| Tue 24 Aug 2010, 10:55 | | OLG - OneLogix Group Limited - Audited condensed financial results |
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OLG
OLG
OLG - OneLogix Group Limited - Audited condensed financial results
for the year ended 31 May 2010
OneLogix Group Limited
(Registration number 1998/004519/06)
Share Code: OLG ISIN Code: ZAE000026399
("OneLogix" or "the company" or "the group")
AUDITED CONDENSED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MAY 2010
Highlights
- Revenue from continuing operations up 21%
- HEPS up 27%
- HEPS from continuing operations up 44%
- Cash resources up 120% to R60,2 million
- NAV up 19%
- NTAV up 53%
- Final capital distribution of 3 cents per share
- Capital distribution for the year of 6 cents per share
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
31 May 2010 31 May 2009
% R`000 R`000
Continuing operations
Revenue 21 496 769 410 118
Operating and administration costs 19 (411 256) (345 352)
Earnings before interest, taxation, 32 85 513 64 766
depreciation and amortisation (EBITDA)
Depreciation and amortisation 37 (33 699) (24 603)
Impairment of intangible assets (100) - (1 698)
Operating profit 35 51 814 38 465
Finance income 2 701 687
Finance costs (27) (9 798) (13 402)
Profit before taxation 66 42 717 25 750
Taxation 53 (12 366) (8 064)
Profit from continuing operations 72 30 351 17 686
Profit for the year from discontinued 76 12 272 6 983
operations
Net profit and comprehensive income for 73 42 623 24 669
the period
Net profit and comprehensive income
attributable to:
- Minority interest 85 7 912 4 278
- Equity holders of the company 70 34 711 20 391
Net profit and comprehensive income 73 42 623 24 669
Number of shares in issue (`000):
- Total 210 131 210 131
- Weighted 210 131 210 131
- Diluted 210 131 210 131
Basic and headline earnings per share
(cents)
Basic and diluted basic earnings per 70 16,5 9,7
share (cents)
Headline and diluted headline earnings 27 13,0 10,2
per share (cents)
Continuing operations:
Basic and diluted basic earnings per 53 11,8 7,7
share (cents)
Headline and diluted headline earnings 44 11,8 8,2
per share (cents)
Discontinuing operations:
Basic and diluted basic earnings per 135 4,7 2,0
share (cents)
Headline and diluted headline earnings (40) 1,2 2,0
per share (cents)
Reconciliation between basic and
headline earnings
Basic earnings 34 711 20 391
Profit on disposal of property, plant (29) (120)
and equipment less taxation and
minorities
Impairment of intangible assets less - 1 148
taxation and minorities
Profit on disposal of discontinued (7 442) -
operation less taxation and minorities
Headline earnings 27 240 21 419
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
Year ended Year ended
31 May 2010 31 May 2009
% R`000 R`000
Net cash generated from operations 65 518 73 665
Continuing operations (10) 59 277 65 903
Discontinuing operations (20) 6 241 7 762
Net cash flows from investing (18 326) (58 185)
activities
Continuing operations (19) (46 588) (57 282)
Discontinuing operations (3 28 262 (903)
228)
Net cash flows from financing (14 358) 2 918
activities
Continuing operations (614) (14 715) 2 863
Discontinuing operations 554 357 55
Net increase in cash resources 32 834 18 398
Cash resources at beginning of year 27 399 9 001
Cash resources at end of year 60 233 27 399
The group has authorised capital
expenditure over the next year of R73,9
million. R32,3 million is already
committed.
Commitments
Operating lease commitments (not 8 715 15 490
exceeding five years)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
At At
31 May 2010 31 May 2009
% R`000 R`000
ASSETS
Non-current assets 258 119 270 175
Property, plant and equipment 217 682 213 406
Intangible assets 33 550 56 370
Interest in associate - 120
Loans and receivables 6 887 279
Current assets 160 853 100 044
Inventories 9 525 5 044
Trade and other receivables 88 866 67 601
Taxation 2 229 -
Cash resources 60 233 27 399
Total assets 418 972 370 219
EQUITY AND LIABILITIES
Equity 201 316 168 210
Ordinary shareholders` funds 181 889 153 482
Minority interests 19 427 14 728
Liabilities
Non-current liabilities 83 390 87 550
Interest-bearing borrowings 61 208 68 042
Deferred tax 20 196 18 605
Share-based compensation liability 1 986 903
Current liabilities 134 266 114 459
Trade and other payables 86 330 69 037
Interest-bearing borrowings 46 506 44 118
Taxation 1 430 1 304
Total equity and liabilities 418 972 370 219
Net asset value per share (cents) 86,6 73,0
Net tangible asset value per share 70,6 46,2
(cents)
SEGMENTAL ANALYSIS
Revenue
Automotive and abnormal 23 441 041 359 486
Retail 6 30 585 28 758
Media 15 25 143 21 874
Continuing operations 21 496 769 410 118
Discontinued operations (65) 56 206 158 764
(3) 552 975 568 882
Operating profit
Automotive and abnormal 12 51 980 46 206
Retail 23 11 780 9 570
Media (102) 129 (5 552)
Corporate 3 (12 075) (11 759)
Continuing operations 35 51 814 38 465
Discontinued operations (60) 3 878 9 618
16 55 692 48 083
Total assets
Automotive and abnormal 14 350 639 307 551
Retail 98 16 767 8 489
Media 115 8 336 3 877
Corporate (3 43 230 (1 308)
405)
Continuing operations 32 418 972 318 609
Discontinued operations (100) - 51 610
13 418 972 370 219
Total liabilities
Automotive and abnormal 13 161 051 142 060
Retail 22 7 568 6 215
Media 189 11 505 3 975
Corporate 10 15 906 14 398
Continuing operations 18 196 030 166 648
Discontinued operations (100) - 15 452
Unallocted: Taxation and deferred 9 21 626 19 909
taxation
8 217 656 202 009
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Revalua-
Share Share Retained tion
capital premium income reserve
R`000 R`000 R`000 R`000
At 1 June 2008 - audited 2 101 47 400 73 354 10 184
Dividends declared in - - - -
subsidiaries
Comprehensive income - - 20 391 -
At 31 May 2009 - audited 2 101 47 400 93 745 10 184
Dividends declared in - - - -
subsidiaries
Dividends declared in - - - -
discontinued operations
Capital distribution - (6 304) - -
Minority interests purchased - - - -
Minority interest disposed - - - -
Comprehensive income - - 34 711 -
At 31 May 2010 - audited 2 101 41 096 128 456 10 184
Other Minority
reserves interests Total
R`000 R`000 R`000
At 1 June 2008 - audited 52 12 361 145 452
Dividends declared in - (1 911) (1 911)
subsidiaries
Comprehensive income - 4 278 24 669
At 31 May 2009 - audited 52 14 728 168 210
Dividends declared in - (1 300) (1 300)
subsidiaries
Dividends declared in - (1 709) (1 709)
discontinued operations
Capital distribution - - (6 304)
Minority interests purchased - (75) (75)
Minority interest disposed - (129) (129)
Comprehensive income - 7 912 42 623
At 31 May 2010 - audited 52 19 427 201 316
COMMENTS
The directors of OneLogix are pleased to present the consolidated
audited annual financial results for the year ended 31 May 2010
("the year"), which reflect a solid performance with the group
emerging from the recession having successfully defended its
various market positions.
Basis of presentation
The accounting policies and method of measurement and recognition
applied in the preparation of the consolidated audited financial
statements are consistent with those applied in the audited
financial statements for the previous year ended 31 May 2009.
The condensed consolidated audited annual financial statements have
been prepared in accordance with International Financial Reporting
Standards ("IFRS"), the AC 500 Standards, International Accounting
Standards ("IAS") 34 and the requirements of the Companies Act (Act
16 of 1973).
The consolidated audited annual financial results have been audited
by PricewaterhouseCoopers Inc. and their unqualified audit opinion
is available for inspection at the registered offices of OneLogix.
Accounting policies
The following new Standards and amendments to Standards are
mandatory for the first time for the financial year beginning 1
June 2009:
- IAS 1 (revised), `Presentation of financial statements`: The
revised Standard prohibits the presentation of items of income and
expenses (that is `non-owner changes in equity`) in the statement
of changes in equity, requiring `non-owner changes in equity` to be
presented separately from owner changes in equity. All `non-owner
changes in equity` are required to be shown in a performance
statement.
Entities can choose whether to present one performance statement
(the statement of comprehensive income) or two statements (the
income statement and statement of comprehensive income).
The group has elected to present one statement of comprehensive
income. The audited condensed consolidated annual financial
statements have been prepared under the revised disclosure
requirements.
- IFRS 8, `Operating segments`: IFRS 8 replaces IAS 14, `Segment
reporting`. It requires a `management approach` under which segment
information is presented on the same basis as that used for
internal reporting purposes. This has resulted in an increase in
the number of reportable segments presented, as the previously
reported Logistics segment has been split into two segments namely
"Automotive and Abnormal" and "Media". The previously reported
"Services" segment has been renamed "Retail".
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker has been identified as the
executive committee.
Goodwill is allocated by management to groups of cash-generating
units on a segment level. The change in operating segments has not
resulted in any additional goodwill impairment. Comparatives for
the prior periods have been restated.
Review of operations
Notwithstanding the cyclical nature of many of the OneLogix
businesses the group`s strong management capability ensured growth
for the year. OneLogix is for the first time positioned to benefit
from both a substantial cash surplus as well as an established,
solid management team, which should position the group for further
growth.
Vehicle Delivery Services ("VDS") improved its performance in line
with market growth and enhanced its strong position within the
local and cross-border vehicle logistics market. The increased
market share gained during the recession as a result of industry
consolidation has increased earnings and revenue in the second half
of the year. VDS continues to be the major driver of group revenue
and profitability.
Commercial Vehicle Delivery Services ("VDS") has encouragingly
broadened and consolidated its customer base within the commercial
vehicle logistics market.
Contributing to earnings for the first time RFB Logistics ("RFB")
delivered results ahead of expectations. It has an established and
successful track record in providing transport solutions throughout
Southern Africa, with a particular focus on the niche abnormal load
market.
Atlas Panelbeaters contributed to group earnings for the first time
in January 2010. This acquisition has been profitable from the
onset and has exceeded expectations.
PostNet, a well respected and established franchised chain of 227
business service outlets servicing the SME market, again performed
well despite a sluggish retail market.
Magscene showed an improved performance within its specialist niche
market. The business has returned to profitability following the
successful resolution of operational and administrative issues.
Acquisitions
As previously announced on 3 December 2009 OneLogix acquired Atlas
Panelbeaters, a business specialising in larger commercial
vehicles. The acquisition is a further move to develop niche
offerings and boost revenue and will result in further integration
and cost savings. Contribution to earnings commenced from January
2010 adding R20,1 million to revenue and R1 million profit after
tax. The group believes the new business offers a number of
promising opportunities.
The assets and liabilities arising from the acquisition are as
follows:
R`000
Fair value
Property 5 400
Plant and equipment 2 703
Inventories 1 897
Goodwill 25
Net identifiable assets acquired 10 025
Cash flow on acquisition (5 425)
Purchase funded by vendor liability (4 600)
Total funding (10 025)
As previously announced on 12 May 2010 OneLogix, which holds 60% of
the shares in Magscene, acquired a further 20% shareholding in
Magscene from David Ralph for a total of R1,5 million. This
acquisition, which is unconditional and effective 31 May 2010,
serves to simplify shareholder relationships.
Discontinued operations
As previously announced on 21 August 2009 OneLogix disposed of its
interests in the 4Logix and Gijima Supply Chain Management Services
(Proprietary) Limited businesses with effect from 1 June 2009.
The disposal reflects the board`s view that the relatively high
revenue, low margin nature of these businesses, which provide
logistics solutions for the rail of bulk commodities, no longer
align with group strategy.
As previously announced on 12 May 2010 OneLogix sold the following
to Media24 Limited with effect from 30 April 2010:
- all the issued shares in Press Support (Proprietary) Limited;
- its Media Express division; and
- its 26% shareholding in Internet Express (Proprietary)
Limited.
The group believes the disposal is opportune as an exit from the
major part of its newspaper and magazine distribution operations as
OneLogix is not well-placed to continue to grow these operations.
As a result of the disposal OneLogix management is now able to
focus more closely on the larger businesses within the group. The
proceeds of the disposal, after funding the acquisition and share
repurchase referred to below, will reduce gearing pending
evaluation of acquisition opportunities.
Financial information relating to the discontinued operations for
the year to the date of disposal is set out below. The statement of
comprehensive income and the cash flow statement distinguish
discontinued operations from continuing operations. Comparative
figures have been restated.
Statement of comprehensive income relating to discontinued
operations:
Year ended Year ended
31 May 2010 31 May 2009
R`000 R`000
Revenue 56 206 158 764
Operating and administration costs (49 135) (145 817)
Earnings before interest, taxation, 7 071 12 947
depreciation and amortisation (EBITDA)
Depreciation and amortisation (3 193) (3 329)
Operating profit 3 878 9 618
Net finance income 485 386
Share of associate income 25 4
Profit before taxation 4 388 10 008
Taxation (1 542) (3 025)
Profit for the year from discontinued 2 846 6 983
operations
Profit on sale of discontinued operations 9 426 -
Total profit on sale of discontinued 12 272 6 983
operations
Specific share repurchase
OneLogix has agreed to repurchase eight million shares in OneLogix
from related parties, being Jeremy Eaton (the managing director of
Press Support and a director of OneLogix (Proprietary) Limited
until his resignation on implementation of the disposal) and The
Eaton Family Trust, at a price of R0,85 per share plus interest at
prime less 3%. The provisions of the Companies Act, 1973 and the
JSE Listings Requirements have been met and the repurchase is being
implemented.
Financial results
Revenue from continuing operations increased by 21% to R496,8
million from R410,1 million for the previous comparative period
ended 31 May 2009. Notwithstanding the overall increase, the
downturn in the vehicle delivery market was to a large degree
successfully offset by revenue derived from the newly-acquired RFB.
In line with the increase in revenue EBITDA improved from R64,8
million to R85,5 million. With a net interest expense of R9,1
million, this still equates to a satisfactory interest cover of 9,4
times.
Operating profit, representing 10,4% (May 2009: 9,4%) of revenue,
increased by 35% from R38,5 million to R51,8 million. The increase
is attributable to a recovery in fixed costs within the group due
to higher revenues. The fleet is currently fully operational and is
being utilised across the group`s businesses.
Due to the comparatively lower lending rates in the interim period,
net finance costs decreased by 28% from R12,7 million to R9,1
million. This further boosted net profit before taxation by 66%
from R25,8 million to R42,7 million.
Headline earnings per share ("HEPS") increased 27% from 10,2 cents
to 13,0, cents. HEPS from continuing operations increased 44% from
8,2 cents to 11,8 cents.
Increased working capital requirements associated with a growth in
revenue generation since the previous year-end saw cash flow from
continuing operations decrease from R65,9 million to R59,3 million.
The group invested R39,3 million in continuing operations
infrastructure: R27,5 million for fleet; R3,3 million for IT
infrastructure; R7,6 million for property developments and R0,9
million for other assets. New interest-bearing borrowings of R46,9
million were raised during the period and were set off by
repayments of interest-bearing borrowings of R55,3 million.
Net proceeds raised on disposal of discontinued operations totalled
R30,8 million with the deferred payment of R5,5 million expected to
realise in September 2010 once the outstanding sale conditions have
been met. Net proceeds on disposal of tangible assets raised R5,8
million. Cash resources at balance sheet date increased by 120%
from R27,4 million to R60,2 million.
Capital distribution
Shareholders are advised that a final distribution, by way of a
capital reduction out of the share premium account, of 3,0 cents
per share (May 2009: Nil) has been declared. This takes the total
distribution for the year to 6,0 cents per share.
The salient dates in respect of the distribution 2010
are as follows:
Last day to trade cum distribution on Friday, 10 September
Shares will trade ex distribution from Monday, 13 September
Record date Friday, 17 September
Payment of distribution Monday, 20 September
Shareholders may not dematerialise or rematerialise their shares
between Monday, 13 September 2010 and Monday, 20 September 2010,
both dates inclusive.
OneLogix will continue to assess the payment of interim and final
dividends in light of the board`s ongoing assessment of earnings,
after providing for long-term growth and cash/debt resources, the
amount of reserves available using going concern assessment and
covenants of banking facilities providers.
Prospects
Underpinned by the group`s proven market positions, superior
customer service and strong business processes and supported by a
skilled and motivated management team the directors believe the
group businesses will continue to perform well into the next year.
OneLogix will also continue to explore acquisitive opportunities
during the current year. In accordance with the group`s strategy
possible acquisitions will be in aligned niche markets.
People
We remain satisfied that the strong management teams and staff,
undergoing continual training and skills development, are well
equipped 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 Geoff Glass
CEO Financial Director
24 August 2010
Directors:
SM Pityana (Chairman)*
NJ Bester
AC Brooking*
GM Glass (FD)
AJ Grant*#
IK Lourens (CEO)
T Matshazi*
CV McCulloch (COO)
JG Modibane*#
*Non-executive
#Independent
Registered office:
46 Tulbagh Road, Pomona, Kempton Park
(Postnet Suite 10, Private Bag X27, Kempton Park, 1620)
Company Secretary:
Probity Business Services (Pty) Limited
Third Floor, The Mall Offices, 11 Cradock Avenue, Rosebank, 2196
Transfer secretaries:
Computershare Investor Services (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Designated advisor
Java Capital
Date: 24/08/2010 10:55:01 Produced by the JSE SENS Department.
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