| Wed 20 Aug 2008, 9:00 | | OLG - OneLogix Group - Audited Annual Financial Results For The Year |
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OLG
OLG
OLG - OneLogix Group - Audited Annual Financial Results For The Year
Ended 31 May 2008
OneLogix Group Limited
(Registration number 1998/004519/06)
Share Code: OLG & ISIN Code: ZAE000026399
("OneLogix" or "the group")
AUDITED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 MAY 2008
HIGHLIGHTS
- RECORD PERFORMANCE
- REVENUE UP 95%
- OPERATING PROFIT UP 79%
- NET PROFIT UP 72%
- HEPS UP 42%
- ACQUISITION DELIVERING AHEAD OF EXPECTATIONS
CONDENSED CONSOLIDATED INCOME STATEMENT
Audited Audited
Year ended Year ended
31 May 31 May
2008 2007
R`000 R`000
Revenue 512 531 263 338
Operating and administration costs (424 830) (216 416)
Earnings before interest, taxation, depreciation 87 701 46 922
and amortisation (EBITDA)
Depreciation and amortisation (25 288) (12 139)
Operating profit 62 413 34 783
Finance income 450 372
Finance costs (12 738) (5 487)
Share of associate income 86 30
Profit before taxation 50 211 29 698
Taxation (14 286) (8 798)
Net profit 35 925 20 900
Attributable to:
- Minority interest 7 322 1 916
- Equity holders of the company 28 603 18 984
Net profit 35 925 20 900
Number of shares in issue (`000):
- Total 210 131 197 273
- Weighted 210 131 197 273
- Diluted 210 131 197 273
Basic and headline earnings per share (cents)
- Basic and fully diluted 13,6 9,6
SEGMENTAL ANALYSIS
Revenue
Logistics 490 085 242 352
Services 22 446 20 986
512 531 263 338
Operating profit
Logistics 64 608 37 223
Services 7 165 5 715
Corporate (9 360) (8 155)
62 413 34 783
Commitments
Operating lease commitments (not exceeding five 12 454 4 194
years)
The group has authorised capital expenditure over the next twelve months of
R81,8 million. R27,2 million is already committed.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
Year Year ended
ended
31 May 31 May
2008 2007
R`000 R`000
Net cash generated from operations 41 570 40 528
Net cash flows from investing activities (73 239) (72 221)
Net cash flows from financing activities 22 400 43 588
Net (decrease)/increase in cash resources (9 269) 11 895
Cash resources at beginning of year 18 270 6 375
Cash resources at end of year 9 001 18 270
CONDENSED CONSOLIDATED BALANCE SHEET
Audited Audited
At At
31 May 31 May
2008 2007
R`000 R`000
ASSETS
Non-current assets 227 533 144 396
Property, plant and equipment 181 450 123 598
Intangible assets 45 457 20 251
Interest in associate 116 30
Loans and receivables 510 517
Current assets 92 616 61 971
Inventories 3 189 1 986
Trade and other receivables 80 426 41 715
Cash resources 9 001 18 270
Total assets 320 149 206 367
EQUITY AND LIABILITIES
Equity 145 452 81 635
Ordinary shareholders` funds 133 091 79 260
Minority interests 12 361 2 375
Liabilities
Non-current liabilities 80 686 62 534
Interest-bearing borrowings 71 128 56 553
Deferred tax 9 558 5 981
Current liabilities 94 011 62 198
Trade and other payables 61 685 35 138
Interest-bearing borrowings 29 473 20 181
Taxation 2 853 6 879
Total equity and liabilities 320 149 206 367
Net asset value per share (cents) 63,3 40,2
Net tangible asset value per share (cents) 41,7 29,9
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Retained Other
capital premium income reserves
R`000 R`000 R`000 R`000
At 31 May 2006 1 973 32 484 25 767 -
Profit on sale of shares by the share - - - 52
trust
Dividend declared in subsidiary - - - -
Net profit - - 18 984 -
At 31 May 2007 1 973 32 484 44 751 52
Shares issued 128 14 916 - -
Dividends declared in subsidiaries - - - -
Minorities acquired on acquisition of - - - -
subsidiary
Revaluation of fixed properties - - - -
Net profit - - 28 603 -
At 31 May 2008 2 101 47 400 73 354 52
Revaluation Minority
reserves interests Total
R`000 R`000 R`000
At 31 May 2006 - 659 60 883
Profit on sale of shares by the share - - 52
trust
Dividend declared in subsidiary - (200) (200)
Net profit - 1 916 20 900
At 31 May 2007 - 2 375 81 635
Shares issued - - 15 044
Dividends declared in subsidiaries - (975) (975)
Minorities acquired on acquisition of - 923 923
subsidiary
Revaluation of fixed properties 10 184 2 716 12 900
Net profit - 7 322 35 925
At 31 May 2008 10 184 12 361 145
452
COMMENTS
The directors of OneLogix are pleased to present the audited financial results
for the year ended 31 May 2008, which represent a record achievement for the
group since inception and reflect exceptional growth in all key performance
indicators notwithstanding weakened economic conditions.
Basis of preparation
The accounting policies applied in preparation of the audited annual financial
statements are consistent with those applied in the audited financial statements
for the previous year ended 31 May 2007, save for the change in policy of
revaluating properties and not carrying them at cost.
The consolidated audited financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS"), International
Accounting Standard (IAS 34) and the Companies Act (Act 61 of 1973) as amended.
The annual financial results have been audited by PriceWaterhouseCoopers Inc.
and their unqualified audit opinion is available for inspection at the
registered office of OneLogix.
Review of operations
The group`s businesses have outperformed expectations despite challenging
trading conditions, particularly in the latter half of the year under review.
Vehicle Delivery Services ("VDS") operates in the vehicle logistics market and
is the major driver of group revenue and profitability. During the year VDS
continued to capture increasing market share in the contracting local passenger
market, reflecting the benefit of past investment in critical components of the
value chain such as logistics, IT and systems and people. This has resulted in
recognised superior levels of service that helped boost market share despite
declining vehicle sales. VDS further maintained its dominance in the cross-
border vehicle logistics market.
The strategic decision was taken in September 2007 to leverage existing
capability and enter the local commercial vehicle logistics market through
Commercial Vehicle Delivery Services (Pty) Limited ("CVDS"). The company
specialises in auto logistics of vehicles larger than 3,5 tonnes used for
instance in the construction and mining industries, which on account of size
must be individually driven rather than moved in bulk aboard carriers.
While escalating fuel prices do affect VDS` and CVDS` margins, increases are
provided for contractually with clients bound to absorb these to an extent.
PostNet, a franchised chain of 223 business service outlets for the high growth
SME market, sustained its record performance. Processes that more effectively
evaluate and secure new business opportunities began in 2004 and are now
yielding significant benefits for the business. With a 14 year history of
successive growth, PostNet is a defensive asset in OneLogix`s portfolio - well
established and largely resilient to market cyclicality. The award to PostNet of
the distribution rights for Neotel further positions the business for strong
growth.
Media Express continued to perform well and retained a substantial share in the
price sensitive niche market of express delivery service. The group will
continue to investigate integrated initiatives with PostNet as a means to
boosting performance.
Press Support and Magscene, the recent acquisitions which began contributing to
earnings from June 2007, excelled beyond expectations. These companies
distribute upwards of 30 million newspapers and magazines per annum direct to
the end user and have strengthened OneLogix`s presence in the printed media
distribution market. Press Support enjoys a strong foothold at national airports
and other tourist gateways, which the company sees as a growth driver in light
of an anticipated increase in tourism. Magscene has a spread of titles aimed at
the full spectrum of market segments. Focus going forward will be on expanding
market share in this major sector and honing operational efficiencies to
optimise profitability.
4Logix and Gijima are relatively high revenue, low margin businesses that offer
logistics solutions for the rail of bulk commodities to ports throughout South
Africa. A number of long-term contracts continue to drive a solid and
sustainable performance.
Financial results
Revenue increased by 95% to R512 million from R263 million for the previous
year. Operating profit grew by 79% to R62,4 million, representing approximately
12,2% of revenue. Net profit before taxation was up 69% from R29,7 million to
R50,2 million. Headline earnings per share ("HEPS") rose by 42% from 9,6 cents
to 13,6 cents per share. Included in the depreciation and amortisation charge is
an amount of R2,4 million relating to the amortisation of intangibles identified
on the acquisition of Press Support. This charge is expected to recur for the
next five years.
In spite of increased working capital requirements commensurate with growth in
revenue as well as payment of tax (see below), cash flow from operations
increased from R40,5 million to R41,6 million. The group invested R65,6 million
in infrastructure, of which R54,9 million relates to expansion of the VDS fleet,
R5,2 million to IT infrastructure, R3,6 million to storage facilities and R1,9
million to other assets. During the year the cash portion of the purchase price
for Press Support of R9,8 million was settled. The infrastructure spend and cash
investment in Press Support were financed by cash generated from operations and
a R22,4 million increase in interest-bearing borrowings.
As previously announced all tax losses have been utilised and the company is now
in a tax-paying position. Taxes of R17,9 million (2007: R2,2 million) were paid
during the year.
Property, plant and equipment includes land and buildings, mainly situated in
Pomona, Kempton Park and also in Pinetown, Durban. The properties were revalued
by independent valuers at year-end to R46,7 million, an increase of R15 million
year-on-year. They have been financed at favourable fixed rates over a 10 year
period and represent R13,9 million of the group`s interest-bearing borrowings at
year-end. The properties are accounted for at fair value and any improvements
are depreciated over 10-20 years.
Notwithstanding the growth in revenue, the group`s debtors days remain
satisfactory and in line with prior periods.
BEE dilution
As anticipated and previously announced, the full dilution resulting from the
group`s BEE transaction was incurred during the year at 11,7%, compared with
5,6% in the previous financial year.
Prospects
The outlook for the year to May 2009 remains positive.
The directors believe the company will post organic growth, even in the face of
current economic conditions (see `Review of operations` above). Proven
sustainability during downturns in markets and the economy, established
infrastructure, experienced management and exciting growth initiatives should
help to achieve this. A focus on highly competitive offerings to growth niche
markets is a key strength.
In addition the directors believe that the present market conditions could yield
attractive acquisition opportunities to extend the group`s offering in current
areas of focus and to potentially expand into related growth niche markets.
OneLogix will therefore continue to investigate further earnings-enhancing
acquisition opportunities.
People
As previously announced on 13 February 2008 a number of changes were effected to
the board of OneLogix. Cameron McCulloch, former CFO of OneLogix, was promoted
to the newly-created position of COO and Geoff Glass was in turn appointed as
the new CFO with effect 1 March 2008. These appointments are proving beneficial
for the group. We are also satisfied that the OneLogix businesses are
continually enhancing their existing strong management teams and staff in order
to deliver on strategic and operational objectives.
We thank our management, employees, business partners, customers, suppliers,
business advisors and shareholders for their continued and invaluable support.
By order of the board
Ian Lourens (CEO) Geoff Glass (CFO)
20 August 2008
Directors:
SM Pityana (Chairman)*, NJ Bester, AC Brooking*, GM Glass (CFO), AJ Grant*#, IK
Lourens (CEO), T Matshazi*, CV McCulloch (COO), JG Modibane*#
* Non-executive director # Independent director
Registered office:
46 Tulbagh Road, Pomona, Kempton Park
(P O Box 85392, Emmarentia, 2029)
Company Secretary:
Probity Business Services (Proprietary) Limited,
Third Floor, JHI House,
11 Cradock Avenue, Rosebank, 2196
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(P O Box 61051, Marshalltown, 2107)
Investor relations:
Envisage Investor & Corporate Relations
Designated advisor
Java Capital (Proprietary) Limited
Date: 20/08/2008 09:00:01 Produced by the JSE SENS Department.
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