| Mon 20 Feb 2012, 7:38 | | OLG - OneLogix Group Limited - Unaudited condensed interim results for the six |
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OLG
OLG
OLG - OneLogix Group Limited - Unaudited condensed interim results for the six
months ended 30 November 2011
OneLogix Group Limited
(Registration number 1998/ 004519/06)
Share code: OLG ISIN: ZAE 000026399
("OneLogix" or "the company" or "the group")
UNAUDITED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2011
HIGHLIGHTS
- Revenue up 30%
- Operating profit (excluding items of a capital nature) up 23%
- Total comprehensive income up 35%
- HEPS up 18%
- NTAV up 25%
- Distribution of 4,5 cents per share
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 November 30 November 31 May
2011 2010 2011
% R`000 R`000 R`000
Continuing operations
Revenue 30 449 780 346 320 701 710
Operating and administration 32 (379 813) (287 793) (588 719)
costs
Depreciation and 12 (21 111) (18 825) (38 911)
amortisation
Profit on disposal of 6 108 114 50
property, plant and
equipment
Operating profit 38 54 964 39 816 74 130
Finance income 21 1 405 1 165 2 519
Finance costs 57 (5 463) (3 487) (6 958)
Profit before taxation 36 50 906 37 494 69 691
Taxation 39 (14 815) (10 639) (19 502)
Profit for the period 34 36 091 26 855 50 189
Other comprehensive income
Revaluation of land and - - 1 300
buildings
Movement in foreign currency 115 (18) (38)
translation reserve
Income tax relating to - - (182)
components of other
comprehensive income
Total comprehensive income 35 36 206 26 837 51 269
for the period
Profit attributable to:
- Non-controlling interest (17) 4 926 5 913 11 492
- Equity holders of the 49 31 165 20 942 38 697
company
34 36 091 26 855 50 189
Other comprehensive income
attributable to:
- Non-controlling interest - (4) 227
- Equity holders of the 115 (14) 853
company
115 (18) 1 080
Total comprehensive income
attributable to:
- Non-controlling interest (17) 4 926 5 909 11 719
- Equity holders of the 49 31 280 20 928 39 550
company
35 36 206 26 837 51 269
Number of shares in issue
(`000):
- Total issued less 225 881 202 131 202 131
treasury shares
- Weighted 213 033 206 066 203 789
- Diluted 229 429 202 131 202 131
Basic and headline earnings
per share (cents)
Basic earnings per share 43 14,6 10,2 19,0
Diluted basic earnings per 33 13,6 10,2 19,0
share
Headline earnings per share 18 12,2 10,3 19,0
Diluted headline earnings 10 11,3 10,3 19,0
per share
Reconciliation between basic
and headline earnings:
Basic earnings 49 31 165 20 942 38 697
Profit on disposal of (5 237) (65) 1
property, plant and
equipment less taxation and
non-controlling interests
Professional fees related to - 260 -
specific repurchase of
shares
Headline earnings 23 25 928 21 137 38 698
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 November 30 November 31 May
2011 2010 2011
% R`000 R`000 R`000
Net cash generated from 37 68 190 49 865 81 727
operations
Net cash flows from (29) (29 482) (41 402) (93 045)
investing activities
Net cash flows from (407) 26 729 (8 696) (6 087)
financing activities
Net increase/(decrease) in 65 437 (233) (17 405)
cash resources
Cash resources at beginning 42 791 60 233 60 233
of six months
Exchange gain/(loss) on cash 55 - (37)
resources
Cash resources at end of six 80 108 283 60 000 42 791
months
The group has authorised
capital expenditure over the
next six months of R58,8
million. R45,8 million is
already committed.
Commitments
Operating lease commitments 13 376 13 581 16 097
(not exceeding five years)
Condensed Consolidated Statement of Financial Position
Unaudited Unaudited Audited
At At At
30 November 30 November 31 May
2011 2010 2011
% R`000 R`000 R`000
ASSETS
Non-current assets 328 527 280 525 314 502
Property, plant and 287 425 240 670 274 241
equipment
Intangible assets 32 344 32 998 32 498
Loans and receivables 6 018 6 857 6 271
Deferred taxation 2 740 - 1 492
Current assets 239 589 173 458 161 443
Inventories 13 511 10 384 12 157
Trade and other receivables 117 795 102 216 105 460
Taxation - 858 1 035
Cash resources 108 283 60 000 42 791
Total assets 568 116 453 983 475 945
EQUITY AND LIABILITIES
Equity 257 285 214 189 230 272
Ordinary shareholders` funds 252 594 189 953 200 226
Non-controlling interests 4 691 24 236 30 046
Liabilities
Non-current liabilities 141 814 91 765 106 498
Interest-bearing borrowings 120 008 68 245 81 286
Deferred tax 21 806 19 988 21 080
Share-based compensation - 3 532 4 132
liability
Current liabilities 169 017 148 029 139 175
Trade and other payables 125 321 99 032 95 595
Interest-bearing borrowings 38 896 43 637 41 554
Taxation 4 800 5 360 2 026
Total equity and liabilities 568 116 453 983 475 945
Net asset value per share 19 111,8 94,0 99,1
(cents)
Net tangible asset value per 25 97,5 77,7 83,0
share (cents)
Cash resources per share 61 47,9 29,7 21,2
(cents)
SEGMENTAL ANALYSIS
Revenue
Automotive and abnormal 32 420 439 317 426 643 634
Retail (4) 15 003 15 582 29 908
Media 8 14 338 13 312 28 168
30 449 780 346 320 701 710
Segment results
Automotive and abnormal 38 57 570 41 741 77 575
Retail 5 386 5 387 10 776
Media 34 1 283 955 3 017
Corporate 12 (9 275) (8 267) (17 238)
38 54 964 39 816 74 130
Unallocated:
Finance income 21 1 405 1 165 2 519
Finance costs 57 (5 463) (3 487) (6 958)
36 50 906 37 494 69 691
Total assets
Automotive and abnormal 19 460 963 385 930 433 991
Retail (26) 12 817 17 343 14 158
Media (13) 8 078 9 337 9 055
Corporate 102 83 518 41 373 16 214
25 565 376 453 983 473 418
Unallocated:
Taxation and deferred 2 740 - 2 527
taxation
25 568 116 453 983 475 945
Total liabilities
Automotive and abnormal 44 262 420 181 871 193 554
Retail (25) 5 357 7 170 7 292
Media (25) 7 780 10 313 8 441
Corporate (43) 8 668 15 092 13 280
33 284 225 214 446 222 567
Unallocated:
Taxation and deferred 5 26 606 25 348 23 106
taxation
30 310 831 239 794 245 673
Condensed Consolidated Statement of Changes in Equity
Share Share Treasury Retained
capital premium shares income
R`000 R`000 R`000 R`000
At 1 June 2010 - audited 2 101 41 096 - 128 456
Dividends declared in - - - -
subsidiaries
Specific share repurchase (80) (6 720) - -
Capital distribution - (6 064) - -
Comprehensive income - - - 20 942
At 30 November 2010 - 2 021 28 312 - 149 398
unaudited
Dividends declared in - - - -
subsidiaries
Capital distribution - (8 085) - -
Treasury shares purchased - - (264) -
Comprehensive income - - - 17 755
At 31 May 2011 - audited 2 021 20 227 (264) 167 153
Dividends declared in - - - -
subsidiaries
Non-controlling interest - - - -
acquired
Conversion of 297 41 859 (8 431) -
shareholding in BEE
consortium
Share issue expenses (444) - -
Share-based compensation - - - -
reserve movement
Capital distribution - (9 273) - -
Treasury shares disposed - - 264 -
Comprehensive income - - - 31 165
At 30 November 2011 - 2 318 52 369 (8 431) 198 318
unaudited
Share-
based Foreign
Revalua- compensa- currency
tion Other tion translation
reserve reserves reserve reserve
R`000 R`000 R`000 R`000
At 1 June 2010 - audited 10 184 52 - -
Dividends declared in - - - -
subsidiaries
Specific share repurchase - - - -
Capital distribution - - - -
Comprehensive income - - - (14)
At 30 November 2010 - 10 184 52 - (14)
unaudited
Dividends declared in - - - -
subsidiaries
Capital distribution - - - -
Treasury shares purchased - - - -
Comprehensive income 883 - - (16)
At 31 May 2011 - audited 11 067 52 - (30)
Dividends declared in - - - -
subsidiaries
Non-controlling interest - - - -
acquired
Conversion of 2 951 - 4 395 (8)
shareholding in BEE
consortium
Share issue expenses - - - -
Share-based compensation - - 525 -
reserve movement
Capital distribution - - - -
Treasury shares disposed - 101 - -
Comprehensive income - - - 115
At 30 November 2011 - 14 018 153 4 920 77
unaudited
Transactions
with non-
controlling Non-
interests controlling
reserve interests Total
R`000 R`000 R`000
At 1 June 2010 - audited - 19 427 201 316
Dividends declared in - (1 100) (1 100)
subsidiaries
Specific share repurchase - - (6 800)
Capital distribution - - (6 064)
Comprehensive income - 5 909 26 837
At 30 November 2010 - - 24 236 214 189
unaudited
Dividends declared in - - -
subsidiaries
Capital distribution - - (8 085)
Treasury shares purchased - - (264)
Comprehensive income - 5 810 24 432
At 31 May 2011 - audited - 30 046 230 272
Dividends declared in - (3 265) (3 265)
subsidiaries
Non-controlling interest (1 505) 1 (1 504)
acquired
Conversion of shareholding in (9 643) (27 017) 4 403
BEE consortium
Share issue expenses - - (444)
Share-based compensation - - 525
reserve movement
Capital distribution - - (9 273)
Treasury shares disposed - - 365
Comprehensive income - 4 926 36 206
At 30 November 2011 - (11 148) 4 691 257 285
unaudited
COMMENTS
The directors of OneLogix are pleased to present the unaudited condensed
consolidated interim financial results for the six months ended 30 November 2011
("the interim period"), reflecting a sustained strong performance. The group
continued to capitalise on the upturn in the niche markets in which it operates,
leveraging the strength of its market positioning and execution of its growth
strategy.
Basis of preparation
The unaudited condensed consolidated interim financial statements have been
prepared in accordance with International Accounting Standards (IAS) 34 `Interim
Financial Reporting`, the AC 500 series of interpretations, the requirements of
the South African Companies Act and the Listings Requirements of the JSE
Limited. The unaudited condensed consolidated interim financial information
should be read in conjunction with the most recent audited annual financial
statements for the year ended 31 May 2011 (`the annual financial statements`),
which have been prepared in accordance with International Financial Reporting
Standards (`IFRS`).
Accounting policies and computations are consistently applied as in the annual
financial statements. These condensed consolidated interim financial statements
have not been audited or reviewed by PricewaterhouseCoopers Inc.
The financial information was prepared by Geoff Glass CA(SA), in his capacity as
Financial Director.
Review of operations
The group performed well. In key businesses, market share was increased based on
the fruits of prior strategic planning and the implementation of strong
operating systems.
Vehicle Delivery Services ("VDS") took advantage of favourable trading
conditions to retain and enhance its market leadership. The past six months were
challenging, requiring innovative management to negate the impact of increasing
costs. The company also experienced an illegal strike, the first in its history.
The successful resolution has enhanced the relationship between the company and
its drivers. Notably, VDS grew 24% in the period which exceeded growth in the
vehicle industry by 9%. The business remains firmly positioned to continue this
momentum, with vigorous business processes, optimum efficiency levels and
exceptional customer service.
Commercial Vehicle Delivery Services ("CVDS") gained market share and entrenched
itself in the market based on consistent excellent service. Opportunities within
the group were also exploited.
Similarly, RFB Logistics ("RFB") performed ahead of expectations. Key drivers of
the business`s outstanding performance included an expanded fleet, increased
work into Southern Africa, upgraded administrative procedures and recognised
customer service.
OneLogix Projex ("Projex"), a relatively new start-up business within the group,
is holding its own and exceeding expectations in the highly competitive project
logistics and abnormal transport market.
Atlas Panelbeaters reaped the benefit of previous infrastructural, systems and
operational improvements to perform well. This has resulted in a growing
reputation in the industry for quality output and customer satisfaction.
Although PostNet suffered the loss of the annuity income-generating Fax2E-mail
service, the balance of the business delivered satisfactory growth, offsetting
the loss. Management has initiated a replacement for this service. PostNet
remains a valuable contributor to the group delivering a strong reliable annuity
income with high margins and continues to evaluate new opportunities.
Business system improvements at Magscene are now fully operational. The business
continues to capture increasing market share with the introduction of new
international titles and other expansions to the product base, as well as
improved penetration into the retail market.
Conversion of shareholding
As previously announced on 14 September 2011, in order to align the interests of
the BEE consortium more directly with the interests of other shareholders, the
company exercised its right to trigger a conversion of shares held by Izingwe
Holdings (Pty) Limited ("Izingwe") and the employee BEE trust in OneLogix (Pty)
Limited, to listed shares in the group with effect from 8 September 2011. As a
result, Izingwe and the employee BEE trust now own 10,25% and 2,56%,
respectively, of the group`s issued ordinary share capital.
Share repurchase
As previously announced on 30 November 2011, the group entered into a share
repurchase programme to repurchase its ordinary shares during the interim
`closed period`. The programme commenced on 1 December 2011 and terminated on
the release of the group`s interim financial results on SENS. The mandate given
to the broking firm with regards the programme, covered the repurchase of shares
up to an aggregate maximum value of R10,0 million, to be bought at a price not
greater than the lower of R1,45 per share or 10% above the volume average
trading price over five trading days preceding the particular repurchase. At 18
February 2012, 223 550 shares at an average price of R1,44 per share had been
repurchased.
Financial results
Group revenue grew 30% from R346,3 million to R449,8 million for the interim
period.
After mitigating the direct effect of the significantly higher fuel prices
during the interim period, which is recovered from the customer base, revenue
growth from the comparable period is estimated to be 24% to R429,6 million.
Operating profit, including items of a capital nature, increased 38% from R39,8
million to R55,0 million. Excluding items of a capital nature, operating profit
increased by 23% to R48,9 million. Margins (excluding items of a capital nature
and recovery of fuel price increases from the customer base) were in line with
the comparative period at 11,4% (November 2010: 11,5%).
Net finance costs increased by 75% from R2,3 million to R4,1 million, due to
finance costs previously capitalised regarding the development of the Cape Town
vehicle facility (completed June 2011) and the group`s increased property
portfolio.
Headline earnings per share ("HEPS") rose 18% from 10,3 cents to 12,2 cents.
HEPS has been negatively impacted due to the timing of the BEE consortium
shareholding conversion (see `Conversion of Shareholding`) during the interim
period.
Earnings per share ("EPS") rose 43% from 10,2 cents to 14,6 cents, boosted by
the capital profit realised from the disposal of a group property in KwaZulu-
Natal.
Diluted HEPS and EPS are lower than their respective undiluted measures due to
the dilutive effect of the shares held by the employee BEE trust as treasury
shares.
Continued emphasis on working capital management resulted in cash flow from
operations growing by 37%, in line with operating profit.
During the interim period, the group invested R54,4 million in continuing
operational infrastructure as follows: R39,9 million for fleet, R9,6 million for
property developments, R3,3 million for IT infrastructure and R1,6 million for
other assets. Net proceeds on disposal of tangible assets raised R26,4 million.
A further investment of R1,5 million was made by way of increasing the group`s
share in Projex from 70% to 80%.
New interest-bearing borrowings of R63,3 million were raised during the interim
period, set-off by the repayments of interest-bearing borrowings of R27,3
million. Capital distribution number 4, totalling R9,3 million, was paid during
the interim period. Cash resources at the reporting date increased by 80% to
R108,3 million, of which R19,7 million is committed to purchase two fully funded
new properties.
Combined distribution to shareholders
Shareholders are advised that a total cash distribution of 4,5 cents per share
(November 2010: 4,0 cents) has been declared for the interim period. This is
made up of a capital distribution out of share premium of 2,7 cents ("capital
distribution No. 5") and a dividend distribution of 1,8 cents ("interim dividend
No. 1"). The capital distribution will be paid from contributed tax capital and,
as such, does not constitute a dividend for taxation purposes. The rationale for
the dividend is to utilise unused Secondary Tax on Companies credits before the
implementation of the new dividends tax regime effective from 1 April 2012.
The salient dates in respect of the combined 2012
distributions are as follows:
Last day to trade cum dividend on Thursday, 15 March
Shares will trade ex dividend from Friday, 16 March
Record date Friday, 23 March
Payment of dividend Monday, 26 March
Shareholders may not dematerialise or rematerialise their shares between Friday,
16 March 2012 and Friday, 23 March 2012, both dates inclusive.
The interim distribution, amounting to R10,4 million, has not been recognised as
a liability in the condensed consolidated interim financial statements. It will
be recognised in shareholders` equity in the year ending 31 May 2012.
OneLogix will continue to assess the payment of interim and final distributions
in light of the board`s ongoing review of earnings, after providing for long-
term growth and cash/debt resources, the amount of reserves available using a
going concern assessment and covenants of banking facilities providers.
Prospects
Revenue is traditionally weighted to the first half of the financial year.
Notwithstanding this, the outlook for the full financial year to 31 May 2012
remains positive. The group has a well-functioning mix of businesses, each well-
positioned to take advantage of growth opportunities in their particular market
segments. OneLogix also has a comparatively large cash reserve and will continue
to assess appropriate earnings-enhancing acquisitions.
People
Andrew Brooking, a non-executive director of the group, has resigned from the
group`s Audit & Risk Committee to ensure the group complies with the King III
corporate governance principles with regards to the independence of committee
members (Java Capital, of which he is a director, is Designated Advisor to the
group). Joe Modibane, an independent non-executive director of the group, has
assumed his position on the committee. We thank Andrew for his invaluable input
to date, and look forward to a continuing association with him as a non-
executive director on the group board.
We remain appreciative that our quality management and employees continue to
perform at the highest levels of excellence. We believe that the enabling
culture within the group facilitates this delivery by continually encouraging
and enabling our people to fully realise their potential.
We further extend our appreciation to our business partners, customers,
suppliers, business advisors and shareholders for their ongoing invaluable
support.
By order of the board
Ian Lourens Geoff Glass
CEO Financial Director
20 February 2012
Directors:
SM Pityana (Chairman)*
AB Ally* (Alternate: DA Hirschowitz)
NJ Bester
AC Brooking*
GM Glass (FD)
AJ Grant*#
IK Lourens (CEO)
CV McCulloch (COO)
JG Modibane*#
*Non-executive
#Independent
Registered office:
46 Tulbagh Road, Pomona, Kempton Park, 1619
(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: 20/02/2012 07:38:01 Produced by the JSE SENS Department.
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