| Mon 1 Sep 2008, 17:15 | | MFL - Metrofile Holdings - Audited Group Results For The Year Ended 30 June 2008 |
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MFL
MFL
MFL - Metrofile Holdings - Audited Group Results For The Year Ended 30 June 2008
METROFILE HOLDINGS LIMITED
("Metrofile Holdings" or "the company" or "the group")
(Incorporated in the Republic of South Africa)
(Registration number: 1983/012697/06)
Share code: MFL
ISIN: ZAE000061727
METROFILE
Audited group results for the year ended 30 June 2008
- HIGHLIGHTS
- Revenue up 10,1%
- Normalised HEPS up 18,9%
- Cash generated from operations up 37,5%
CONDENSED CONSOLIDATED INCOME STATEMENT
Audited Audited
12 months 12 months
ended ended
R`000 Notes 30 June 2008 30 June 2007
Revenue 329 935 299 740
Operating income before 106 291 101 818
interest, taxation and
depreciation (EBITDA)
Depreciation (10 752) (10 894)
Operating profit before
finance costs and
exceptional items 95 539 90 924
Net finance costs (22 638) (44 838)
Finance income 5 138 2 709
Fair value adjustments on 4 780 3 892
financial instruments
Finance costs 1 (44 832) (51 439)
Once-off reversal of finance 12 276
cost provision
Exceptional items 2 368 1 486
Profit before taxation 75 269 47 572
Taxation 2 (15 956) (8 362)
Profit for the year 59 313 39 210
Attributable to:
Equity holders of the parent 59 313 35 261
Minority interest 3 949
Attributable profit 59 313 39 210
Earnings per ordinary share
Earnings per ordinary share 15,1 14,0
(cents)
Further information
Number of ordinary shares in 393 997 393 997
issue (thousands)
Weighted average number of 393 997 252 337
ordinary shares in issue
(thousands)
CONDENSED CONSOLIDATED BALANCE SHEET
Audited Audited
12 months 12 months
as at as at
R`000 Notes 30 June 2008 30 June 2007
ASSETS
Non-current assets
Property, plant and equipment 205 559 174 708
Goodwill 3 160 499 160 499
Deferred tax asset 111
Current assets 104 156 109 395
Inventories 10 502 12 034
Trade receivables 48 335 46 640
Other receivables 4 881 3 749
Financial instruments - fair 11 621 6 841
value of interest rate swaps
Bank balances 28 817 40 131
Total assets 470 325 444 602
EQUITY AND LIABILITIES
Equity capital and reserves
Equity attributable to equity
holders of
the parent 129 396 70 083
Non-current liabilities 267 648 312 996
Interest-bearing provisions 4 11 669
Interest-bearing liabilities 5 257 342 292 666
Deferred taxation liability 10 306 8 661
Current liabilities 73 281 61 523
Trade payables 8 471 10 580
Other payables 22 254 14 883
Deferred revenue 4 186 4 028
Provisions 4 693 4 829
Taxation 4 347 5 583
Interest-bearing liabilities 5 29 330 21 620
Total equity and liabilities 470 325 444 602
Net asset per ordinary share 32,8 17,8
(cents)
NOTES
1. The finance costs for the year include R0,9 milion of interest provisions
relating to potential claims which were reversed during the second half of the
financial year.
2. The low taxation charge for 2008 was a result of R12 million interest
reversal and a R5 million profit not taxed due to a deferred tax asset not
previously raised; the 2007 year was the result of reversing a provision of R6
million which was no longer required.
3. Goodwill arose from the acquisition of the 35% minority shareholding in
Metrofile (Pty) Limited.
4. In 2007 long-term interest-bearing provisions include anticipated claims
related to certain dormant subsidiaries from the old "MGX" Group.
5. Long-term interest-bearing liabilities include the Metrofile Senior and
Mezzanine loans. Short-term interest-bearing liabilites include the portions of
the Metrofile Senior and Mezzanine loans payable in one year. All borrowings are
JIBAR linked and are approximately 84% hedged by way of the interest rate swaps.
6. No segmental analysis has been reported as the group traded in only one
segment and only in Southern Africa.
7. All the assets have been pledged as security against certain loans to the
group.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Audited Audited
12 months 12 months
ended ended
R`000 30 June 2008 30 June 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations before 107 120 102 734
net working capital changes
Decrease/(increase) in net working 3 989 (21 944)
capital
Cash generated from operations 111 109 80 790
Net finance costs paid (39 694) (48 730)
Normal taxation paid - current year (15 926) (15 890)
Normal taxation paid - prior year (17 344)
Net cash inflow/(outflow) from 55 489 (1 174)
operating activities
Net cash outflow from investing (39 189) (19 980)
activities
Net cash inflow/(outflow) from
financing activities
Net cash inflow from rights issue 138 500
Loans repaid (27 614) (321 670)
Loans raised 5 656
Proceeds from new financing facilities 320 000
Convertible loan notes repaid (95 096)
Net (decrease)/increase in cash and (11 314) 26 236
cash equivalents
Cash and cash equivalents at the 40 131 13 895
beginning of the year
Cash and cash equivalents at the end of 28 817 40 131
the year
Represented by:
Bank balances 28 817 40 131
STATEMENT OF CHANGES IN EQUITY
Accu-
Share Share mulated
capital premium losses
R`000 R`000 R`000
Balance at 1 July 2006 408 195 656 (473 497)
Attributable profit 35 261
Rights offer 1 163 134 343
Minority acquisition 850 172 905
Profit on sale of nil paid 2 994
letters
Balance at 30 June 2007 2 421 502 904 (435 242)
Attributable profit 59 313
Balance at 30 June 2008 2 421 502 904 (375 929)
STATEMENT OF CHANGES IN EQUITY
Attribut-
able to Minority
equity share-
holders of holder
the parent interest Total
R`000 R`000 R`000
Balance at 1 July 2006 (277 433) 12 162 (265 271)
Attributable profit 35 261 3 949 39 210
Rights offer 135 506 135 506
Minority acquisition 173 755 (16 111) 157 644
Profit on sale of nil paid 2 994 2 994
letters
Balance at 30 June 2007 70 083 70 083
Attributable profit 59 313 59 313
Balance at 30 June 2008 129 396 129 396
RECONCILIATION OF HEADLINE EARNINGS
Audited Audited
12 months 12 months
ended ended
R`000 30 June 2008 30 June 2007
Profit to ordinary shareholders 59 313 35 261
Capital profit on disposal of investments (2 368) (38)
Negative goodwill on acquisition of (480)
investments
(Profit)/loss on sale of plant and (46) 225
equipment
Headline earnings 56 899 34 968
Headline earning per ordinary share 14,4 13,9
(cents)
COMMENTARY ON RESULTS
METROFILE HOLDINGS PROFILE
Established 25 years ago, Metrofile continues to lead the South African market
in on- and off-site records management and information storage. Enjoying an
enviable reputation for reliability, commitment and the quality of its services,
Metrofile remains the only supplier capable of providing customers across the
full spectrum of the economy with an end to end solution.
Metrofile`s extensive range of services enables companies and organisations to
use, store and recycle their records and information quickly, intelligently and
cost-effectively - freeing up valuable physical and human resources. Our
services include records management, back-up management, image processing, paper
management and recycling, and an extensive range of information solutions
including the supply and maintenance of scanning and document handling
equipment, software development, consultancy and training.
Metrofile Holdings is quoted in the "Support Services - Business Support
Services" sector of the JSE Limited (JSE).
OVERVIEW
The past year has seen Metrofile focus on the creation of capacity both from a
physical infrastructure aspect as well as in the areas of marketing and human
resourcing. This will entrench our position as market leader and will ensure
that the group has the capacity and capability to meet the product and service
demands of customers affected by increasing regulation and corporate governance
requirements. Metrofile also has a clear strategy to move into Africa and to
provide companies operating in these countries with the full range of our
services. The first of these, Metrofile Mozambique, opened in Maputo during the
financial year and has already secured a number of significant customers.
Minimal capital was outlaid with the premises being leased.
FINANCIAL REVIEW
Results for the year were pleasing with revenue increasing by 10% to R329,9
million and attributable profit increasing by 51,3% to R59,3 million. Headline
earnings per share "HEPS" was 14,4 cents (2007: 13,9 cents).
Shareholders should be aware that the 2008 and 2007 results were stated after
accounting for a number of once-off items and 2007 HEPS was also affected by the
weighted average number of shares issued during the period. To assist
shareholders, it has been calculated that if the refinancing and issue of new
shares had taken place on 1 July 2006, and if there had been no exceptional
items, capital gains, reversal of tax provisions or interest provisions for
claims still unresolved in 2008 and 2007, then normalised HEPS on the full
number of shares now in issue would have been 11,3 cents for the year ended 30
June 2008 (2007: 9,5 cents).
Although the group remains highly geared, interest cover has now increased to
three times. Cash generated by operations is high and the group is in compliance
with all its bank covenants. Current projections indicate that the group will
continue to meet the payment schedules in the six year refinancing agreements
concluded in 2006.
Metrofile has chosen to continue to account for the property portfolio on a cost
basis. However, it should be noted that valuations have been performed on an
open market basis and indicate that the fair value of the properties are R78,7
million higher than reflected in the balance sheet.
NEW STORAGE CAPACITY
Additional facilities for new storage capacity were commissioned during and
subsequent to the year-end. R20,8 million was outlaid in 2007/2008 and R36,5
million is planned for 2008/2009. The new facilities planned for 2008/2009 will
add 25% to the group`s storage capacity with the capital expenditure being
financed from the group`s cash resources and from some new special purpose
borrowings.
ACCOUNTING POLICIES
This condensed report complies with IAS 34: Interim Financial Reporting. The
financial statements from which these condensed financial results have been
derived are prepared in accordance with International Financial Reporting
Standards of the South African Companies Act and the Listing Requirements of the
JSE. The accounting policies are consistent with those applied in the 30 June
2007 annual financial statements except for IFRS 7: Financial Instruments:
Disclosure.
RELATED PARTIES
There have been no changes to the arm`s length consulting agreement with
Mineworkers Investment Company (MIC) since the previous financial year. In terms
of the agreement fees of R0,75 million (2007: R0,6 million) were paid to MIC
during the year under review.
AUDITORS` REPORT
These condensed group financial results are derived from the consolidated annual
financial statements which have been audited by Deloitte & Touche and their
unmodified audit report is available for inspection at the registered office of
the company.
DIRECTORATE AND CORPORATE GOVERNANCE
Ms Ndumi Medupe was appointed to the board of directors on 1 February 2008. The
board currently comprises two executive and six non-executive directors.
DIVIDENDS
No dividends have been declared for the current year. It is not the company`s
intention to declare or pay dividends in the foreseeable future.
CONTINGENT LIABILITIES
During the previous financial year a number of the group`s employees embarked on
an illegal strike. Although the CCMA ruled in favour of Metrofile, the matter
remains unresolved with the employees having lodged an appeal. The matter was
scheduled to be heard by the labour court during March 2008, however, the
hearing did not go ahead and the company is waiting to hear what further action
will be taken by the applicants.
We are very pleased to advise shareholders that the remaining contingent
liabilities arising from the old MGX group have all been eliminated, and that
the interest-bearing provisions carried in prior years have been reversed
without cost to the group.
COMMITMENTS
- Operating lease commitments of R13,5 million for the next five years.
- Metrofile (Pty) Limited has planned capital expansions of R50,6 million and
replacement projects of R10,5 million, of which R27,4 million has been
authorised and committed and R33,7 million authorised but not committed.
POST-BALANCE SHEET EVENTS
No events material to the understanding of the report have occurred in the
period between the year-end date and the date of this report.
PROSPECTS
The slowdown in the economy is not expected to have any material effect on the
group`s prospects. Accordingly, Metrofile expects satisfactory growth in revenue
and EBITDA in the year ahead. However, net interest costs will increase due to
the capital expansionary programme and there will be a time lag between the
completion of the new facilities and the generation of additional revenue.
Christopher Seabrooke Graham Wackrill
Non-executive Chairman Chief Executive Officer
1 September 2008
Cleveland, Gauteng
Registered office: 3 Gowie Road, The Gables, Cleveland, Johannesburg
Directors: CS Seabrooke*(Chairman), GD Wackrill (CEO), RM Buttle (CFO),
K Pillay*, SR Midlane*, IN Matthews*, N Medupe*, P Nkuna*
*Non-executive
Company Secretary: LM Thompson
Sponsor
Standard Bank
Transfer secretaries
Computershare Investor Services (Proprietary) Limited 70 Marshall Street,
Johannesburg, 2001
Date: 01/09/2008 17:15:02 Produced by the JSE SENS Department.
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