| Wed 31 Aug 2011, 7:07 | | MFL - Metrofile Holdings Limited - Audited group results for the year ended |
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MFL
MFL
MFL - Metrofile Holdings Limited - Audited group results for the year ended
30 June 2011
METROFILE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1983/012697/06)
Share code: MFL
ISIN: ZAE000061727
("Metrofile" or "the company" or "the group")
Audited group results for the year ended 30 June 2011
- Revenue up 12,4%
- EBITDA up 15,6%
- Cash generated from operations up 15,1%
- Normalised HEPS up 24,0%
- Maiden dividends per share for the year of 4,5 cents
Condensed income statement
Audited Audited
12 months 12 months
ended ended
R`000 Note 30 June 2011 30 June 2010
Revenue 460 552 409 563
Earnings before interest, 146 200 126 434
taxation and depreciation and
amortisations (EBITDA)
Depreciation (19 076) (14 792)
Operating profit before 127 124 111 642
finance costs
Net finance costs (23 642) (34 953)
Finance income 1 588 380
Finance costs (25 230) (35 333)
Profit before taxation 103 482 76 689
Taxation (29 541) (23 433)
Profit for the year 73 941 53 256
Attributable to:
Owners of the parent 73 874 52 945
Non-controlling interests 67 311
Attributable profit 73 941 53 256
Further information
Number of ordinary shares in 408 085 408 085
issue (thousands)
Weighted average number of 408 085 403 868
ordinary shares in issue
(thousands)
Earnings per ordinary share
Earnings per ordinary share 18,1 13,1
(cents)
Headline earnings per ordinary
share
Headline earnings per ordinary 18,1 13,1
share (cents)
Normalised headline earnings
per ordinary share
Normalised headline earnings 18,1 14,6
per ordinary share (cents)
Dividend per ordinary share
Interim dividend per ordinary 2,0 -
share - paid (cents)
Final dividend per ordinary 2,5 -
share - proposed (cents)
Condensed statement of comprehensive income
Audited Audited
12 months 12 months
ended ended
R`000 Note 30 June 2011 30 June 2010
Profit for the year 73 941 53 256
Other comprehensive income for 103 (1 184)
the year net of tax
Hedge accounting for fair 1 (542) (1 041)
value on interest rate swaps
Currency movement on 645 (143)
translation of foreign
subsidiary
Total comprehensive income for 74 044 52 072
the year
Attributable to:
Owners of the parent 73 731 51 761
Non-controlling interests 313 311
Condensed statement of financial position
Audited Audited
as at as at
R`000 Note 30 June 2011 30 June 2010
ASSETS
Non-current assets 485 572 460 004
Property, plant and equipment 313 094 286 466
Goodwill 169 943 169 943
Deferred tax asset 2 535 3 595
Current assets 120 834 86 463
Inventories 12 343 10 221
Trade receivables 66 144 58 909
Other receivables 4 637 3 542
Bank balances 37 710 13 791
Total assets 606 406 546 467
EQUITY AND LIABILITIES
Equity and reserves 310 443 242 259
Equity attributable to owners 308 800 240 929
of the parent
Non-controlling interests 1 643 1 330
Non-current liabilities 208 154 228 476
Interest-bearing liabilities 2 198 734 221 784
Deferred taxation liability 9 420 6 692
Current liabilities 87 809 75 732
Trade and other payables 49 710 40 726
Deferred revenue 10 000 7 065
Bank overdraft 129 -
Provisions 1 779 1 683
Taxation 515 3 992
Interest-bearing liabilities 2 25 676 22 266
Total equity and liabilities 606 406 546 467
Net asset value per ordinary 75,7 59,0
share (cents)
Notes:
1. During April 2010 the existing interest rate swaps, which were due to expire
in March 2011, were closed out and new swaps were entered into in order to align
to the new debt package. The new swaps comply with hedge accounting requirements
and, as a result all movements, are accounted for directly through other
comprehensive income.
2. Long-term interest-bearing liabilities include the Metrofile (Pty) Limited
amortising and bullet loans which have a remaing five-year tenor as well as
instalment sale agreements entered into by Cleardata (Pty) Limited ("Cleardata")
in order to finance mobile shredding units. Short-term interest-bearing
liabilities include the portions of the Metrofile (Pty) Limited amortising loan
and Cleardata instalment sale agreements payable within one year. (This amount
excludes any voluntary prepayments). The Metrofile (Pty) Limited borrowings are
JIBAR linked and were 80% hedged by way of the interest rate swaps at the year-
end (30 June 2010 - 76%), whilst the Cleardata borrowings are prime linked and
uncovered.
3. The majority of the group assets have been pledged as security against
certain loans to the group.
Condensed statement of cash flows
Audited Audited
12 months 12 months
ended ended
R`000 30 June 2011 30 June 2010
Cash generated from operations before net 149 365 127 412
working capital changes
Decrease in net working capital 810 3 051
Cash generated from operations 150 175 130 463
Net finance costs paid (23 642) (34 954)
Dividends declared (8 162) -
Normal taxation paid (29 229) (35 591)
Net cash inflow from operating activities 89 142 59 918
Net cash outflow from investing activities:
Investment in property, plant and equipment: (38 164) (32 044)
expansion
Investment in property, plant and equipment: (8 261) (8 326)
replacement
Proceeds on disposal of property, plant and 1 008 701
equipment
Acquisition of subsidiaries - (16 000)
Net cash outflow from financing activities:
Issue of shares in terms of vendor placements - (16 000)
Loans repaid (32 935) (30 821)
Loans raised 13 000 8 900
Net increase in cash and cash equivalents 23 790 (1 672)
Cash and cash equivalents at the beginning of 13 791 15 463
the year
Cash and cash equivalents at the end of the 37 581 13 791
year
Represented by:
Bank balances 37 710 13 791
Bank overdrafts (129)
Condensed statement of changes in equity
Accumu-
Share Share lated Other
R`000 capital premium losses reserves
Balance at 30 June 2009 2 421 502 904 (333 801) 222
Shares issued in terms of 87 15 913
vendor placements for
acquisitions
Minority portion of reserves
relating to acquisition of
subsidiary
IFRS 2: Equity reserve 1 422
relating to share schemes
Total comprehensive income 52 945 (1 184)
for the year ended 30 June
2010
Balance at 30 June 2010 2 508 518 817 (280 856) 460
IFRS 2: Equity reserve 2 302
relating to share schemes
Dividends declared and paid (8 162)
Total comprehensive income 73 874 (143)
for the year ended 30 June
2011
Balance at 30 June 2011 2 508 518 817 (215 144) 2 619
Total
equity
before
minority Non-
apportion- controlling
R`000 ment interest Total
Balance at 30 June 2009 171 746 25 171 771
Shares issued in terms of 16 000 16 000
vendor placements for
acquisitions
Minority portion of reserves 994 994
relating to acquisition of
subsidiary
IFRS 2: Equity reserve 1 422 1 422
relating to share schemes
Total comprehensive income 51 761 311 52 072
for the year ended 30 June
2010
Balance at 30 June 2010 240 929 1 330 242 259
IFRS 2: Equity reserve 2 302 2 302
relating to share schemes
Dividends declared and paid (8 162) (8 162)
Total comprehensive income 73 731 313 74 044
for the year ended 30 June
2011
Balance at 30 June 2011 308 800 1 643 310 443
Reconciliation of headline earnings
Audited Audited
12 months 12 months
ended ended
R`000 30 June 2011 30 June 2010
Profit attributable to owners of the 73 874 52 945
parent
Profit on sale of plant and equipment (279) (152)
Tax effect of above items 78 43
Headline earnings 73 673 52 836
Headline earning per ordinary share 18,1 13,1
(cents)
Reconciliation of normalised headline earnings
Audited Audited
12 months 12 months
ended ended
R`000 30 June 2011 30 June 2010
Headline earnings 73 673 52 836
Non-recurring taxation - 773
Non-recurring finance charges - 6 614
Tax effect of above adjustments - (1 174)
Normalised headline earnings* 73 673 59 049
Normalised headline earnings per ordinary 18,1 14,6
share (cents)
* Normalised headline earnings are adjusted for non-trading items relating to
Financial instruments and legacy issues; these earnings represent the results of
the normal business operations and are included to give clarity to investors.
Condensed segmental information
Sales revenue EBITDA
Audited Audited Audited Audited
12 months 12 months 12 months 12 months
ended ended ended ended
R`000 30 June 2011 30 June 2010 30 June 2011 30 June 2010
Metrofile Records 366 874 325 753 98 847 84 900
Management
CSX Customer 70 270 70 146 7 040 6 597
Services
Property - - 34 867 32 372
Companies
Other 31 237 20 995 5 446 2 566
Inter-group (7 829) (7 331) - -
Total 460 552 409 563 146 200 126 435
Depreciation Operating profit before
interest
Audited Audited Audited Audited
12 months 12 months 12 months 12 months
ended ended ended ended
R`000 30 June 2011 30 June 2010 30 June 2011 30 June 2010
Metrofile Records (15 440) (13 572) 83 407 71 328
Management
CSX Customer (475) (226) 6 565 6 371
Services
Property - - 34 867 32 372
Companies
Other (3 161) (994) 2 285 1 571
Inter-group - - - -
Total (19 076) (14 792) 127 124 111 642
"Metrofile Records Management" represents the Metrofile document storage and
scanning divisions which are managed and operated geographically.
"Other" includes Metrofile Holdings Limited, Africa operations, the paper
management business and, with effect from 1 January 2010, Cleardata.
Commentary on results
Profile
Metrofile is the market leader in information and records storage management in
Africa and is represented in the six major provinces of South Africa, Mozambique
and, through the CSX brand, has contracts in numerous other African countries.
Metrofile operates from 26 facilities covering more than 73,000 square metres of
warehousing space and manages more than 21 billion records on behalf of its
customers.
Services include: Active Records Management, Image Processing, Hosting, Data
backup (both vault and online), Archive Storage & Management, File plan
development, Confidential Records Destruction, Paper Recycling as well the sale
and maintenance of a wide range of business equipment, including scanners,
library security systems, mailing and packaging machines.
Metrofile has been listed on the JSE Limited ("JSE") since 1995 and its ordinary
shares are quoted in the Support Services sector of the JSE. Its largest
shareholder is its empowerment partner, Mineworkers Investment Company (Pty)
Limited ("MIC") which owns 32,4% of Metrofile`s equity.
Strategy
Metrofile will continue to expand its services in the information management
sector with continued focus on cross-selling the group`s diverse range of
solutions and services to both new and existing customers. With legislative
changes, including the Consumer Protection Act, the New Companies Act (which has
amended the generic retention periods of documents from five to seven years) and
the proposed Protection of Personal Information Act, the group is well-
positioned to partner with its customers with regard to good record keeping,
legal compliance and risk mitigation.
Metrofile`s expansion into Africa, driven by the demand of existing customers,
has been slow due to the finalisation of partners and management`s strategy of
ensuring that the expansion will be at minimal risk to shareholders. Metrofile
has finalised terms with the G4S group as our partner with respect to a Nigerian
operation which is expected to trade with effect from October 2011 and the
expansion into other African countries will commence once the Nigerian business
is fully operational. G4S is the world`s leading security solutions group and is
listed on the London Stock Exchange.
Financial review
Revenue increased by 12,4% to R460,6 million and EBITDA by 15,6% to R146,2
million. Cash generation from operations of R150,2 million represents an 15,1%
growth on the comparative year. Reduced finance costs further add to the
increased profit after tax. Currently 80% of the group`s debt is covered by
interest rate swaps.
Headline earnings per share ("HEPS") increased by 38,2% to 18,1 cents (2010:
13,1 cents) while normalised HEPS increased by 24,0% to 18,1 cents (2010: 14,6
cents). Normalised HEPS are calculated after adjusting HEPS for non-recurring
items which impacted the comparative figures; it is expected that this is the
last year for which we will need to report normalised earnings for comparative
purposes.
Despite the high capex programme, overall gearing has continued to improve
leading to a debt/equity ratio of 72,7% (2010: 101,3%).
Metrofile continues to account for its property portfolio on a cost basis.
During the current reporting period, as part of the group`s capacity building,
the Pretoria facility was extended and purpose-built third party facilities were
occupied in Johannesburg and Bloemfontein.
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr RM Buttle
CA(SA), in accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS), including the information
required by IAS 34: Interim Financial Reporting, the AC 500 standards issued by
the Accounting Practices Board or its successor, and the Listings Requirements
of the JSE. The same accounting policies and methods of computation were applied
as in the prior year annual financial statements.
Certain accounting pronouncements became effective during the current financial
year, however these do not have an impact on either transactions or disclosures.
Audit opinion
The auditors, Deloitte & Touche, have issued their opinion on the group`s annual
financial statements for the year ended 30 June 2011. The audit was conducted in
accordance with International Standards on Auditing. They have issued an
unmodified audit opinion. These summarised provisional financial statements have
been derived from the group financial statements and are consistent in all
material respects with the group financial statements. A copy of their audit
report is available for inspection at the company`s registered office, and is
incorporated in the full annual financial statements.
Any reference to future financial performance included in this announcement has
not been reviewed or reported on by the company`s auditors.
Related parties
In terms of the consulting agreement with the MIC, fees of R0,84 million (2010:
R0,72 million) were paid during the year under review.
Directorate and corporate governance
Mrs Mary Bomela, CEO Designate of MIC, joined the Board in September 2010 as a
non-executive director and Mr Carl Coutts-Trotter was appointed as an alternate
non-executive director to Mr Christopher Seabrooke in April 2011. The Board
comprises two executive and seven non-executive directors, of whom four are
independent directors.
Dividends
The improvements in the group`s financial structure and cash flows have enabled
the Board to introduce a policy of paying interim and final dividends for the
first time. These will be calculated on a minimum of four times cover, with an
ultimate target of three times cover.
Notice is hereby given that a final cash dividend of 2,5 cents per share in
respect of the year ended 30 June 2011 has been declared payable to the holders
of ordinary shares recorded in the books of the company on Friday, 14 October
2011. The last day to trade cum-dividend will therefore be Friday, 7 October
2011 and Metrofile shares will trade ex-dividend from Monday, 10 October 2011.
Payment of the dividend will be made on Monday, 17 October 2011. Share
certificates may not be dematerialised or rematerialised between Monday, 10
October 2011 and Friday, 14 October 2011, both days inclusive.
Commitments and expansion
The group continues to monitor and optimise its balance of owned and leased
premises to ensure the continued availability of space to meet expansionary
demand relative to the cost of unutilised facilities. Owned premises comprises
50 000 square metres and leased premises 32 000 square metres at year-end. The
carrying value of fixed property was R179,9 million which had an approximate
market value of R287,9 million at year-end. Lease commitments over the next five
years amount to R38,0 million. Capex for 2012 is budgeted as R58,4 million of
which R49,9 million is for new capacity (2011 spend: R46,4 million of which
R38,2 million was for new capacity).
Post-balance sheet events
There have been no material post-balance sheet events.
Outlook
The partial recovery in the economy, the growing need for reliable and cost-
effective records management, the group`s unique capacity to handle volume
requirements in storage and access, the widening range of related services
offered (such as on-site confidential destruction) and the opportunities to
partner existing customers as the basis of expansion across Africa are all
factors in our optimism for continued future growth in earnings, dividends and
cash flows. Further, our pattern of growth continues to reflect the largely non-
cyclical nature of our primary business units.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
31 August 2011
Cleveland
Gauteng
Registered office:
3 Gowie Road, The Gables, Cleveland
Johannesburg
www.metrofile.com
Sponsor:
Standard Bank
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
Directors:
CS Seabrooke (Chairman)
AP Nkuna* (Deputy Chairman)
GD Wackrill (CEO)
RM Buttle (CFO)
MS Bomela*
CN Mapaure*
IN Matthews
N Medupe
SR Midlane
CP Coutts-Trotter+
*Non-executive
Independent
+Alternate to CS Seabrooke
Company Secretary:
LM Thompson
Date: 31/08/2011 07:06:59 Produced by the JSE SENS Department.
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