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OneLogix - Audited annual financial results for the year ended 31 May 2006
OneLogix Group Limited
(Registration number 1998/004519/06)
Share Code: OLG
ISIN Code: ZAE000026399
("OneLogix" or "the group")
AUDITED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 MAY 2006
HIGHLIGHTS
* REVENUE UP 58%
* HEPS UP 15%
* OPERATING PROFIT UP 16%
* CASH GENERATED FROM OPERATIONS UP 83%
Condensed Consolidated Income Statement
Restated
Audited Audited
Year Year
ended ended
31 May 31 May
2006 2005
R"000 R"000
Revenue 167 890 106 142
Operating and administration costs 142 525 84 276
Depreciation and amortisation 5 360 4 589
Operating profit 20 005 17 277
Share of associate loss - 156
Finance income (240) (40)
Finance costs 2 027 978
Profit before taxation 18 218 16 183
Taxation 2 377 2 526
Net profit 15 841 13 657
Attributable to:
- Minority interest 460 326
- Equity holders of the company 15 381 13 331
Net profit 15 841 13 657
Number of shares in issue ("000):
- Total 197 273 192 780
- Weighted 197 273 196 940
Basic and headline earnings per share
(cents)
- Basic and fully diluted 7,8 6,8
SEGMENTAL ANALYSIS
Revenue
Logistics 149 923 90 629
Services 17 967 15 513
167 890 106 142
Operating profit
Logistics 21 480 16 970
Services 4 448 4 187
Corporate (5 923) (3 880)
20 005 17 277
Commitments
Operating lease commitments (not 827 1 914
exceeding five years)
The group has authorised capital expenditure over the next twelve months of R33
million. R19 million is already committed.
Condensed Consolidated Cash Flow Statement
Audited Audited
Year Year
ended ended
31 May 31 May
2006 2005
R"000 R"000
Net cash generated from operations 21 107 11 517
Net cash flows from investing activities (38 350) (19 427)
Net cash flows from financing activities 17 548 7 097
Net increase/(decrease) in cash 305 (813)
resources
Cash resources at beginning of year 6 070 6 883
Cash resources at end of year 6 375 6 070
Condensed Consolidated Statement of Changes in Equity
Share Share Retained Minority
capital premium income interests Total
At 1 June 2004 1 921 31 871 (2 945) - 30 847
Pre-acquisition - - - (127) (127)
reserves
New shares issued 52 748 - - 800
less expenses
Net profit - - 13 331 326 13 657
At 31 May 2005 1 973 32 619 10 386 199 45 177
Share issue expenses - (135) - - (135)
Net profit - - 15 381 460 15 841
At 31 May 2006 1 973 32 484 25 767 659 60 883
Condensed Consolidated Balance Sheet
Restated
Audited Audited
At At
31 May 31 May
2006 2005
R"000 R"000
ASSETS
Non-current assets 84 113 50 538
Property, plant and equipment 63 661 30 827
Intangible assets 19 919 19 711
Loans and receivables 533 -
Current assets 33 440 27 180
Inventories 2 310 1 875
Trade and other receivables 24 755 19 235
Cash resources 6 375 6 070
Total assets 117 553 77 718
EQUITY AND LIABILITIES
Equity 60 883 45 177
Ordinary shareholders" funds 60 224 44 978
Minority interests 659 199
Liabilities
Non-current liabilities 28 648 14 033
Interest-bearing borrowings 24 381 10 708
Deferred tax 4 267 3 325
Current liabilities 28 022 18 508
Trade and other payables 17 287 13 681
Interest-bearing borrowings 8 765 4 578
Taxation 1 970 249
Total equity and liabilities 117 553 77 718
Net asset value per share (cents) 30,5 23,3
Net tangible asset value per share 20,4 13,1
(cents)
Transition to International Financial
Reporting Standards
Reconciliation of previous SA GAAP and IFRS
At At
1 June 1 June
2005 2004
Reconciliation of equity Note R"000 R"000
As reported under SA GAAP 40 448 26 503
Adjusted for:
Fair value adjustment to property, 2 6 462 6 462
plant and equipment
Depreciation 4 196 -
Leases 6 (278) (343)
Deferred taxation (1 850) (1 775)
As reported under IFRS 44 978 30 847
Year
Ended
31 May
2005
Reconciliation of net profit R"000
As reported under SA GAAP 13 471
Adjusted for:
Depreciation 4 196
Leases 6 65
Taxation (75)
As reported under IFRS 13 657
COMMENTS
The directors of OneLogix Group Limited ("OneLogix" or "the group") are pleased
to present the audited results for the year ended 31 May 2006 ("the year").
Basis of presentation, accounting policies and notes
The results for the year and comparative information have been prepared in terms
of International Financial Reporting Standards ("IFRS") applicable at 31 May
2006 and comply with the relevant sections of the Companies Act in South Africa.
The results have been audited by PricewaterhouseCoopers Inc, and their
unqualified audit opinion is available for inspection at the registered office
of OneLogix.
The OneLogix transition date is 1 June 2004 ("the transition date"). The annual
financial statements for the year are the group"s first consolidated IFRS-
compliant annual financial statements. The disclosures required by IFRS 1 -
First-time adoption of International Financial Reporting Standards concerning
the transition from South African Statements of Generally Accepted Accounting
Practice ("SA GAAP") to IFRS and the required changes in accounting policies are
presented under the heading "Transition to International Financial Reporting
Standards - Reconciliation of previous SA GAAP and IFRS".
IFRS 1 - First-time adoption of IFRS
At the transition date, IFRS allows a number of exemptions to the retrospective
application principle. The group has elected the following exemptions available
under IFRS 1:
1. Business combinations: the group adopted IFRS 3 - Business Combinations, from
1 June 2004 and accordingly no adjustments were required;
2. Property, plant and equipment: As a first time adopter the group elected to
fair value its fleet of vehicles and trailers. The effect of the adjustment is
disclosed under "Reconciliation of Equity"; and
3. Share-based payments: The group has elected to apply the share-based payments
exemption. It applied IFRS 2 - Share-based Payments from 1 June 2004 to those
options that were issued after 7 November 2002 but which had not vested by 1
January 2005. No options were issued during this period and hence no charge was
incurred.
Other adjustments as a result of the adoption of IFRS
The impact of other adjustments as a result of adopting IFRS is summarised
below. The quantification of the adjustments is shown in the reconciliation of
equity and net profit.
4. Where parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items of property, plant and
equipment. Residual values and useful lives of all assets are reassessed
annually. This more robust assessment has resulted in an increase in estimated
useful lives of property, plant and equipment, and accordingly the depreciation
charged to the income statement has reduced for the year ended 31 May 2006 and
the year ended 31 May 2005;
5. Goodwill, which was previously amortised, is tested annually for impairment
and carried at cost less accumulated impairment losses; and
6. Operating lease charges are now accounted for on a straight-line basis.
Previously operating lease charges were expensed on a cash flow basis as
incurred. This has resulted in higher lease costs in previously reported periods
and a reduction of lease costs for the year ended 31 May 2006 and the year ended
31 May 2005.
Review of operations
The group"s businesses continued to perform well:
Vehicle Delivery Services ("VDS") continued to dominate the buoyant cross-border
auto-logistics market. Continued investment in fleet expansion, vehicle tracking
software and IT systems has been supported by investment in land and
improvements at the Pomona premises and new facilities in Durban, as announced
on 14 March 2006. Together with high levels of efficiency within the business,
these factors have further established VDS as a local market operator as well.
Media Express ("ME") managed to retain a substantial market share in the price
sensitive niche of express printed media delivery. ME has also begun to move
successfully into aligned niche markets. With a strengthened management team, an
improved performance from ME is expected in the period ahead.
PostNet, a franchised retail chain of 215 business service outlets with a
predominant courier offering, operates in the growth market of small to medium
enterprises. The development of strong management and successful introduction of
new product and service initiatives are beginning to yield benefit.
Consequently, expectations of future performance remain promising.
4Logix and Gijima are relatively high revenue, low margin businesses that offer
logistics solutions for the rail of bulk commodities to ports throughout South
Africa. A number of long-term contracts continue to drive a particularly good,
sustainable performance.
BEE
As announced on 30 August 2005, 25% of the group"s major operating subsidiary
was acquired by a consortium including Sipho Pityana"s Izingwe Capital (Pty)
Limited and the group"s BEE Staff Trust. The group"s shareholders ratified the
transaction on 22 November 2005. The strategic BEE transaction has been
successfully implemented and the group looks forward to a long, mutually
beneficial relationship with its new partners.
Financial results
Revenue for the group increased by 58% from R106 million to R168 million.
Operating profit grew by 16% to R20 million, representing approximately 12% of
revenue. Headline earnings per share rose by 15% from 6,8 cents per share to 7,8
cents per share.
The increase in revenue can be attributed largely to the consolidation of 4Logix
with effect from 1 December 2004, as well as the higher revenue generated by VDS
from its expansion into the local market.
Operating profit included a once-off cost of approximately R0,75 million
relating to the implementation of the group"s BEE transaction (see `BEE") above.
The reduced effective tax rate of 13% (2005: 16%) was as a result of once-off
learnership allowances claimed and a release of a deferred tax provision no
longer required in the year under review. The group expects the effective tax
rate to return to approximately 29% going forward.
Despite the increased working capital requirements commensurate with growth in
revenue, cash generated from operations increased from R11,5 million to R21,1
million which again underpinned headline earnings. The group invested a total
of R38,3 million in infrastructure, mainly in VDS, to expand operations.
Infrastructure spend was financed by cash generated from operations and a R17,5
million increase in interest-bearing borrowings.
Prospects
Each company within the group has built strong management. This, together with
attractive product and service offerings within high growth niche markets, will
enable organic growth to generate sustainable profits for the group over the
long term. In addition, OneLogix will continue to explore acquisitive
opportunities that complement its niche, cash generative businesses.
People
We are satisfied that OneLogix is developing a management team equipped with
appropriate skills to steer the group"s continued growth. OneLogix thanks its
management, employees and PostNet business partners as well as its customers,
business advisors and shareholders for their continued support.
Dividend
In line with group policy no dividend has been declared for the year.
By order of the Board
Ian Lourens (CEO) Cameron McCulloch (FD)
30 August 2006
Warning: The listing of the ordinary shares in the company is on AltX.
Shareholders are advised of the risks of investing in a company listed on AltX.
Shareholders are advised that the JSE does not guarantee the viability or the
success of a company listed on AltX. In terms of the JSE Listings Requirements a
designated advisor has to be retained by the company. The designated advisor is
required to, inter alia, attend all board meetings held by the company to ensure
that all JSE Listings Requirements and applicable regulations are complied with,
approve the financial director of the company and guide the company in a
competent, professional and impartial manner. If the company fails to retain the
designated advisor it must make arrangements to appoint a new designated advisor
within 10 business days, failing which the company faces suspension of trading
of its securities. If a designated advisor is not appointed within 30 days of
its suspension the company faces the termination of its listing without an offer
to minority shareholders.
Directors:
SM Pityana (Chairman)*, NJ Bester, AC Brooking*, AJ Grant*#, IK Lourens (CEO), T
Matshazi*, CV McCulloch (FD), JG Modibane*#
* Non-executive director # independent director
Registered office:
46 Tulbagh Road, Pomona, Kempton Park
(P O Box 85392, Emmarentia, 2029)
Company Secretary:
Probity Business Services (Proprietary) Limited,
Third Floor, JHI House,
11 Cradock Avenue, Rosebank, 2196
Transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited,
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(P O Box 61051, Marshalltown, 2107)
Date: 30/08/2006 09:00:27 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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