Wrap Text
Interim group results for the six months ended 31 December 2015
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 INTERIM GROUP RESULTS
for the six months ended 31 December 2015
NORMALISED REVENUE
UP
10.5%
NORMALISED EBITDA
UP
16.4%
NORMALISED EPS
UP
12.7%
NORMALISED HEPS
UP
12.7%
INTERIM DIVIDEND PER SHARE
UP
22.2%
Summarised income statement
Normalised Normalised
Unaudited Unaudited Audited Unaudited Unaudited
6 months 6 months 12 months 6 months 6 months
ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec
R'000 2015 2014 2015 2015 2014
Revenue 374 687 338 274 701 898 384 315 347 918
Earnings before interest, taxation,
depreciation and amortisation (EBITDA) 121 687 103 179 218 426 130 870 112 457
Depreciation (18 726) (15 073) (31 636) (19 051) (15 422)
Operating profit before finance costs 102 961 88 106 186 790 111 819 97 035
Net finance costs (7 194) (5 759) (13 084) (6 380) (5 569)
Finance income 2 887 2 558 7 492 2 887 2 558
Finance costs (10 081) (8 317) (20 576) (9 267) (8 127)
Profit before taxation 95 767 82 347 173 706 105 439 91 466
Taxation (25 823) (20 825) (46 244) (28 531) (23 272)
Profit for the period 69 944 61 522 127 462 76 908 68 194
Attributable to:
Owners of the parent 68 608 60 111 124 620 75 572 66 783
Non-controlling interests 1 336 1 411 2 842 1 336 1 411
Profit for the period 69 944 61 522 127 462 76 908 68 194
Further information
Number of ordinary shares in issue (thousands) 427 084 427 084 427 084 427 084 427 084
Weighted average number of ordinary
shares in issue (thousands) 426 800 425 831 425 831 426 800 425 831
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 16,1 14,1 29,3 17,7 15,7
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 16,1 14,1 29,2 17,7 15,6
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 16,1 14,1 29,3 17,7 15,7
Dividend per ordinary share
Interim dividend per ordinary share
– proposed/paid (cents) 11,0 9,0 9,0 11,0 9,0
Final dividend per ordinary share
– paid (cents) – – 12,0 – –
Summarised statement of comprehensive income
Normalised Normalised
Unaudited Unaudited Audited Unaudited Unaudited
6 months 6 months 12 months 6 months 6 months
ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec
R'000 2015 2014 2015 2015 2014
Profit for the period 69 944 61 522 127 462 76 908 68 194
Other comprehensive income for the
period net of tax 696 (130) (773) 696 (130)
Hedge accounting for fair value on
interest rate swaps – (133) 133 – (133)
Currency movement on translation
of foreign subsidiary 696 3 (906) 696 3
Total comprehensive income
for the period 70 640 61 392 126 689 77 604 68 064
Attributable to:
Owners of the parent 68 532 60 199 123 812 75 496 66 871
Non-controlling interests 2 108 1 193 2 877 2 108 1 193
Reconciliation of headline earnings
Normalised Normalised
Unaudited Unaudited Audited Unaudited Unaudited
6 months 6 months 12 months 6 months 6 months
ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec
R'000 2015 2014 2015 2015 2014
Profit attributable to owners of the parent 68 608 60 111 124 620 75 572 66 783
Profit on disposal of plant and equipment (191) (96) (231) (191) (96)
Tax effect of above items 112 27 205 112 27
Headline earnings 68 529 60 042 124 594 75 493 66 714
Headline earning per ordinary share (cents) 16,1 14,1 29,3 17,7 15,7
Accounting requirements necessitated the recognition of the full 36 months' business interruption insurance proceeds in the year
ended 30 June 2014, 27 months of which related to future periods. Normalised results include the recognition of six months'
business interruption insurance proceeds in the current period.
Summarised segmental information
Revenue EBITDA
Unaudited Unaudited Audited Unaudited Unaudited Audited
6 months 6 months 12 months 6 months 6 months 12 months
ended ended ended ended ended ended
31 Dec 31 Dec 30 Jun 31 Dec 31 Dec 30 June
R'000 2015 2014 2015 2015 2014 2015
Records Management 295 330 253 217 545 217 80 825 65 568 145 224
CSX Customer Services 42 566 43 619 95 975 (477) 1 943 6 512
Property Companies 29 755 26 683 53 366 29 755 26 683 53 366
Other 42 495 44 576 70 992 11 584 8 985 13 324
Intergroup (35 459) (29 821) (63 652) – – –
Total 374 687 338 274 701 898 121 687 103 179 218 426
Operating profit Tangible assets
Unaudited Unaudited Audited Unaudited Unaudited Audited
6 months 6 months 12 months 6 months 6 months 12 months
ended ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec 30 June
R'000 2015 2014 2015 2015 2014 2015
Records Management 65 900 54 188 121 423 339 333 366 173 405 372
CSX Customer Services (772) 1 597 5 788 26 724 22 832 22 346
Property Companies 29 755 26 683 53 366 272 850 244 616 259 106
Other 8 078 5 638 6 213 95 932 88 270 56 555
Total 102 961 88 106 186 790 734 839 721 891 743 379
"Records Management" represents the global document storage and management and scanning business units which
are managed and operated geographically.
"Other" includes Metrofile Holdings, Rainbow Paper Management, Global Continuity and Cleardata.
Summarised statement of financial position
Unaudited Unaudited Audited
as at as at as at
31 Dec 31 Dec 30 June
R'000 Notes 2015 2014 2015
ASSETS
Non-current assets 688 925 640 299 660 262
Property 1 272 222 244 616 258 349
Plant and equipment 216 953 196 015 202 051
Goodwill 194 615 193 727 194 615
Long-term receivable 730 2 814 1 574
Deferred tax asset 4 405 3 127 3 673
Current assets 244 933 278 446 281 405
Inventories 17 333 17 258 14 549
Trade receivables 123 958 104 408 121 245
Other receivables 36 289 27 174 25 095
Taxation – 3 509 –
Bank balances 67 353 126 097 120 517
Total assets 933 858 918 745 941 667
EQUITY AND LIABILITIES
Equity and reserves 639 959 601 535 630 407
Equity attributable to owners
of the parent 624 964 590 332 617 520
Non-controlling interests 14 995 11 203 12 887
Non-current liabilities 165 386 187 836 175 160
Interest-bearing liabilities 2 140 552 169 081 156 125
Deferred taxation liability 24 834 18 755 19 035
Current liabilities 128 513 129 374 136 100
Trade and other payables 67 375 61 935 71 305
Deferred revenue 12 517 11 987 12 331
Bank overdraft – 589 49
Provisions 414 785 2 436
Taxation 884 – 2 616
Interest-bearing liabilities 2 47 323 54 078 47 363
Total equity and liabilities 933 858 918 745 941 667
Net asset value
per ordinary share (cents) 146,3 138,2 144,6
1. The majority of the group's properties have been pledged as security against certain loans to the
group.
2. Long-term interest-bearing liabilities represent the Metrofile (Pty) Ltd amortising and revolving
facilities. Short-term interest-bearing liabilities include the portions of the Metrofile (Pty) Ltd
amortising loan facility and Group company loan agreements payable within one year. The Metrofile
(Pty) Ltd borrowings are JIBAR linked, whilst the other borrowings are prime linked.
Summarised statement of cash flows
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 June
R'000 2015 2014 2015
Cash generated from operations before
net working capital changes 126 978 98 824 222 315
(Increase) decrease in net working capital (22 458) 37 171 38 211
Increase in normal net working capital (22 458) (26 863) (25 823)
Decrease (increase) in net normal
working capital due to insurance claim – 64 034 64 034
Cash generated from operations 104 520 135 995 260 527
Net finance costs paid (7 194) (5 759) (13 084)
Dividends declared (51 166) (33 859) (72 297)
Normal taxation paid (22 479) (31 991) (58 568)
Net cash inflow from operating activities 23 681 64 386 116 577
Net cash outflow from investing
activities:
Investment in property: expansion (12 965) (9 945) (6 354)
Investment in plant and equipment:
expansion (29 974) (17 334) (35 536)
Investment in property: replacement (907) (8 161) (17 322)
Investment in plant and equipment:
replacement (18 095) – (7 952)
Proceeds on disposal of property,
plant and equipment 759 1 006 1 684
Increase in shareholding of subsidiary
and acquisition of business – (22 061) (28 575)
Net cash outflow from financing
activities:
Loans repaid (15 614) (15 582) (35 253)
Loans drawn down – 97 919 97 919
Net (decrease) increase in cash and cash equivalents (53 115) 90 228 85 188
Cash and cash equivalents at the
beginning of the period 120 468 35 280 35 280
Cash and cash equivalents
at the end of the period 67 353 125 508 120 468
Represented by:
Bank balances 67 353 126 097 120 517
Bank overdrafts – (589) (49)
Summarised statement of changes in equity
Total equity
before
minority Non-
Stated Treasury Accumulated Other apportion- controlling
R'000 capital shares profit/(losses) reserves ment interest Total
Balance at 30 June 2014 573 494 – (21 889) 10 189 561 794 6 028 567 822
Shares issued in terms of share schemes 18 066 – 18 066 18 066
IFRS 2 Equity reserve relating
to share schemes 2 151 2 151 2 151
Share scheme settlement (12 474) (5 593) (18 067) (18 067)
Minority contribution on acquisition
of subsidiary 3 982 3 982
Dividends declared (33 859) (33 859) (33 859)
Total comprehensive income for the
period ended 31 December 2014 60 111 136 60 247 1 193 61 440
Balance at 31 December 2014 591 560 – (8 111) 6 883 590 332 11 203 601 535
IFRS 2 Equity reserve relating
to share schemes 2 419 2 419 2 419
Dividends declared (38 438) (38 438) (38 438)
Total comprehensive income for the
period ended 30 June 2015 64 509 (1 303) 63 206 1 684 64 890
Balance at 30 June 2015 591 560 – 17 960 7 999 617 519 12 887 630 406
Purchase of Treasury shares (9 577) (9 577) (9 577)
IFRS 2 Equity reserve relating
to share schemes 4 483 (2 910) 1 573 1 573
Share scheme settlement (1 833) (1 833) (1 833)
Dividends declared (51 250) (51 250) (51 250)
Total comprehensive income for the
period ended 31 December 2015 68 608 (76) 68 532 2 108 70 640
Balance at 31 December 2015 591 560 (9 577) 37 968 5 013 624 964 14 995 639 959
Commentary on the results
Profile
Metrofile is the market leader in both physical and digital
information and records management in Africa. The group
is represented in the six major provinces of South Africa,
Botswana, Mozambique, Nigeria, Zambia, the United Arab
Emirates, Qatar, Oman and, through subsidiary CSX Customer
Services, undertakes contracts in various other African countries.
The Metrofile Records Management division operates from
44 facilities, at 21 locations, covering more than 87 136 square
metres of warehousing and office space. In accordance with its
owner/lessee model, 68% of these facilities are owned by the
group. The rest of the group's divisions lease their premises. In
order to optimise operational efficiency, Metrofile has a long-term
target of owning approximately 70% of the properties from which
the Metrofile Records Management division operates.
Services include physical and digital 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 as 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. Metrofile is a black-owned company with black
ownership amounting to 53,36% whilst its largest shareholder
is its empowerment partner, Mineworkers Investment Company
("MIC") which owns 34,41% 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 and the Gulf Co-operation
Council States of the Middle East remains driven by the demand
for the similar services to those provided by the group in South
Africa. With Metrofile now established in Mozambique, Botswana,
Nigeria, Zambia, the United Arab Emirates, Qatar and Oman,
the group's expansion strategy continues to take cognisance of
potential target countries' business and political environment,
governance, market attractiveness, language, infrastructure,
logistics, education and labour force, potential client industries
and overall risk.
The group has maintained its dividend cover of 1,5 times for the
2016 reporting period and continually reviews this position.
Financial review
IFRS required that 36 months' business interruption insurance
proceeds relating to a fire at a facility in 2013 be recognised in
full in the 2014 financial year. Normalised results are accordingly
presented again, recognising this receipt over 36 months in order
to present more representative results for each affected reporting
period.
Normalised revenue increased by 10,5% to R384,3 million.
Normalised headline earnings increased by 13,2% to
R75,5 million.
Both normalised basic earnings per share ("EPS") and normalised
headline earnings per share ("HEPS") increased by 12,7% to
17,7 cents.
Cash generated from operations before net working capital
changes increased by 28,5% whilst the cash generated from
operations decreased by 23,1%.
Capital investments of R61,9 million were effected mainly for
expansion and included the development of a new facility in
Mbombela, and the purchase of racking and equipment of
R30 million required for growth.
Basis of preparation and accounting policies
The group results have been prepared, under the supervision
of Mr MC McGowan, CA(SA). The summarised financial
information has been prepared in accordance with the framework
concepts and measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the SAICA
Financial Reporting Guidelines and AC 500 Standards as issued
by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the 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 2015.
Certain accounting pronouncements became effective during the
current financial year; however, these do not have an impact on
either transactions or disclosures.
Related parties
In terms of a consulting agreement, and as approved at the
Annual General Meeting, the MIC fees of R0,72 million (2015:
R0,67 million) were paid during the period under review.
Directorate and corporate governance
The Board currently comprises of three executive and six non-
executive directors, of whom four are independent directors.
Mr IN Matthews remains the lead independent director. On
1 February 2016, Mr PG Serima was appointed to the Board as
CEO Designate to Mr GD Wackrill, whose resignation as CEO is
effective 31 March 2016. Mr Wackrill will remain on the Board in
a non-executive capacity from this date.
Dividends
The Board has continued the strategy to continuously improve
dividends whilst ensuring that they are sustainable and reviews
the cover periodically. Continued strong cash-generation has
allowed the group to maintain its current target dividend cover
of 1,5 times.
Notice is hereby given that an interim gross cash dividend of
11,0 cents per share in respect of the period ended 31 December
2015 has been declared payable, from income reserves, to the
holders of ordinary shares recorded in the books of the Company
on Friday, 8 April 2016. The last day to trade cum-dividend will
therefore be Friday, 1 April 2016 and Metrofile shares will trade
ex-dividend from Monday, 4 April 2016. Payment of the dividend
will be made on Monday, 11 April 2016. Share certificates may
not be dematerialised or rematerialised between Monday,
4 April 2016 and Friday, 8 April 2016, 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 9,35 cents per
share. The Company's issued share capital is 427 084 010
shares and the Company's tax number is 9375/066/71/0.
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
R68,2 million for the next five years. Capital investment plans for
the full financial year amount to R89,9 million.
Events after the reporting date
In continuance with its bolt-on geographical acquisition strategy,
the group acquired interests in the following entities subsequent
to the reporting period and before the date of this report:
- 100% shareholding in Document Bank Botswana (Botswana);
- 49% shareholding in Al Bidda Metrofile LLC (Qatar);
- 40% shareholding in Lexie Legal Services (Pty) Ltd (South
Africa);
- 51% shareholding in E-File Teejan LLC via E-File Masters LLC
(Oman).
Outlook
Whilst acknowledging the local economic challenges impacting
the South African business environment, Metrofile expects to
increase its headline earnings per share for the full year. The
Group will also continue to seek growth opportunities across
Africa and the Middle East, to entrench its position as a market
leader in cradle to grave document management solutions.
This statement has not been reviewed or audited by Metrofile's
auditors.
Christopher Seabrooke Graham Wackrill
Non-Executive Chairman Chief Executive Officer
29 February 2016
Senderwood
Gauteng
Corporate information
Registered office
41 Wordsworth Avenue
Senderwood
Bedfordview
2007
www.metrofileholdings.com
Sponsor
The Standard Bank of South Africa Limited
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Directors
CS Seabrooke#* (Chairman)
MS Bomela* (Deputy Chairperson)
GD Wackrill (CEO)
PG Serima (CEO Designate)
MC McGowan (CFO)
P Langeni#*
IN Matthews†*
CN Pongweni*
SV Zilwa#*
† Lead independent
# Independent
* Non-executive
Company Secretary
P Atkins
Date: 29/02/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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