Ford Ranger, the Toyota Fortuner, and the Toyota Hilux.
Big decrease in volumes there due to dealer stock shortage primarily. Obviously, with that volatility, it was difficult for our OEM customers. We had a lot of uncertainty and volatility in our component call-offs, which obviously made it very difficult to schedule production, and to be able to operate our plants optimally and reduce our cost structure in line with the reduced revenue line. The collective impact of all of that was around ZAR 126 million for the year. One of the challenges that we faced internally, so this was an internal problem, was with the startup of a component for a new model introduction during the year. We generally pride ourselves on our ability to do these new model introductions seamlessly. This one was particularly problematic for us. We weren't unique.
Some of our overseas suppliers of the same product had very similar issues. That resulted in excessive rejects, unplanned overtime, air freighting components to keep our customers going, with a collective impact of around ZAR 42 million. Overall, a very disappointing performance under quite challenging conditions. If we then move on to Safripol. Within this sector, obviously we are part of a global marketplace, and this product is traded freely around the world, and indexed globally. We saw continued supply chain disruptions globally, causing a disconnect between Eastern monomer and polymer markets and Western monomer and polymer markets. That obviously results in kind of a regional supply and demand imbalance. We also saw a lot of oil price volatility, which is a leading indicator of some of the polymers.
Within our world, our margin drivers in polymers or in Safripol is the index pricing of our finished products, so PET, HDPE, and polypropylene, and that's driven by global supply and demand. The index pricing of our raw material products, being ethylene, propylene, PTA, MEG, and PIA, those are also indexed and also driven by global supply and demand. Obviously, the rand dollar U.S. exchange rate, where we trade in products in different currencies and obviously sell in rands. Global duty structures. Obviously, these products in a global marketplace, that industry is significantly influenced by global duty structures. We have obviously in rising or falling markets and volatile markets, there can be a degree of margin impact through the procurement to sales cycle.
In other words, when you commit to the price of real raw material and when you commit to the price of the product that you sell. Within that environment, we have a very clear strategy within Safripol to firstly beat the index. As management, our role is to do better than the index and secondly, to moderate cyclicality. This is a cyclical business, and we employ various methods to try and moderate that cyclicality and try and get a smoother earnings profile. With that, we concentrate a lot on our product range and our regional sales mix.
Quite a big factor that had an influence during this period was renegotiation of a key raw material contract, where we managed to agree a correction in the indices on which it is based to have a fair ethylene price and to provide a margin collar that takes out a large degree of volatility in that polymer. Safripol had a fantastic year, really strong performance by that division. Revenue up 35% to just over ZAR 10 billion. Operating profit up 227% to ZAR 1.4 billion, with an operating margin of close to 14%. We experienced really strong demand across all product categories, and that was both local and international demand.
We continued with our slow but consistent move toward higher margin grades for more durable applications, and those are usually more technical specifications which are less suitable to import. As I mentioned earlier, we managed to renegotiate our ethylene pricing contract, which gave us reference to more relevant indices and which provided a margin collar to take out a degree of volatility. We did, during the period, have a temporary ethylene supply constraint which affected our production volumes and sales volumes, which you'll see on the next slide. Very pleased to say that our PET operations returned to normality. Production up 16%, following last year, where we had a five-yearly maintenance shut and debottlenecking of the plant.
Really pleasing for us to say that plant is now operating consistently at the feasibility parameters of when we expanded that plant, a couple of years ago. With that, we managed to achieve our Section 12I investment incentive requirements, and that was recognized during this year. During the year, we did make an investment in our raw materials, obviously with inbound supply chain volatility, port disruptions. This business imports a large part of its raw materials for PET, and we decided to increase our stock levels as a buffer to ensure continuity of the plant. Overall, we had a healthy balance between increase in operating profit supported by indexed, as well as increase in operating profit due to internal operational factors.
We also continued to drive our Let's Plastic Responsibly campaign. We're doing a lot of work around, trying to encourage more, responsible and sustainable use of plastics. That goes around reducing, recycling, repurposing, et cetera. That remains a key focus of us in terms of sustainability of our own business and the sector in general. In terms of, the key metrics for Safripol, from a revenue and volume analysis, firstly on PET, you see their revenue up, volumes significantly up, both in terms of sales and production. As I said, really pleased with the output of that plant, comfortably achieving our expansion parameters and actually exceeding the yields, on which that plant was designed. Really pleased with what that team has managed to achieve there. HDPE, revenue up, largely price driven.
You can see their volumes of both sales and production down, and that was largely the result of an ethylene supply constraint coming in from our primary supplier, which was resolved during the period. Polypropylene, good performance, revenue up, production volume up, and sales volume up. You'll notice there, the exchange rate was relatively stable, average on average, throughout the year. If we then move to the second slide, there's two elements to this slide. The first three columns really provide a trend direction, and the last two columns provide your half-on-half comparatives.
These margins are Safripol's actual margins, so it includes both index movements as well as the internal work that we do, whether it is through range management toward higher technical specification, higher margin products, as well as any internal efficiencies that we've managed to unlock, operationally. You see there PET up 54% on prior, HDPE up 32%, and polypropylene up 46%. Just to note, and Frans will go through it in a bit more detail as well, with the renegotiation of our ethylene contract, we had a ZAR 91 million adjustment in relation to the prior period, which for IFRS purposes, was recognized in the current period. These margins have been adjusted to get that into the correct period. Really pleasing performance from Safripol, and really well done to that team.
If we move on to Unitrans. This is Unitrans Group as a consolidated view. Revenue up 11% close to ZAR 10 billion, giving you an idea of the scale of that business. Operating profit disappointingly down 11%. I think a lot of good work done there. A really disappointing result and obviously the impact on margin close to 6%, which is down on prior. Within this business, we are starting to focus more and more on certain primary sectors, which you'll see coming through in the divisional reports. You'll start to see us illustrating the value of the group more and more as we go forward, as opposed to focusing specifically on each division.
If you look at the South African operations, really good performance from this division. Revenue up 11% to close to ZAR 6 billion. Operating profit up 53% to close to ZAR 400 million, and operating margin up 6.6%. The division performed really well. They obviously, as I've said, both revenue and margin growth despite the challenges presented by the civil unrest and the floods and the truck driver protests. I think what's important to note here is that this division does both inbound and outbound transport around KwaZulu-Natal, where those civil unrest and floods were most damaging. They were able to actually find opportunity in that environment.
We spoke previously around the termination of a material contract for this division that was actually effective post-year-end. However, in terms of IFRS, we had a termination penalty, which was recognized partly during this financial period. If we take out the impact of that, revenue and operating profit were still up by 8% and 10% respectively. If we look at where that profit growth was, in our primary sectors of food, petrochemical, and mining, they performed well, and we were up. However, in the operations for cement, sugar, and general line haul, those sectors were particularly difficult. We found particularly competitive factors there with reduced volumes, and obviously that impacted on the profitability of those divisions. We continue to focus on our technology.
We're finding more and more, the supply chain and integrated operational services that we do is moving beyond the physical execution and more into the business intelligence that surrounds it, and providing our customers with really meaningful, business information that they can make more productive and effective decisions on. That's really a focus of us, within our Unitrans control tower. Overall, if we exclude the impact of the contract which we lost, which made up 18% of our revenue, we still continue to secure work with net new contracts of ZAR 152 million during the year.
I think overall, actually a really good performance, unfortunately overshadowed by the loss of a key contract, which when I get to the outlook, I'll give some insight in terms of how we're dealing with that. If I then look at the Africa operations, and I think if ever there was reference to a perfect storm, it really applies to this division. Revenue up 7%, largely driven by the fuel impact being passed on. However, operating profit down 77% to ZAR 48 million, was a very low operating margin of 2.2%. So within our road freight business, that largely focuses on petrochemical.
We were affected by the civil unrest and the flooding in KwaZulu-Natal, which is our primary point of departure for most of our petrochemical bridging work. A lot of the cross-border stuff all emanates out of KwaZulu-Natal. Obviously had a major impact on us. We had continued border restrictions within our primary market of Mozambique. Although those were lifted, it's taken a long time for that country to open up properly and for industry demand and tourism demand to return. We also had civil disruptions in Eswatini, which is both an in-country agricultural space as well as a petrochemical cross-border and in-country operation.
In terms of our agric, we were affected by lower cane yields, which obviously affected the volume that we transport, harvest, et cetera. We had weaker mill performances from our customers. We had industrial action at some of our customers' sites. Not our people, it was really our customers' people. Unfortunately, this kind of flooding in KwaZulu-Natal actually stretched further up the coast. With severe wet weather conditions in some of our territories, we had a later start to the season. We are continuing with expanding into a more technology-driven precision agriculture services. This business has gone way beyond simple load and haul of cane.
We now do a whole suite of complementary agricultural services using fantastic technology again, and providing our customers with not only services, but a lot of business intelligence for them to make more effective decisions in terms of running their businesses. Our mining operations performed well. We operate in Madagascar and Botswana primarily, with a bit in Namibia, and that performed well. We started up some rail operations. As we said previously, our philosophy around these kind of things is we wanna start small, learn as we go, make small mistakes. That has been tough for us. I think if we look at this division overall, we had a lot of stuff on the go and perhaps not the ideal time to start up something.
In any event we did, it made a small loss for the year, ZAR 19 million, which I think in context is not bad for a startup. I'm happy to say for July and August, it's making a small profit. If we can get that right, I think it can be a significant opportunity for the group. Net new contracts of ZAR 300 million signed during the year. Just to give some context around our split, and I've referred quite a bit to Botswana, if you just look at the revenue split there, it's 28% of our revenue, which obviously the impact on our profitability. If we move on to passenger, revenue up 15% to ZAR 1.9 billion. Operating profit down 22% to ZAR 148 million.
Really disappointing. I know that. I'll explain a little bit more around that. Presenting an operating margin of 7.8%, which I think in context is still a healthy margin. We found relatively flat market conditions. We haven't returned to pre-COVID levels yet. Revenue really went up through fuel cost recoveries, an increase in ticket sales, kilometers traveled and some special hires. We've made really good progress during the year in terms of dealing with some legacy issues of low margin or loss-making contracts. I think that team is starting to gain real traction in dealing with some of those legacy issues. Really disappointing for us, I think this business actually performed quite well. It was really stable.
We were gaining our momentum, and unfortunately, we picked up a non-recurring item around certain tax treatment, which we've made a provision for of ZAR 41 million, which I think is really disappointing in the context of how this business is going. Adding that back, you'd see it's a relatively stable performance with prior. Greyhound and Citiliner are out of our world. We disposed of those assets, so you'll see as we go forward now the benefit of that on our returns and margins. We've got ZAR 47 million left of tourism coaches. Really pleased post year-end, we've sold almost half of that, and the balance will just feed into our existing fleet, and that will be a thing of the past for us.
We've appointed a new CEO in this division, effective 1 December. With that, we've shifted some management. It's really brought a fresh set of eyes, fresh energy, and it's kinda getting a lot of the operational disciplines and efficiencies back in place. Nico Boshoff, who has really been in that business for 40 years, and really knows it intimately, remains on a consulting basis to us, so we haven't lost those skills, and I think it's a great balance in terms of how we deal with that going forward. We mentioned at half year a key contract in Mozambique, we're not finalized there yet, and we're actively working in terms of the potential renewal of that contract. Lastly, we move on to DriveRisk.
This is a new business for us. We acquired it, effective December 1. It's really been an entry point for us into a new sector. It is a business that uses great technology, video telematics and predictive analytics, so it uses artificial intelligence and machine learning, to learn from behavior to effectively be predictive of future behavior. We built unique user interfaces which use events as and when they happen in real time to support drivers to be able to drive more safely on the road. It is a fleet owner business, focus business, so this is not around individuals. This is around fleet owners with large fleets across multiple sectors. Currently, we operate in 37 countries. Performance for this year was seven months.
Unfortunately, the same issues affecting our automotive business affected this business with global semiconductor shortages, obviously every device we have is an electronic device requiring semiconductors, and we just weren't able to get our hands on product to be able to fill our order book. We remain in a favorable position with good order books, strong sales pipeline, and we're now starting to see that product coming through. Overall, if we look at the operational performance, it's a mixed bag. We've had some really good performances, and congratulations to those staff involved in those businesses. We've had some businesses that have really struggled.
I think just to the individuals involved, those people have probably worked harder than the others, and have had to be more resilient, and they've had to show more character. I think those are valuable lessons learned and valuable experience built, which I think is an asset to us going forward. Overall, that's our performance. I'll hand over to Frans to go through the financial implications of that, and then I'll come back again just to talk through the outlook going forward. Thank you.
Thank you. Thank you, Gary. Thanks for everyone dialing in today to listen to us. From a consolidated basis, the financial highlights, it's really a privilege for us to sit here today and present these numbers to you. It's in many ways record financial performance for KAP with revenue up 17% to ZAR 28 billion. EBITDA up 27% to ZAR 4.4 billion. Operating profit up 40% to ZAR 2.9 billion, and an operating margin of 10.5%. Headline earnings increased 73% to ZAR 0.744. Cash generation from operations up 17% to ZAR 4.1 billion. With that, improved net debt to EBITDA ratio of 1.7x , and also the highest dividend that we've ever declared of ZAR 0.29 up 93%.
If you look on the revenue growth throughout the business, you can see that all the divisions' revenue increased with the exception of Restonic and Feltex. I think Gary explained that really well in the operational update. From operating profit perspective, increased by 40% to ZAR 2.9 billion. I think this slide is probably the best slide illustrating the strength of our diversity that we talk about often in the KAP group. You can see PG Bison increased operating profit by ZAR 216 million. Safripol increased their operating profit with an astounding ZAR 972 million, and also Unitrans South Africa increased operating profit by ZAR 133 million.
Obviously, we've discussed the divisions that found it difficult in the market for various reasons, but overall basis increased by 40%. From operating margin perspective, it flows through from operating profit and revenue up 170 basis points to 10.5%. We've given you or we provided you with a five-year history here per division, as part of our continuous, additional disclosure or improved disclosures. New on this slide is consolidated Unitrans that we've included, where we consolidated three businesses of South Africa, and Passenger. If you look at the consolidated income statement, like I said, the diversity is coming through in this income statement. Our business model proved to be resilient. If you look at the EBITDA, they increased 27% to ZAR 4.3 billion.
With that, only 7% increase in depreciation, and that you can see flowing through to the operating profit that increased 32% to ZAR 2.8 billion. When you analyze the income statement, you have to take into account the effect of the tax rate change, which I will explain a little bit later. The effect of shares that we've repurchased during the year, where you can see headline earnings increase to ZAR 1.9 billion. The weighted average number of shares reduced by 3%, and the net effect of that is headline earnings per share ZAR 0.744 or up 73%. In these numbers, there's always some anomalies that you need to take into account.
We're providing you here with an adjusted headline earnings per share slide where there's mainly four material items to consider when you analyze the results. Reported is ZAR 0.744. The first item that you need to consider is the Safripol ethylene price adjustment of ZAR 91 million that Gary referred to. That relates to FY 2021, so we take it out of FY 2022 and allocate it to 2021. That's ZAR 0.026 per share. Also the Unitrans termination penalty. The total penalty is ZAR 125 million. In terms of IFRS, ZAR 107 million was accounted for in FY 2022. If you take that out of the numbers, ZAR 0.031 per share.
The Safripol Section 12I, where we've achieved now and signed off by SANEDI, the energy efficiency in terms of the PET plant, that we've upgraded, that relates to FY 2020. If you take that out of the numbers, ZAR 0.027. Then lastly, the change in corporate tax rate from 28% to 27% at a ZAR 91 million impact on our deferred tax balances. At the financial year-end, 30 June, the income statement sits at 28%. That's readjusted to 27% at year-end. That's ZAR 0.037. That brings you down to an adjusted headline earnings per share of ZAR 0.623. Still a healthy 37% up, and even the ZAR 0.623 cents is the highest that we've achieved before.
If you look at the tax rate, which there are also anomalies I need to bring to your attention, where you start with 28% statutory tax rate for South Africa, where the effect of the effective tax rate is 3.9%. That was income, so you take it up. Government grants, we've discussed that's 2.9%. Then there was also impairment of goodwill of ZAR 80 million relating to Feltex, more specifically relating to the Maxe business. Taking into account those three main items, the effective tax rate ended on 24.6%. If you look at the balance sheet, it remains strong during this period. If you look at the balance sheet, there's various items to consider.
You'll notice that there was significant investment in operating assets and businesses. There was a slight decrease in biological assets, which I will explain a little bit later. There's a planned increase in net working capital of ZAR 542 million, resulting in a planned increase in net debt of ZAR 929 million. With all of that, we improved our serviceability ratios. Net asset value per share increased 15% to ZAR 4.66 per share. If you look at the detail on certain specific items on the balance sheet, on the plantation revaluation, there was a net decrease of ZAR 80 million. Remember, this is only the plantations, not the cattle. The numbers that Gary referred to is all biological assets.
There was an increase due to growth and enumerations of ZAR 176 million, offset by more than offset by harvesting. Then there was a ZAR 51 million decrease due to inflation differential, basically, cost escalations in excess of price increases that we've seen throughout the year. On the right-hand side there, I just remind you, we have reported on this at half year extensively. Just remind you about the fires we've experienced in our northeastern Cape plantations in August 2021. The value of the affected plantation is ZAR 164 million. We estimate to recover the full value through salvage operations and insurance, and that's been accounted for in these results.
If you look at the net working capital, there was an increase of ZAR 542 million through the year, where inventory increased ZAR 818 million, receivables increased ZAR 640 million, offset by payables increase of ZAR 940 million. All those items were impacted by increased selling prices and cost escalations. We've also strategically invested in inventory to mitigate the global supply chain disruptions. That is in all our businesses, but mainly a large part of that number comes out of our Safripol business, in terms of PTA stock. Our net working capital, like we've mentioned in the half year results presentation, is approaching a more sustainable level compared to the prior year. We continues continuously focus on optimizing our net working capital throughout the financial period in all four.
In all 12 months. From a cash flow perspective, we saw the cash flow with EBITDA increasing 27%. We've invested ZAR 463 million in working capital. That's due to our continued efforts to normalize working capital. That results in a 17% increase in cash generated from operations and a cash conversion ratio of 94%, which is in excess of our 90% target. Well done to the divisional management in generating the amount of cash that we have for the period, for the year. If you look at the rest of the cash flow statement, where we invested the money, we've invested ZAR 2.7 billion for the year, a significant number. I'm going to have a more detailed slide on CapEx after this.
When you look at the cash flow statement and specifically the investing activities, it includes the disposal of the Intercity assets for ZAR 84 million. It also includes the acquisition of DriveRisk. There was an investment in associate for ZAR 96 million in Oreo. A dividend that we've paid last year of ZAR 0.15 per share, and also ZAR 310 million worth of shares that we've repurchased. If you look at the detailed CapEx, this is a modification to the slide that I used to have here. If you look on the left there, is basically the relationship between total CapEx, expansion, replacement, and depreciation. Where we've invested ZAR 2.2 billion in total for the year, of which ZAR 1.1 billion was replacement.
The depreciation for the year is ZAR 1.3 billion. Over time, you can see that we stay always in line, but over time, the slide shows you that we've invested less in replacement than our depreciation charge. On the right-hand side, we have included here material and strategic items. First of all, for PG Bison, we have the Mkhondo board plant expansion, which we've completed in March. We give you the information and the estimated future cash flows for the MDF expansion, as well as the Boksburg value-add expansion, which is a MFB press and a gloss line. For Safripol, the same. We provide you with the information on two strategic projects for us.
HDPE conversion, that's where we change the HDPE into selling a higher value product in line with our strategy. Also a PV 10 MW plant that we are busy investing in Safripol. Lastly, material items remains Unitrans in terms of CapEx, where the total is ZAR 1.1 billion and split between replacement and expansion. If you look at the acquisition that we've done during this year, and we have given you this information at half year. Again, an exciting acquisition for us. It was effective 1 December 2021. We paid ZAR 404 million for the acquisition. 10% of the shareholding is retained by management.
We finalized through this year-end and audit the purchase price allocation, and we've allocated ZAR 241 million net of the fair tax to intangible assets or supplier contracts. Then the balance of ZAR 122 million was raised as goodwill. On the right-hand side, we provide you just with the information there in terms of historic multiples that we bought the business on. Share buybacks. We've concluded this before the half year period already. 65 million shares we bought back for ZAR 310 million. We saw an opportunity to enhance shareholder value and we bought back the shares. This had an effect of a 3% reduction in the weighted average number of shares for the year. Net debt increased ZAR 929 million.
I've got the detail there on the slide. There's a couple of factors you need to take into account. The significant investments, which I've explained, ZAR 2.7 billion. There was the investment in working capital. We've paid a dividend for the year. We've repurchased shares and the acquisition of DriveRisk, ending or resulting in net debt ending at ZAR 7.5 billion. On the next slide, we have the detail here in terms of all the bonds that we've issued and repaid during the year. It was a significant year for us. It was a busy year, and there was intentionally by us to take large maturities and replace it with smaller, more frequent issuances.
In total, we've issued or tapped bonds of ZAR 3.1 billion, with settled bonds of ZAR 1.6 billion. GCR confirmed our rating as A+ in November 2021. From a serviceability perspective, with net debt increasing, our gearing ratio actually remained fairly stable, only up 1% to 65%. Our net debt to EBITDA decreased from 1.9x to 1.7x, in line with what we've been forecasting or telling the market at our half year presentations. That's well within our internal target of being less than 2.5x net debt to EBITDA. If you look at our maturities, it's nice to see this slide to even out. Last year we had some significant refinances to do.
You can see there, we've got ZAR 1.7 billion of cash on the balance sheet at year-end. It's our intention to refinance the ZAR 1.5 billion of bonds that mature in this 2023 financial year. We've got sufficient capacity and liquidity to refinance those maturities as and when they come up. On this slide, I would just like to say thank you to our debt capital markets for your continued support and also to our banking partners because your support is very valued by us. Lastly, thanks for listening to our results presentation. I now hand over to Gary to take us through the outlook.
Thank you, Frans. Moving on to the outlook, and I'm gonna move quite quickly through this. Generally, you'll see it coming across most of the slides. I think FY 2023 is gonna be a challenging year, just with consumer demand impacted by higher inflation and elevated interest rates. We expect the global supply chain disruptions to ease but not fully resolve, so I think we'll continue to see that support for local manufacture and supply. In this business, we'll continue with our demand creation activities, focused on value-added products and supporting our customers to be able to supply consumers. Then obviously, with the 14% capacity expansion coming through, on our particleboard line, that's gonna add extra volume and revenue.
We've got an MFB and a gloss line coming on September, October, which will add more to our value add capability. Beyond that, this business is evolving more and more towards a clear product market consumer customer focus, and that will continue. We'll continue to invest actively in our technology to be the lowest cost of product to market. Obviously, aligned with that is our new investment coming through in our MDF line scheduled for commissioning in July 2024. If we look onto Restonic, hoping for a much better performance from this business into the new year. We expect general consumer demand to remain subdued.
We are very focused and will continue to invest on our brand, on our promotional activity, supporting our retail partners, and range development really to support market share growth. Those are areas that we're certainly not gonna cut back in tough times. In fact, we're gonna invest more. Obviously key to us is recovering the impact of cost inflation, and that's obviously through procurement, through pricing, and through product design. I'm pleased to advise that we've appointed a new CEO in this division. Michael Metz, who's been with that business for literally 40 years, reached retirement age in August, so Mike has retired.
We have appointed Michael Borcherds, and Mike remains with us on a full-time capacity in a consulting and advisory role to Michael, with a specific focus around certain projects and continued efficiency programs within our manufacturing, which is really his primary love of what he does. We are expecting some revenue and operating profit growth within this business into FY 2023. Looking beyond that, we've separated these businesses. As I said, we've got a primary focus on the sleep sector with market, product, and brand at our core. We've actually activated a longer-term brand strategy to create further demand with downstream and future consumers. We are also investing in our logistics capability, and then again, technology and integration to always be the lowest cost.
In terms of Feltex, again, expecting a great improvement with revenue and operating profit growth. We see a recovery in both manufacture and sales volumes with the OEMs, and hopefully much less volatility as a result of easing semiconductor shortage constraints. Also, the startup issues with the F22 model will be out of our system. We do have a new model which we're launching in September, October. That's the Ford Ranger. We're well prepared, and we don't foresee the same problems repeating themselves there. Beyond 2023, we've got continued product development, continued new model introductions. We've got the BMW X3 coming in October 2024. So that's quite material for us. And obviously with that, we look at opportunities to expand our product ranges.
Our APDP continues to support that sector with a strong emphasis on localization. That's really an area that we working hard on. Also just with move towards new electric vehicles, our product ranges are well suited to that, so really staying close to policy development in that area in terms of where NEVs are going. Moving on to Safripol. We see the same softer consumer environment. However, with this business, we are globally competitive. We benchmark our product to remain in the top quartile, and that provides significant export opportunities. While we see local markets suffering, we see continued export opportunities, which are really, to a degree, assisted by continued global disruptions.
Again, while we see supply chains easing to an extent, we don't see them fully resolving. We do see margins moderating, so I think we've come off a high in terms of margins, so we do see those coming back, however, still remaining at healthy levels. Our renegotiated ethylene contract has provided a degree of protection in terms of the indices that we reference against, as well as a margin collar, and that will take out a large degree of volatility. We continue to drive the change management so that we see as a tangible benefit to us. It's happening incrementally every day, as well as the move to non-single use applications. Beyond 2023, we see this continued normalization in supply chains taking place and the regional demand supply imbalances normalizing.
What that new normalization means, we don't know, but it will certainly be less volatile, we believe, than currently. We'll continue to focus on beating the index on one side, as well as moderating the cyclicality. That is a constant and long-term objective of management. Again, margin management is critical for us. Higher specification, higher margin, non-single use applications. With that, R&D towards enabling recycling of those products. It's all good and well to encourage recycling, but the product itself needs to be or needs to enable and complement recycling. Then we're investigating the expansion of our polypropylene line. This we did investigate previously. We actually put it on hold for a couple of years.
That we've dusted off and we're really focusing on seeing what the opportunity is to once again expand our polypropylene line. In terms of the Unitrans business, so I don't know if you've noticed going through the presentations, just the purpose and vision statements on the right-hand side. As you go through Unitrans, you'll see consistency in each one of those, where we're starting to pull these businesses closer and closer together and focusing on those key sectors of food, agriculture, mining, petrochemicals, and commuter transport, and really leveraging off the scale and the expertise that we have in those key sectors and to try and promote a more streamlined client interface. You're gonna see that as we go through just the commonality with that. The macro we expect to remain challenging, volume and price pressure.
We've got lots of opportunities that we're pursuing. I think that constrained environment, the price pressure where we've come from with the severe disruptions creates challenges and opportunities. With that, there's certainly a move to quality, a move to reliability, and that's really the mantra of Unitrans, is their ability to deliver. The assets related to the terminated contract, we've actually incorporated into a focused rental fleet. Globally, your ability to secure assets in short time is difficult. The price of those assets is going up, so we've decided to retain the bulk of our logistics assets that were previously dedicated to that contract to use part of them internally as well as to rent those. I'm pleased to say that most of those are actually gainfully employed as we speak.
Taking out the impact of the terminated contract, we continue to see revenue and operating profit growth within this division. Having said that, we'll continue with the process. I mean, it's rationalization of underperforming contracts. It's no different to range management in one of our manufacturing businesses. It's taking out the low margin at the bottom and trying to replace with higher margin, better returns at the top. That we'll do through continued focus on those key sectors, as well as adding more and more complementary operational services around our core logistics and supply chain offering. That gives us the ability to grow revenue and improve returns over time.
As I mentioned at the beginning, a clear strategy to move the three divisions of SA, Africa, and Passenger closer to really concentrate on certain sectors and get a more streamlined client interface to grow revenue. In terms of Africa, we've already seen the cross-border access opening up. We've seen in-country distribution starting to improve, primarily in Botswana. The benefit of that is it's coming off a restructured operational base. In agriculture, unfortunately, the slow start to the season has kind of carried on a little bit into the new year. Those teams are really focused on keeping their cost base down. The cane is in the ground. It's gonna come out.
It's just a timing issue, and it's really just keeping our cost bases under control until we release them and get in to get that cane out. We're quite comfortable that the yields are higher than in prior year. Still quite optimistic in terms of how that part of that division will operate. We'll continue to drive precision farming and complementary operational services. This division is really a leader in terms of seeing the value and being able to grow that part of what we do. We will take a strategic decision on our rail operations. As I said, they are profitable in July and August. It's been a bit of a challenging startup for us.
As I said, if we can get that right, I think it's a great opportunity for us. It's small currently. It's two train sets operating one route, but we've got really good interest and good demand now, so hopefully we can get that to run at full capacity. Again, in this division, growth in revenue and operating profit expected. Beyond that, key focus, agriculture, mining, and petrochemical. We've done a lot of work here in terms of their operational systems and the business intelligence that it generates for our own efficiencies, as well as providing far richer business intelligence to our customers. If we then move on to Passenger, again, consumer under pressure. We expect the trading environment to remain similar, with high average fuel prices, inflation, interest rates.
That's obviously gonna impact on passenger numbers, cash fare revenue, obviously linked with relatively high unemployment numbers. Key focus in this business, as we've said previously, we need to resolve those legacy contracts which are marginal. That on its own can bring nice growth to this business. We need to renew our Mozambique contract. As I mentioned earlier, the disposal of our tourism coaches, the ZAR 21 million that was executed in July, and the balance will be incorporated into our fleet. Again, this business, we expect revenue and operating profit growth. Beyond that, really more of the same.
We see continued growth in the Mozambique territory, and then we see specific opportunity within this division to leverage more of the footprint and client base of the South Africa and Africa operations. Really that's gonna be a key focus area as we move beyond FY 2023. Looking at DriveRisk, I mentioned at the beginning, Frans mentioned it quickly in his presentation, but this was really an opportunity for us to invest in something new, but at the same time, something that we know and understand very well and something that we've been a user of for several years, and we're an absolute believer in the product.
This is a business that focuses on using technology, various hardware components integrated into very clever software that aggregates multiple data points and creates single user interfaces, really to be able to provide real-time action. It manages risk, it manages safety, it improves efficiencies, it protects fleet assets, and it does it through a combination of video recording, analytics of facial and body posture, analyzing that, transmitting it almost in real time to be able to take action in real time, and then reporting it on an ongoing basis. I mean, this is really directed around two issues of improving the ability of drivers to remain safe on the roads and to improve road safety as a result within the country.
We've got real-life examples of drivers asleep at the wheel and being able to wake them up, get them to the side of the road safely, and really avoid an accident. Really clever technology and a really exciting business with real impact. Currently we're in 37 countries. We've got over 50,000 active devices in operation, and I think that's really just the starting point. If we just look in very simple terms, and I have explained this previously, in the top left, those are our primary hardware devices. The one on the left is a DriveCam, the one in the middle a DriveAlert, and the one on the right is a Mobileye.
We integrate those hardware devices onto a single platform, which on the right there you see we use the Lytx technology platform, where we record an event. The information is uploaded into the cloud in real time. It gets analyzed using artificial intelligence and machine learning. Your actual events are then analyzed in real time by a person to verify the validity of them. It then comes down to our call center, which is operated 24/7, which goes straight to a supervisor, straight to a driver, and it's actioned in real time. Then obviously that comes down to the bottom left, where we take that consolidated information and produce really rich data that we can use in terms of, as I said, driver management, safety, efficiency of fleets.
A really exciting place for us to be moving into. I think in terms of the purpose of a business, it's a really cool thing to be involved in terms of getting people home safely and improving road safety in the countries that we operate. Looking into FY 2023, we've got a really strong order book, good sales pipeline beyond confirmed orders. We're really increasing our penetration into non-road freight markets. This product has application in a broad range of sectors, including mining, agriculture, security, retail merchandising. It's really got broad application. We will be launching a strategic brand and marketing campaign to really get the word out there around the benefits of this product. We acquired a small company just post year-end called Viewmetrics.
It's not material by size, but very strategic in terms of our ability to accelerate our user interface development. Then the big challenge here is really to grow the people capacity, which is gonna be our key focus for this year in order to really execute on our plans. Beyond that, we've got really exciting plans in terms of how we integrate risk management and safety with efficiency. The focus on the driver, so whether it's information, education, training, coaching, and really respect of the driver experience. Very easy whenever there's an accident, blame the driver. Most often, it's not the driver's fault. Then productizing our services.
We do a lot of work around active services, and it's really taking that beyond service into a product that can be sold more broadly, and at the same time taking our data and incorporating that into a product as well to be able to monetize it. New for us, but an exciting place. Really, I think a mixed bag for us next year. I think it's gonna be a tough macro overall. We've got the ANC elective conference coming up in December, which I think is gonna bring an element of uncertainty and volatility within the South African context. We're gonna have, as I mentioned, a probable correction in polymer margins. As I said, they will come down. We believe that they will still remain at healthy levels.
We hope that the recovery in performance from Unitrans Africa, Unitrans Passenger, Feltex, Restonic will be sufficient to make up for that, as well as obviously the additional DriveRisk as a new business coming in with only seven months in the prior half. Our strategy remains intact and very clear. We had a market day, capital markets day a couple of months ago, where I think we were very clear in terms of where we're going and what we're trying to achieve. That remains fully intact, and we really remain focused on the execution of that. Overall, just a very heartfelt thank you to our staff.
It's been an enormously challenging year for many of our people in, especially in the KwaZulu-Natal area, but actually, across all the areas that we operate. Really heartfelt thanks and sincere gratitude for your hard work and your commitment to the company. These are your results, and you should be very proud of them. Then just to our customers and suppliers, without which we wouldn't have a business, so thank you very much for your ongoing support. Obviously to our shareholders and our debt capital markets that provide the funding to run our business and then to our banking partners. We really appreciate your support. Then lastly, just to our board, for the support of the strategy, and the management of this business going forward.
With that, thank you for your time. It's been a little bit longer than we had hoped, but I think we've we proud of our story and we like to tell that story in terms of what we're doing and the outcome of it. Thank you very much. We are now open to take questions. Christina has got hopefully all the questions and a mic. Christina will ask the questions, and hopefully Frans and I can answer them.
Thank you, Gary. So we've got two questions here that are focused on margins. First one from Anton from Optimum Investment Group. If possible, can you give clarity on target operating margins for each segment? And when do you expect to achieve these target operating margins? And then I'll ask Itumeleng from Eskom Pension and Provident Fund question as well. Well done on the results. What do you think is the sustainable margin for PG Bison? Can it revert back to 20%? What are the levers you have to improve margins, if any?
Thank you, Christina. I'll take that question. I just remind you to go to our website and look at the capital markets presentation that we've done end of June. In there is the margins, but in summary, PG Bison, we guided to, say, 18%-20% by 2027. Safripol, a 7%-9% operating margin through the cycle. Unitrans, 8%-10%. Feltex at 10%-12%. Restonic at 13%-15%. DriveRisk, we would like to see that business in excess of 12%.
Thank you, Frans. From Kobus from All Weather Capital. Congrats on a good set of results. On your adjusted HEPS number on slide 22, are there any additional tax allowances for PG Bison and Safripol available in the coming years, given the CapEx plans on slide 29?
In terms of Safripol, we're looking at the polypropylene line. We have not approved that as a board yet, so we haven't applied for any government incentives. In relation to the PG Bison MDF plant, we do have Section 12I approval and once we commission that plant in July 2024, we will claim that incentive.
Another one from Kobus. What percentage of the share buyback authority does KAP have left?
When we buy back shares, we take it to the board for a specific approval by the board. We've got approval last year for the 65 million shares to buy back. We've executed that. I think in our AGM, we've got up to 10%, but I don't think that's relevant. We take it to the board. It's part of our capital allocation. We take the decision in terms of what opportunities are ahead of us.
There's just to add to that, there's no plans currently to buy back any more shares at this stage.
Another question from Anton from Optimum Investment Group. How are you thinking about working capital management? Are you seeing good orders? Is there a risk that a slowdown would lead to KAP sitting on inventory that have high input cost?
Yeah. I think as a general principle, we manage our inventories very tightly. I mean, up to now, it's been a challenge to try and grow inventory because the demand for our product has been very strong. It was actually a conscious effort or a conscious decision to actually grow inventory. The only place where I think there's a risk of sitting with inventory in softening markets at this stage would potentially be at our PET operation, where we have a procurement to sales cycle, which in rising markets is beneficial and in falling markets is not beneficial. That's something we obviously manage very tightly.
We are at the moment, as we said, sitting on higher than normal levels of some of our raw materials, specifically to counter supply chain disruptions. In the context of KAP, I don't think it's a material risk at this stage.
Thank you. I've got two questions here from Lawrence from Clucas Gray Asset Management. The first one, I think you've answered. What is the sustainable through the cycle margin for Safripol? The second one, what is the logic behind taking out the longer-dated bonds and replacing them with shorter-dated bonds, which will require that you return to the debt capital markets more frequently?
Yeah. Just to clarify my comment there, it was larger bonds, not longer-dated bonds. We always try and place looking ahead in terms of where we have gaps in our maturity profile, either between 3 and 5. What we've done in the past is especially after the acquisition of Safripol, we had some large maturities, like over ZAR 1 billion in one hit. We try to break that up in ZAR 500 million chunks to manage the refinancing risk. That's what we're trying to do.
Frans, a question from Herbert from Investec. With the caps and collars in place and the moderating chemical prices, what kind of margins have you been realizing in the past two to three months?
No, I'm not comfortable to answer that question at this stage.
That's fine. Question from Richard from Avior Capital Markets. In terms of Safripol, can you give us an idea of the percentage revenue breakdown between local and exports, currently and historically? Additionally, is there any difference in the margins for local versus export sales? Thanks.
It has predominantly been local sales. We have had a smaller element of exports. We're very selective in terms of when and where. We've got certain markets which are lucrative, where we can gain similar margins to our SA margin, which obviously are first choice. It's really when we have volume oversupply that we would try and penetrate other markets which we haven't had to do to date. Generally, whether it's PG Bison or Safripol, local margin and demand is better. It's our preference. We do, however, have long-term customer relationships over several years, which we need to honor and maintain, which we can obviously sell more into at certain periods. Those margins are generally at a similar level.
Thank you, Gary. I'm gonna ask Talia's question, she's from Atomba Wealth, correctly. Am I correct in saying that your division's not linked to OEMs? By that, I mean Logistics and Feltex have a better moat.
Sorry, please repeat the question.
I think she means that do your divisions outside of Logistics and Feltex have a better moat than the others?
Listen, I think each business is unique in its own right, and I think there are certain barriers and risks of each business. I think that's what you see in a diversified group. That's how we try and put it together. I think if you saw in this environment and you just look at logistics on its own, we have the Africa business that was exposed to certain impacts, compared to the SA business which was not. In other words, Africa is a net exporter out of Durban. The SA business is inbound and outbound out of Durban, which provides a natural hedge. I think in the current environment, we can see by the results. You saw three businesses benefiting and four businesses finding it difficult.
If you look going forward, we're gonna see a degree of correction coming through in Safripol, and we believe the businesses that struggled in this year are gonna come back and recover next year. I think that's the nature of diversity is to be able to perform on average in different circumstances.
Okay. Thank you, Gary. Our last question links into what you've sort of discussed right now. Is the overall performance of the brands in line with KAP's expectations taking into account global and local economic challenges?
Yeah, listen, I think. I mean, PG Bison performed in line with our expectations. I think Unitrans South Africa performed in line. Safripol obviously performed in excess of expectations. The remaining businesses performed well below expectation in terms of what we require. I think collectively as management, I think if you asked any of the divisional operational management, I think that they would say the same thing. I can tell you now there's no divisional management out there in an underperforming business that's proud of their results, and they will certainly be out there doing everything in their power to get back to where they should be.
I think looking forward, the target margins that Frans mentioned right at the beginning, those are firmly in our minds and in the minds of the business. We've got clear strategies in terms of how we're gonna get there. It's really up to our operational teams now to implement those strategies and to really get back to where we should be within those divisions.
Thank you, Gary. We don't have any further questions. I'll hand back to you to close the call. Thank you.
Great. Thanks, Christina. Once again, thank you. Thank you very much for taking the time to listen to us. Thank you for your support of our business, and we really appreciate all the support that we get. Thank you very much. I think with that, we can close.