| Tue 26 Feb 2013, 7:05 | | ONELOGIX GROUP LIMITED - Unaudited Condensed Consolidated Interim Results for the six months ended 30 November 2012 |
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OLG 201302260001A
Unaudited Condensed Consolidated Interim Results for the six months ended 30 November 2012
OneLogix Group Limited
(Registration number: 1998/004519/06)
Share Code: OLG
ISIN Code: ZAE000026399
("OneLogix" or "the company" or "the group")
Unaudited Condensed Consolidated Interim Results for the six months ended 30 November 2012
Our people, our success
Highlights
Revenue up 15%
EPS up 18%
HEPS from continuing operations up 13%
NTAV up 19%
Dividend of 4,5 cents per share
Acquisitions of United Bulk and Drive Report successfully concluded (Dec 2012)
Reduced dependence on auto-logistics businesses
Intention to move to JSE Main Board
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 November 30 November 31 May
2012 2011 2012
% R'000 R'000 R'000
Continuing operations
Revenue 15 498 983 435 442 864 097
Operating and administration costs 15 (423 038) (366 930) (735 849)
Depreciation and amortisation 19 (24 913) (20 909) (43 801)
(Loss)/profit on disposal of property, plant and
equipment (*) (304) 6 078 5 973
Operating profit (5) 50 728 53 681 90 420
Finance income 71 2 230 1 306 2 553
Finance costs 36 (7 402) (5 449) (11 470)
Profit before taxation (8) 45 556 49 538 81 503
Taxation (10) (13 027) (14 432) (23 750)
Profit from continuing operations (7) 32 529 35 106 57 753
Profit from discontinued operations * 8 791 985 2 103
Profit for the period 14 41 320 36 091 59 856
Other comprehensive income
Movement in foreign currency translation
reserve 31 115 165
Deferred tax increase due to
CGT inclusion rate increase - - (760)
Total comprehensive income for
the period 14 41 351 36 206 59 261
Profit attributable to:
- Non-controlling interest (51) 2 410 4 926 6 127
- Equity holders of the company 25 38 910 31 165 53 729
14 41 320 36 091 59 856
Other comprehensive income attributable to:
- Non-controlling interest - - -
- Equity holders of the company 31 115 (595)
31 115 (595)
Total comprehensive income attributable to:
- Non-controlling interest (51) 2 410 4 926 6 127
- Equity holders of the company 25 38 941 31 280 53 134
15 41 351 36 206 59 261
Number of shares in issue ('000):
- Total issued less treasury shares 225 658 225 881 225 658
- Weighted 225 658 213 033 219 355
- Diluted 230 681 229 429 223 715
Basic and headline earnings
per share (cents)
Basic earnings per share (cents) 18 17,2 14,6 24,5
Continuing operations (7) 13,3 14,3 23,8
Discontinuing operations * 3,9 0,3 0,7
Diluted basic earnings
per share (cents) 24 16,9 13,6 24,0
Continuing operations (2) 13,1 13,3 23,3
Discontinuing operations * 3,8 0,3 0,7
Headline earnings per share (cents) 11 13,6 12,2 22,1
Continuing operations 13 13,5 11,9 21,4
Discontinuing operations (67) 0,1 0,3 0,7
Diluted headline earnings
per share (cents) 18 13,3 11,3 21,7
Continuing operations 20 13,2 11,0 21,0
Discontinuing operations (67) 0,1 0,3 0,7
Reconciliation between basic
and headline earnings
Basic earnings 25 38 910 31 165 53 729
Loss/(profit) on disposal of property, plant
and equipment less taxation and non-controlling
interests 206 (5 237) (5 159)
Profit on disposal of discontinued operation less
taxation (8 523) - -
Headline earnings 18 30 593 25 928 48 570
* >100%
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 November 30 November 31 May
2012 2011 2012
% R'000 R'000 R'000
Net cash generated from operations (52) 32 734 68 190 119 074
Continuing operations 32 792 66 425 117 741
Discontinuing operations (58) 1 765 1 333
Net cash flows from investing activities 43 (42 030) (29 482) (91 683)
Continuing operations (40 905) (27 095) (92 326)
Discontinuing operations (1 125) (2 387) 643
Net cash flows from financing activities (92) 2 045 26 729 32 199
Continuing operations 2 120 26 516 32 242
Discontinuing operations (75) 213 (43)
Net increase/(decrease) in
cash resources (7 251) 65 437 59 590
Cash resources at beginning
of period 102 494 42 791 42 791
Exchange gain/(loss) on
cash resources 17 55 113
Cash resources at end of period (12) 95 260 108 283 102 494
Condensed Consolidated Statement of Financial Position
Unaudited Unaudited Audited
at at at
30 November 30 November 31 May
2012 2011 2012
% R'000 R'000 R'000
ASSETS
Non-current assets 389 671 328 527 368 190
Property, plant and equipment 350 887 287 425 327 555
Intangible assets 31 178 32 344 31 982
Loans and receivables 6 229 6 018 6 498
Deferred taxation 1 377 2 740 2 155
Current assets 262 371 239 589 238 406
Inventories 10 194 13 511 14 759
Trade and other receivables 154 976 117 795 119 210
Taxation 1 941 - 1 943
Cash resources 95 260 108 283 102 494
Total assets 652 042 568 116 606 596
EQUITY AND LIABILITIES
Equity 299 920 257 285 270 390
Ordinary shareholders' funds 293 806 252 594 264 498
Non-controlling interests 6 114 4 691 5 892
Liabilities
Non-current liabilities 156 460 141 814 149 277
Interest-bearing borrowings 129 773 120 008 122 431
Deferred tax 26 687 21 806 26 846
Current liabilities 195 662 169 017 186 929
Trade and other payables 137 012 125 321 136 211
Interest-bearing borrowings 54 867 38 896 50 017
Taxation 3 783 4 800 701
Total equity and liabilities 652 042 568 116 606 596
Net asset value per share (cents) 16 130,2 111,8 117,2
Net tangible asset value
per share (cents) 19 116,4 97,5 103,0
Cash resources per share (cents) (12) 42,2 47,9 45,4
SEGMENTAL ANALYSIS
Revenue
Specialised transport 15 444 567 385 003 768 424
Retail 5 15 695 15 003 28 648
Reportable segments 15 460 262 400 006 797 072
Other 9 38 721 35 436 67 025
15 498 983 435 442 864 097
Segment results
Specialised transport 2 54 581 53 274 93 422
Retail 5 5 662 5 386 10 788
Reportable segments 3 60 243 58 660 104 210
Other (78) 953 4 296 5 138
Corporate items 13 (10 468) (9 275) (18 928)
(6) 50 728 53 681 90 420
Unallocated:
Finance income 59 2 230 1 306 2 553
Finance costs 35 (7 402) (5 449) (11 470)
(8) 45 556 49 538 81 503
Total assets
Specialised transport 29 561 263 434 349 480 134
Retail 74 22 359 12 817 16 723
Reportable segments 31 583 622 447 166 496 857
Other (32) 23 457 34 692 39 202
Corporate items (50) 41 645 83 518 66 439
Unallocated: taxation
and deferred taxation 21 3 318 2 740 4 098
15 652 042 568 116 606 596
Total liabilities
Specialised transport 17 294 628 251 043 261 993
Retail 84 9 876 5 357 8 712
Reportable segments 19 304 504 256 400 270 705
Other (50) 9 495 19 157 25 575
Corporate items (12) 7 653 8 668 12 379
Unallocated: taxation
and deferred taxation 15 30 470 26 606 27 547
352 122 310 831 336 206
The group has authorised capital
expenditure over the next 6 months
of R31,9 million. R26,9 million
is already committed.
Commitments
Operating lease commitments
(not exceeding five years) 53 347 13 376 26 060
Condensed Consolidated Statement of Changes in Equity
Share Share Treasury
capital premium shares
R'000 R'000 R'000
At 1 June 2011 - audited 2 021 20 227 (264)
Dividends declared to non-controlling interests - - -
Capital distributions and dividends
to shareholders - (9 273) -
Non-controlling interest acquired - - -
Conversion of shareholding in BEE consortium 297 41 859 (8 431)
Share issue expenses - (444) -
Share-based compensation reserve movement - - -
Treasury shares disposed - - 264
Comprehensive income - - -
At 30 November 2011 - unaudited 2 318 52 369 (8 431)
Capital distributions and
dividends to shareholders - (6 253) -
Share-based compensation reserve movement - - -
General share repurchase (2) (319) -
Comprehensive income - - -
At 31 May 2012 - audited 2 316 45 797 (8 431)
Dividends declared to
non-controlling interests - - -
Non-controlling interest acquired - - -
Share-based compensation reserve movement - - -
Capital distribution - (10 422) -
Comprehensive income - - -
At 30 November 2012 - unaudited 2 316 35 375 (8 431)
Condensed Consolidated Statement of Changes in Equity
Retained Revaluation Other
income reserve reserves
R'000 R'000 R'000
At 1 June 2011 - audited 167 153 11 067 52
Dividends declared to non-controlling interests - - -
Capital distributions and dividends
to shareholders - - -
Non-controlling interest acquired - - -
Conversion of shareholding in BEE consortium - 2 951 -
Share issue expenses - - -
Share-based compensation reserve movement - - -
Treasury shares disposed - - 101
Comprehensive income 31 165 - -
At 30 November 2011 - unaudited 198 318 14 018 153
Capital distributions and
dividends to shareholders (4 169) - -
Share-based compensation reserve movement - - -
General share repurchase - - -
Comprehensive income 22 564 (760) -
At 31 May 2012 - audited 216 713 13 258 153
Dividends declared to
non-controlling interests - - -
Non-controlling interest acquired - - -
Share-based compensation reserve movement - - -
Capital distribution - - -
Comprehensive income 38 910 - -
At 30 November 2012 - unaudited 255 623 13 258 153
Condensed Consolidated Statement of Changes in Equity
Share- Foreign Transactions
based currency with non-
compensation translation controlling
reserve reserve interests
R'000 R'000 R'000
At 1 June 2011 - audited - (30) -
Dividends declared to non-controlling interests - - -
Capital distributions and dividends
to shareholders - - -
Non-controlling interest acquired - - (1 505)
Conversion of shareholding in BEE consortium 4 395 (8) (9 643)
Share issue expenses - - -
Share-based compensation reserve movement 525 - -
Treasury shares disposed - - -
Comprehensive income - 115 -
At 30 November 2011 - unaudited 4 920 77 (11 148)
Capital distributions and
dividends to shareholders - - -
Share-based compensation reserve movement 789 - -
General share repurchase - - -
Comprehensive income - 50 4
At 31 May 2012 - audited 5 709 127 (11 144)
Dividends declared to
non-controlling interests - - -
Non-controlling interest acquired - - -
Share-based compensation reserve movement 789 - -
Capital distribution - - -
Comprehensive income - 31 -
At 30 November 2012 - unaudited 6 498 158 (11 144)
Condensed Consolidated Statement of Changes in Equity
Non-
controlling
interests Total
R'000 R'000
At 1 June 2011 - audited 30 046 230 272
Dividends declared to non-controlling interests (3 265) (3 265)
Capital distributions and dividends
to shareholders - (9 273)
Non-controlling interest acquired 1 (1 504)
Conversion of shareholding in BEE consortium (27 017) 4 403
Share issue expenses - (444)
Share-based compensation reserve movement - 525
Treasury shares disposed - 365
Comprehensive income 4 926 36 206
At 30 November 2011 - unaudited 4 691 257 285
Capital distributions and
dividends to shareholders - (10 422)
Share-based compensation reserve movement - 789
General share repurchase - (321)
Comprehensive income 1 201 23 059
At 31 May 2012 - audited 5 892 270 390
Dividends declared to
non-controlling interests (2 089) (2 089)
Non-controlling interest acquired (99) (99)
Share-based compensation reserve movement - 789
Capital distribution - (10 422)
Comprehensive income 2 410 41 351
At 30 November 2012 - unaudited 6 114 299 920
Comments
The unaudited condensed consolidated interim financial results for the six months ended 30 November 2012 ("the interim period") reflect the group's continued strong performance as a result of the ongoing hardiness of our businesses in challenging and variable economic conditions, and the strength of our management teams.
Basis of presentation
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, No. 71 of 2008 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 2012, 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 results have been compiled under the supervision of the Financial Director, GM Glass CA(SA).The interim results have not been audited or reviewed by the group's auditors, PricewaterhouseCoopers Inc.
Review of operations
Notwithstanding industrial unrest, the group's notable performance for the interim period was driven entirely by organic growth for the third consecutive year.
Specialised Transport reportable segment
Vehicle Delivery Services ("VDS") protected its market share with recognised exceptional customer service. Notwithstanding a market exhibiting below average inflation, the group continued to invest in optimal fleet, IT infrastructure, facilities and people to effectively leverage VDS's leadership of this market and realise future growth potential. Management also focussed relentlessly on cost management.
Commercial Vehicle Delivery Services ("CVDS") continued to gain market share. During the interim period substantial costs were incurred in preparation for new secured business, which was realised post November 2012.
RFB Logistics ("RFB") and in particular OneLogix Projex ("Projex"), again exceeded expectations. Investment in fleet, IT and general business process, together with excellent customer service, facilitated the market share growth, especially in the infrastructure-related project logistics market. Given the two businesses' complementary customer base within a defined market segment and operational synergies, the group is currently processing their amalgamation. This process is expected to be completed prior to year-end.
Retail reportable segment
PostNet, a mature business, remains a valuable contributor to the group with high margins and reliable annuity income. It continues to evaluate new opportunities for growth and diversification.
Other reportable segment
This comprises mainly Atlas Panelbeaters, which was confronted by tough market conditions necessitating a review of business processes. This action is well underway and initiatives such as cost cutting and improved operational and business process controls are beginning to bear fruit. QSA, acquired effective 1 June 2012, owns transport-specific accounting software. QSA is presently in an investment phase and as anticipated, is currently a small contributor to group earnings.
Discontinued operations
With effect from 1 October 2012, OneLogix disposed of its 80% stake in Magscene to CTP Limited for R10 million. Proceeds, net of cash balances disposed of, amounted to R8,5 million.
The sale signifies the group's final exit from its non-core media-related logistics businesses. OneLogix is now positioned to focus on the larger businesses within the group. This will include the pursuit of strategic acquisitions, specifically of entrepreneurial businesses to whom OneLogix can provide a proven management platform in order to expand and realise potential.
Financial results
Group revenue from continuing operations grew 15% from R435,4 million to R499 million for the interim period.
Continuing operations' operating profit, excluding items of a capital nature, increased by 7% from R47,6 million to R51 million. Including items of a capital nature, operating profit decreased by 5% to R50,7 million. A capital profit of R6 million, relating to the disposal of a group property in KwaZulu-Natal, was recognised in the prior interim period.
Operating margins, excluding items of a capital nature, were slightly down from the comparative period to 10,2% (November 2011: 10,9%). This was mainly due to higher fuel prices (which are recovered from the customer base down the line) and above inflation increases to other major input costs. Initiatives are in place to manage cost creep in line with top-line growth.
Net finance costs increased by 25% from R4,1 million to R5,2 million, as a result of the group's increased property portfolio. Interest cover of 9,8 times enables OneLogix to access further borrowings to fund growth opportunities.
Headline earnings per share ("HEPS") rose 11% from 12,2 cents to 13,6 cents, as a result of the strong performance of the Specialised Transport division. This was offset to an extent by a reduction in contribution to earnings from the Other reportable segment. HEPS from continuing operations rose 13% from 11,9 cents to 13,5 cents.
Earnings per share ("EPS") grew 18% from 14,6 cents to 17,2 cents, boosted by the capital profit realised from the disposal of Magscene.
Diluted HEPS and EPS are marginally lower than their respective undiluted measures, due to the dilutive effect of the shares held by the employee BEE Trust as treasury shares.
Cash flows from operations decreased 52% to R32,7 million due to required investment in working capital to fund the group's growth.
During the interim period, the group invested R51,7 million in continuing operational infrastructure as follows: R39 million for fleet, R7,3 million for property developments, R2,1 million for IT infrastructure and R3,3 million for other assets. Net proceeds of R2,7 million were received on the disposal of tangible assets. An investment of R1,5 million in QSA was offset by the net proceeds of R8,5 million received on the disposal of the group's interest in Magscene.
New interest-bearing borrowings of R40,1 million were raised during the interim period, offset by the repayment of interest-bearing borrowings of R27,6 million. Capital distribution number 6, totalling R10,4 million, was paid during the interim period. Cash resources at the reporting date were R95,3 million, of which R75 million was utilised subsequent to period-end to settle the purchase price of the two acquisitions made in December 2012 (see "Post interim period events").
Post interim period events
As announced on 5 December 2012, OneLogix has acquired 60% of RSA Tankers Proprietary Limited, trading as United Bulk, for R55 million. This company is a leading specialised bulk transporter of liquid food grade products, liquid hazardous materials and liquid petroleum gas. The provisional fair value of net assets acquired is R25,8 million. The split within total intangible assets of R29,2 million, between goodwill and other intangible assets is still to be finalised.
Further on 21 December 2012, the group announced its acquisition of 40% of Drive Report Proprietary Limited ("Drive Report") for R20 million cash. Drive Report is a driver behaviour management company aimed at addressing cost optimisation and road safety, currently two key factors in the logistics and transport-related industries.
Both sellers remain firmly vested, with shareholding interests of 40% and 60%, respectively.
These acquisitions complement the existing specialised logistics operations of the group, are essentially non-cyclical, and operate across a broad spectrum of the logistics market. The acquisitions are consistent with the group's acquisition philosophy and represent the systematic progression of the strategy to further reduce dependence on the auto-logistics component of the business.
Dividend
Shareholders are advised that an interim gross dividend, No.2 of 4,5 cents per share, in respect of the six months ended 30 November 2012, was declared on Friday, 22 February 2013.
This is a dividend as defined in the Income Tax Act, 1962, and is payable from income reserves. The South Africa dividends tax ("DT") rate is 15%. The net dividend payable to shareholders who are subject to dividends tax is 3,825 cents per share, while it is 4,5 cents per share for those shareholders who are exempt from dividends tax. The income tax reference number of the company is 9361229710.
At the declaration date, the issued share capital was 231 595 235 ordinary shares of no par value (with no STC reserves available for utilisation).
The salient dates in respect of the interim dividend are as follows:
2013
Last day to trade cum dividend on Friday, 12 April
Shares will trade ex dividend from Monday, 15 April
Record date Friday, 19 April
Payment of dividend Monday, 22 April
Shareholders may not de-materialise or re-materialise their shares between Monday, 15 April 2013 and Friday, 19 April 2013, both dates inclusive.
The interim dividend, 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 for the year ending 31 May 2013.
OneLogix will continue to assess the payment of interim and final dividends in light of the board's ongoing review of earnings, after providing for long-term growth and cash/debt resources and the amount of reserves available using a going concern assessment and the covenants of facility providers.
Notice of intention to move to JSE Main Board
The group's present listing is on AltX. The board of directors appreciates the constraints this places on potential investors, and is intent on migrating to the JSE Main Board following all necessary approvals.
Prospects
Although revenue is traditionally weighted to the first half of the financial year, the period has been impacted by industry wide industrial action. Notwithstanding this, the outlook for the full financial year to 31 May 2013 remains positive. The existing businesses within the group clearly understand their challenges, and are well positioned to address these and to take advantage of growth opportunities in their particular market segments.
The newly acquired businesses are expected to contribute to earnings for the first time in the second half of the current year.
The group will continue to investigate further suitable acquisition opportunities.
People
We remain appreciative that our quality management and employees continue to perform at the highest levels of excellence. We believe that the group's enabling culture facilitates this by continually encouraging and empowering our people to realise their full potential.
We further thank our business partners, customers, suppliers, business advisors and shareholders for their ongoing invaluable support.
By order of the board
Ian Lourens
CEO
Geoff Glass
FD
26 February 2013
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*#, LJ Sennelo*#
* 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 Adviser:
JavaCapital
Your specialist logistics service provider
VDS
CVDS
ONELOGIX PROJEX
UNITED BULK
RFB LOGISTICS
POSTNET
ATLAS PANEL BEATERS
DRIVE REPORT
QSA
Date: 26/02/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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