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Preliminary audited group results for the year ended 30 June 2013
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")
PRELIMINARY AUDITED
GROUP RESULTS
for the year ended 30 June 2013
REVENUE
13% UP
TO R590,2 MILLION
EPS AND HEPS
17% UP
TO 25,5 CENTS PER SHARE
EBITDA
10% UP
TO R187,5 MILLION
DIVIDEND
47% UP
TO 11,0 CENTS PER SHARE
Summarised income statement
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 Note 2013 2012
Revenue 590 163 523 731
Earnings before interest, taxation and
depreciation and amortisation (EBITDA) 187 492 171 085
Depreciation (27 724) (23 184)
Operating profit before finance costs 159 768 147 901
Net finance costs (16 566) (21 026)
Finance income 3 541 2 301
Finance costs (20 107) (23 327)
Profit before taxation 143 202 126 875
Taxation 1 (35 135) (35 729)
Profit for the year 108 067 91 146
Attributable to:
Owners of the parent 106 753 89 471
Non-controlling interests 1 314 1 675
Attributable profit 108 067 91 146
Further information
Number of ordinary shares in issue (thousands) 420 253 416 170
Weighted average number of ordinary shares
in issue (thousands) 418 978 411 731
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 25,5 21,7
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 25,2 21,5
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 25,5 21,7
Dividend per ordinary share 11,0 7,5
Interim divided per ordinary share paid (cents) 4,5 3,0
Final dividend per ordinary share proposed/paid (cents) 6,5 4,5
Summarised statement of comprehensive income
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 2013 2012
Profit for the year 108 067 91 146
Other comprehensive income for the year net of tax 1 334 (621)
Hedge accounting for fair value on interest rate swaps 1 573 (751)
Currency movement on translation of foreign subsidiary (239) 130
Total comprehensive income for the year 109 401 90 525
Attributable to:
Owners of the parent 108 204 88 786
Non-controlling interests 1 197 1 739
Summarised statement of financial position
Audited Audited
as at as at
30 June 30 June
R'000 Note 2013 2012
ASSETS
Non-current assets 550 540 508 744
Property 207 451 179 442
Plant and equipment 170 405 156 257
Goodwill 171 666 171 666
Deferred taxation 1 018 1 379
Current assets 144 710 149 087
Inventories 10 219 15 556
Trade receivables 99 768 79 526
Other receivables 8 514 6 515
Taxation 311 1 524
Bank balances 25 898 45 966
Total assets 695 250 657 831
EQUITY AND LIABILITIES
Equity and reserves 461 012 385 254
Equity attributable to owners of the parent 457 364 382 803
Non-controlling interests 3 648 2 451
Non-current liabilities 117 327 180 191
Interest-bearing liabilities 2 104 812 168 485
Deferred taxation 12 515 11 706
Current liabilities 116 911 92 386
Trade payables 61 956 48 562
Deferred revenue 10 601 11 686
Bank overdraft 576 42
Provisions 1 989 1 939
Taxation 5 720
Interest-bearing liabilities 2 36 069 30 157
Total equity and liabilities 695 250 657 831
Net asset value per ordinary share (cents) 108,8 91,8
Notes:
1. For the current year there was no Secondary Taxation on Companies due to the change to withholding tax.
(30 June 2012: R2,3 million)
2. Long-term interest-bearing liabilities include the Metrofile (Pty) Limited amortising and bullet loans which
have a remaining 33-month tenure as well as loan agreements entered into by Cleardata (Pty) Limited in order
to finance mobile shredding units. Short-term interest-bearing liabilities include the portions of the Metrofile (Pty)
Limited amortising loan and Cleardata loan agreements payable within one year. The group's total borrowings
are 75% hedged after having pre-paid R60 million against the bullet loan (30 June 2012: 70%). The Metrofile
(Pty) Limited borrowings are JIBAR linked and are hedged by way of the interest rate swaps, which expire on
30 September 2014, whilst the Cleardata (Pty) Limited borrowings are prime linked and are unhedged.
3. The majority of the group's properties have been pledged as security against certain loans to the group
whilst the accounts receivable and inventory were released from the security package during the current
financial year.
Reconciliation of headline earnings
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 2013 2012
Profit attributable to owners of the parent 106 753 89 471
Profit on sale of plant and equipment (168) (24)
Tax effect of above items 47 7
Headline earnings 106 632 89 454
Headline earnings per ordinary share (cents) 25,5 21,7
Summarised segmental information
Revenue EBITDA
Audited Audited Audited Audited
12 months 12 months 12 months 12 months
ended ended ended ended
30 June 30 June 30 June 30 June
R'000 2013 2012 2013 2012
Metrofile Records Management 476 657 416 212 132 540 115 568
CSX Customer Services 71 362 72 156 2 426 8 420
Property Companies 42 865 39 145
Other 53 081 45 627 9 661 7 952
Inter-group (10 937) (10 264)
Total 590 163 523 731 187 492 171 085
Operating profit Tangible assets
Audited Audited Audited Audited
12 months 12 months 12 months 12 months
ended ended ended ended
30 June 30 June 30 June 30 June
R'000 2013 2012 2013 2012
Metrofile Records Management 110 682 97 059 256 900 240 228
CSX Customer Services 1 793 7 870 23 215 26 887
Property Companies 42 865 39 145 207 771 179 442
Other 4 428 3 827 35 697 39 608
Total 159 768 147 901 523 583 486 165
"Metrofile Records Management" represents the Metrofile record storage, records management, data protection and
scanning business units which are managed and operated geographically.
"Other" includes Metrofile Holdings Limited, Africa operations, Rainbow Paper Management, Cleardata and, with
effect from 1 March 2012, Global Continuity.
Finance costs have not been reflected on the segmental report as R16,5 million of the total R20,1 million charge
relates to Metrofile (Pty) Limited which incompasses the "Metrofile Records Management" and "CSX Customer
Services" divisions; the balance of the finance costs relate to Cleardata (Pty) Limited.
Summarised statement of cash flows
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 2013 2012
Cash generated from operations before net working
capital changes 194 216 172 914
Increase in net working capital (4 544) (17 775)
Cash generated from operations 189 672 155 139
Net finance costs paid (16 566) (21 026)
Dividends declared (37 639) (22 608)
Normal taxation paid (27 032) (34 325)
Net cash inflow from operating activities 108 435 77 180
Net cash outflow from investing activities:
Investment in property, plant and
equipment: expansion (62 392) (35 201)
Investment in property, plant and
equipment: replacement (8 624) (8 517)
Proceeds on disposal of property, plant and equipment 849 945
Increase in shareholding of subsidiary and
acquisition of business (11 300)
Net cash outflow from financing activities:
Issue of shares in terms of vendor placements 11 300
Loans repaid (92 870) (26 064)
Loans raised 34 000
Net (decrease)/increase in cash and cash equivalents (20 602) 8 343
Cash and cash equivalents at the beginning of the year 45 924 37 581
Cash and cash equivalents at the end of the year 25 322 45 924
Represented by:
Bank balances 25 898 45 966
Bank overdrafts (576) (42)
Summarised statement of changes in equity
Total
equity
before
Accumu- minority Non-
Share Share lated Other apportion- controlling
capital premium losses reserves ment interest Total
R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at
30 June 2011 2 508 518 817 (215 144) 2 619 308 800 1 643 310 443
Shares issued in
terms of vendor
placements for
acquisitions 25 11 275 11 300 11 300
Shares issued in
terms of share
schemes 25 9 774 9 799 9 799
Increase in share-
holding in Cleardata
to 70% (6 569) (6 569) (931) (7 500)
IFRS 2 Equity Reserve
relating to share
schemes 3 094 3 094 3 094
Share Scheme
Settlement (7 593) (2 206) (9 799) (9 799)
Dividends declared (22 608) (22 608) (22 608)
Total comprehensive
income for the
year ended
30 June 2012 89 471 (685) 88 786 1 739 90 525
Balance at
30 June 2012 2 558 539 866 (162 443) 2 822 382 803 2 451 385 254
Shares issued in
terms of share
schemes 25 16 019 16 044 16 044
IFRS 2 Equity Reserve
relating to share
schemes 3 996 3 996 3 996
Share Scheme
Settlement (13 662) (2 382) (16 044) (16 044)
Dividends declared (37 639) (37 639) (37 639)
Total comprehensive
income for the
year ended
30 June 2013 106 753 1 451 108 204 1 197 109 401
Balance at
30 June 2013 2 583 555 885 (106 991) 5 887 457 364 3 648 461 012
Commentary on results
Profile
Metrofile is the market leader in both physical and digital information and records management in Africa and is represented
in the six major provinces of South Africa, Mozambique, Nigeria and, through the CSX Customer Services brand, has
contracts in numerous other African countries. The Metrofile Records Management division operates from 44 facilities,
at 21 locations, covering more than 88,000 square metres of warehousing and office space. In accordance with its owner/
lessee model, 59,6% of these facilities are owned by the group. The rest of the group's divisions lease their premises.
Services include Records Storage and Management, Image Processing, Backup Storage and Management, Records
Management Software and Records Management Consultancy, Business Continuity and IT Continuity, 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
("MIC"), which owns 34,3% of Metrofile's equity.
Strategy
Metrofile will continue to expand its services in the information management sector, through both innovation and
acquisition; whilst a continued focus on cross-selling the group's diverse range of services to both new and existing
customers remains a key part of the group's strategy. The necessity for businesses to not only archive but manage all
types of records, whether they be in physical or digital format, positions the group well to assist companies with their
record keeping requirements thereby mitigating risk to the organisation.
Metrofile's expansion into Africa will be driven by the demand of existing customers that have a need for similar services
to those received in South Africa. With Metrofile now being established in Mozambique and Nigeria the expansion into
other African countries is being explored taking into account, amongst other things, potential target countries' business
and political environment, market attractiveness and overall risk.
Metrofile has a defined strategy of owning 70% of the properties, from which the Metrofile Records Management division
operates, in order to optimise operational efficiency. The group also has, as a guideline, a targeted debt level of 1,5 times
EBITDA and dividend cover of 2,25 times.
Financial review
Revenue increased by 12,7% to R590,2 million, EBITDA by 9,6% to R187,5 million and EBIT by 8,0% to R159,8 million.
The primary segment, Metrofile Records Management, had a strong year with double-digit growth across all indicators.
The CSX Customer Services business unit had a stronger second half but still fell short of targets, the business
model remains sound and prospects for the year ahead are good given the economic environment. Rainbow Paper
Management has grown volumes for five years but the pulp paper price has negatively impacted both revenue and
profits. Having come out of business rescue and due to a tough economic climate, Global Continuity has made losses for
its first full financial year; the business has been restructured and is expected to become profitable in the 2014 financial
year. Cleardata has grown well to become the market leader in confidential records destruction.
Cash generation and working capital management remained positive as cash generated from operations increased by
22,3% when compared to the prior year. Both accounts receivable and payable were higher due to the year-end falling
on a Sunday, whilst inventory was reduced by R5,3 million. Net finance costs reduced by 21,2% in line with the continued
reduction in the group's debt level. Net debt: equity reduced to 25,1% (June 2012: 40,0%).
Diluted earnings per share ("EPS") and headline earnings per share ("HEPS") increased by 17,2% and 17,5%,
respectively, to 25,5 cents and 25,2 cents (2012: 21,7 cents and 21,5 cents) whilst the total dividend per share increased
by 46,7% to 11,0 cents (2012: 7,5 cents).
As planned, the increase in CAPEX of R71,0 million was mainly for expansion and includes two new buildings totalling
R28,3 million and racking of R25,5 million required for growth. The building CAPEX was accelerated due to the favourable
interest rates, steel prices and the group's increased borrowing capacity. The planned investment in the 2014 financial
year was to reduce; however, an opportunity has arisen to purchase two strategically important buildings which the
Metrofile Records Management division already occupies; this will result in spending R40,0 million with external rentals
reducing accordingly. The acquisition of the two buildings will increase the owned premises percentage to 68,2%.
Metrofile accounts for its property portfolio on a cost basis, the total of which as at June 2013 amounted to R207,5 million.
The properties were valued in June 2013 resulting in an open market value of R335,8 million and a replacement value
of R440,3 million.
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr RM Buttle, CA (SA).The preliminary financial
statements has been prepared in accordance with the framework concepts and measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting
Standards Council, the information as required by IAS 34: Interim Financial Reporting, the JSE Listings Requirements
and the requirements of the Companies Act of South Africa. The report has been prepared using accounting policies that
comply with IFRS which are consistent with those applied in the financial statements for the year ended 30 June 2012.
Certain accounting pronouncements became effective during the current financial year; however, these do not have a
material impact on either transactions or disclosures.
Audit opinion
The independent auditors, Deloitte & Touche, have issued their unmodified audit opinion on the group's preliminary
financial statement for the 30 June 2013 year-end, in accordance with International Standards on Auditing. These
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 the financial statements and audit report are available for inspection at the
company's registered office. 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 a consulting agreement, and as approved at the Annual General Meeting, the MIC fees of R1,2 million
(2012: R1,0 million) were paid during the year under review.
Directorate and corporate governance
The structure of the Board and sub-committees remains unchanged with the exception of the splitting of the
Nomination and Remuneration Committees into two separate committees; the membership remains the same and
Mr Christopher Seabrooke chairs the Nomination Committee whilst Mrs Mary Bomela chairs the Remuneration Committee.
The Board membership remains unchanged since November 2012 when Mrs Sindi Zilwa replaced Mrs Ndumi Medupe.
The Board comprises two executive and six non-executive directors, of whom four are independent directors. Mr Nigel Matthews
remains the lead independent director.
Dividends
The continued improvement in the group's financial structure and cash flows have enabled the Board to reduce the
dividend cover, for the full year, from 2,89 times in the comparative year to 2,32 times for the current year whilst
simultaneously reducing net debt.
Notice is hereby given that a final gross cash dividend of 6,5 cents per share in respect of the year ended 30 June 2013
has been declared payable to the holders of ordinary shares recorded in the books of the Company on Friday,
4 October 2013. The last day to trade cum-dividend will therefore be Friday, 27 September 2013 and Metrofile shares
will trade ex-dividend from Monday, 30 September 2013. Payment of the dividend will be made on Monday, 7 October 2013.
Share certificates may not be dematerialised or rematerialised between Monday, 30 September 2013 and Friday,
4 October 2013, both days inclusive. Withholding tax on dividends will be deducted for all shareholders who are not
exempt in terms of the legislation at a rate of 15% which will result in a final net cash dividend of 5,525 cents per share.
No credits in terms of Secondary Taxation on Companies (STC) were available for utilisation. The Company's issued
share capital remains unchanged, at 420 252 623 shares, between the year-end date and the date of the dividend
declaration. The Company's tax number is 9375066710.
Commitments
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. Operating lease commitments amount
to R66,6 million for the next five years. Planned capital expansions for the 2014 financial year amount to R41,6 million
excluding any building developments and purchases.
Events after the reporting date
There have been no material events after the reporting date.
Outlook
Metrofile remains well positioned to expand its services geographically and through additional offerings which will see a
continuation of its growth in revenue, EBITDA, earnings and dividends in the year ahead. Further, our pattern of growth
continues to reflect the largely non-cyclical nature of our primary business units.
This statement has not been reviewed or audited by Metrofile's auditors.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
3 September 2013
Senderwood
Gauteng
METROFILE HOLDINGS LIMITED Directors:
Incorporated in the Republic of South Africa CS Seabrooke^ (Chairman)
(Registration number 1983/012697/06) MS Bomela* (Deputy Chairperson)
Share code: MFL GD Wackrill (CEO)
ISIN: ZAE000061727 RM Buttle (CFO)
("Metrofile" or "the Company" or "the group") P Langeni^
CN Mapaure*
Registered office:
41 Wordsworth Avenue IN Matthews+
Senderwood, Bedfordview, 2007 SV Zilwa^
www.metrofileholdings.com CP Coutts-Trotter#
+Lead independent
Sponsor:
^Independent
The Standard Bank of South Africa Limited *Non-executive
#Alternate to CS Seabrooke
Transfer secretaries:
Computershare Investor Services (Pty) Limited Company Secretary:
70 Marshall Street, Johannesburg, 2001 P Atkins
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