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OLG - OneLogix Group Limited - Unaudited condensed interim results for the six

Release Date: 20/02/2012 07:38
Code(s): OLG
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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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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