Wrap Text
Audited Group Results for the year ended 30 June 2012
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")
Audited group results for the year ended 30 June 2012
- Revenue up 14%
- EBITDA up 17%
- EPS and HEPS up 20%
- DPS up 67%
Condensed income statement
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 Note 2012 2011
Revenue 523 731 460 552
Earnings before interest, taxation and
depreciation and amortisation (EBITDA) 171 085 146 200
Depreciation (23 184) (19 076)
Operating profit before finance costs 147 901 127 124
Net finance costs (21 026) (23 642)
Finance income 2 301 1 588
Finance costs (23 327) (25 230)
Profit before taxation 126 875 103 482
Taxation 1 (35 729) ( 29 541)
Profit for the year 91 146 73 941
Attributable to:
Owners of the parent 89 471 73 874
Non-controlling interests 1 675 67
Attributable profit 91 146 73 941
Further information
Number of ordinary shares in issue ('000) 416 170 408 085
Weighted average number of ordinary shares
in issue ('000) 411 731 408 085
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 21,7 18,1
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 21,5 18,1
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 21,7 18,1
Dividend per ordinary share
Interim divided per ordinary share paid (cents) 3,0 2.0
Final dividend per ordinary share
proposed/paid (cents) 4,5 2,5
Condensed statement of comprehensive income
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 Note 2012 2011
Profit for the year 91 146 73 941
Other comprehensive income for the year
net of tax (621) 103
Hedge accounting for fair value on
interest rate swaps 2 (751) (542)
Currency movement on translation of
foreign subsidiary 130 645
Total comprehensive income for the year 90 525 74 044
Attributable to:
Owners of the parent 88 786 73 731
Non-controlling interests 1 739 313
Condensed statement of financial position
Audited Audited
as at as at
30 June 30 June
R'000 Note 2012 2011
ASSETS
Non-current assets 508 744 485 572
Property, plant and equipment 335 699 313 094
Goodwill 171 666 169 943
Deferred tax asset 1 379 2 535
Current assets 149 087 120 834
Inventories 15 556 12 343
Trade receivables 79 526 66 144
Other receivables 6 515 4 637
Taxation 1 524
Bank balances 45 966 37 710
Total assets 657 831 606 406
EQUITY AND LIABILITIES
Equity and reserves 385 254 310 443
Equity attributable to owners of the parent 382 803 308 800
Non-controlling interests 2 451 1 643
Non-current liabilities 180 191 208 154
Interest-bearing liabilities 2 168 485 198 734
Deferred taxation liability 11 706 9 420
Current liabilities 92 386 87 809
Trade and other payables 48 562 49 710
Deferred revenue 11 686 10 000
Bank overdraft 42 129
Provisions 1 939 1 779
Taxation 515
Interest-bearing liabilities 2 30 157 25 676
Total equity and liabilities 657 831 606 406
Net asset value per ordinary share (cents) 91,8 75,7
Notes:
1. The taxation charge includes Secondary Taxation on Companies amounting to R2,3 million (30 June 2011:
R0,8 million).
2. Long-term interest-bearing liabilities include the Metrofile (Pty) Ltd amortising and bullet loans which have a
remaining 45-month tenure as well as loan agreements entered into by Cleardata (Pty) Ltd in order to finance
mobile shredding units. Short-term interest-bearing liabilities include the portions of the Metrofile (Pty) Ltd
amortising loan and Cleardata loan agreements payable within one year. The total group's borrowings are
70% hedged (30 June 2011: 75%). The Metrofile (Pty) Ltd borrowings are JIBAR linked and were 74% hedged
by way of the interest rate swaps at the year-end (30 June 2011: 80%), whilst the Cleardata (Pty) Ltd borrowings
are prime linked and unhedged.
3. The majority of the group's assets have been pledged as security against certain loans to the group.
Reconciliation of headline earnings
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 2012 2011
Profit attributable to owners of the parent 89 471 73 874
Profit on sale of plant and equipment (24) (279)
Tax effect of above items 7 78
Headline earnings 89 454 73 673
Headline earnings per ordinary share (cents) 21,7 18,1
Condensed 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 2012 2011 2012 2011
Metrofile Records Management 416 212 366 874 115 568 98 847
CSX Customer Services 72 156 70 270 8 420 7 040
Property Companies 39 145 34 867
Other 45 627 31 237 7 952 5 446
Inter-group (10 264) (7 829)
Total 523 731 460 552 171 085 146 200
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 2012 2011 2012 2011
Metrofile Records Management 97 059 83 407 240 228 199 674
CSX Customer Services 7 870 6 565 26 887 26 564
Property Companies 39 145 34 867 179 442 179 442
Other 3 827 2 285 39 608 30 783
Total 147 901 127 124 486 165 436 463
"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 R21,1 million of the total R23,3 million charge
relates to Metrofile (Pty) Ltd which encompasses the "Metrofile Records Management" and "CSX Customer Services"
divisions; the balance of the finance costs relate to Cleardata (Pty) Ltd.
Condensed statement of cash flows
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 2012 2011
Cash generated from operations before net
working capital changes 172 914 149 365
(Increase)/decrease in net working capital (17 775) 810
Cash generated from operations 155 139 150 175
Net finance costs paid (21 026) (23 642)
Dividends declared (22 608) (8 162)
Normal taxation paid (34 325) (29 229)
Net cash inflow from operating activities 77 180 89 142
Net cash outflow from investing activities:
Investment in property, plant and
equipment: expansion (35 201) (38 164)
Investment in property, plant and
equipment: replacement (8 517) (8 261)
Proceeds on disposal of property,
plant and equipment 945 1 008
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 (26 064) (32 935)
Loans raised 13 000
Net increase in cash and cash equivalents 8 343 23 790
Cash and cash equivalents
at the beginning of the year 37 581 13 791
Cash and cash equivalents
at the end of the year 45 924 37 581
Bank balances 45 966 37 710
Bank overdrafts (42) (129)
Condensed 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 2010 2 508 518 817 (280 856) 460 240 929 1 330 242 259
IFRS 2: Equity
Reserve relating
to share
schemes 2 302 2 302 2 302
Dividends declared
and paid (8 162) (8 162) (8 162)
Total comprehensive
income for the
year ended
30 June 2011 73 874 (143) 73 731 313 74 044
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
shareholding 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
and paid (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
Commentary on results
Profile
Metrofile is the market leader in information and records storage management in Africa and is represented in the six major
provinces of South Africa, Mozambique and through the CSX Customer Services brand has contracts in numerous other
African countries. Metrofile operates from 28 facilities covering more than 89 000 square metres of warehousing and office
space and manages more than 21 billion records on behalf of its customers. In accordance with its owner/lessee model,
56% of its facilities are owned by the group.
Services include: Active Records Management, Image Processing, Hosting, Data Backup (both vault and on-line), Archive
Storage and Management, 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. With the acquisition, in March 2012, of the business Global Continuity SA, the group can now offer its
customers business and IT continuity services which complement its existing Data Protection offerings.
Metrofile has been listed on the JSE Ltd ("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 34,7% 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 storage and management of documents, records and data as well as the controlled
and timely access thereof assists clients not only with their archiving and record-keeping requirements but also their risk
mitigation and legal compliance.
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. Metrofile is now established in Mozambique, is committed to commencing operations in
Nigeria in partnership with G4S and will expand into other African countries once the Nigerian business is operational.
Financial review
Revenue increased by 13,7% to R524 million, EBITDA by 17,0% to R171 million and EBIT by 16,3% to R148 million. Cash
generation and working capital management remained positive with increases in inventory and accounts receivable being
in line with expectations. Net finance costs reduced by 11% in line with the continued reduction in the group's debt level. Net
debt: equity reduced to 40,0% (June 2011: 60,5%).
Diluted earnings per share ("EPS") and headline earnings per share ("HEPS") increased by 20% to 21,7 cents (2011: 18,1 cents)
whilst the total dividend per share increased by 67% to 7,5 cents (2011: 4,5 cents).
The increase in capital expenditure is mainly for expansion and includes racking of R30,0 million required for growth. Due to
the favourable interest rates, commodity prices and the group's increased borrowing capacity, Metrofile intends to accelerate
its capital expenditure programme, in respect of new buildings, in the 2013 financial year and will reduce its planned
investment in the 2014 financial year accordingly.
During the year Metrofile acquired the business of Global Continuity SA and a further 15% of Cleardata (Pty) Ltd. These
acquisitions were made by way of vendor placements which resulted in a further 4 million shares being issued. The table
below represents the fair value of net assets, acquired at acquisition, for the investment in Global Continuity SA:
Rm
Property, plant and equipment 3,1
Current assets 1,0
Bank balances 1,3
Current liabilities (3,3)
Net asset value acquired 2,1
Paid by way of vendor placements 3,8
Net asset value acquired (2,1)
Goodwill 1,7
Metrofile accounts for its property portfolio on a cost basis. During the current reporting period there were no additions to the
portfolio. The properties will be valued before the calendar year-end and the value reported with the group's interim results.
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr RM Buttle, CA(SA).The abridged financial information has
been prepared in accordance with the framework concepts and measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the AC 500 standards as issued by the Accounting Practices Board, 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 2011.
Certain accounting pronouncements became effective during the current financial year; however these do not have an impact
on either transactions or disclosures.
Audit opinion
The independent auditors, Deloitte & Touche, have issued their opinion on the group's financial statements for the
30 June 2012 year-end. The audit was conducted in accordance with International Standards on Auditing. They have issued
an unmodified audit opinion. These abridged provisional 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 their audit report
is 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 the consulting agreement with MIC fees of R1,00 million (2011: R0,84 million) were paid during the year under
review.
Directorate and corporate governance
Messrs Paul Nkuna and Roy Midlane resigned from the Board of Directors ("the Board") in March 2012. Their services to the
group were much appreciated.
Ms Phumzile Langeni joined the Board and was appointed to the Audit, Risk and Governance Committee and the Social,
Ethics and Transformation Committee at that time.
Mrs Mary Bomela, the new CEO of MIC and an existing non-executive director, replaced Mr Nkuna as the Deputy
Chairperson of the Board, joined the Nomination and Remuneration Committee and Chairs the Social, Ethics and
Transformation Committee. Mr Nigel Matthews was appointed as lead independent director with effect from 1 July 2012.
The Board now comprises two executive and six non-executive directors, of whom four are independent directors.
Dividends
The improvements in the group's financial structure and cash flows have enabled the Board to lower the dividend cover, for
the full year, from 4,15 times in the comparative year to 3,10 times for the current year whilst simultaneously reducing net debt.
Notice is hereby given that a final gross cash dividend of 4,5 cents per share in respect of the year ended 30 June 2012 has
been declared payable to the holders of ordinary shares recorded in the books of the Company on Friday, 5 October 2012.
The last day to trade cum-dividend will therefore be Friday, 28 September 2012 and Metrofile shares will trade ex-dividend
from Monday, 1 October 2012. Payment of the dividend will be made on Monday, 8 October 2012. Share certificates may
not be dematerialised or rematerialised between Monday, 1 October 2012 and Friday, 5 October 2012, 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 3,825 cents per share. The Company's issued share capital remains
unchanged since between the year-end 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 premised to ensure the continued availability
of space to meet expansionary demand relative to the cost of unutilised facilities. Owned premises comprised 50 000 square
metres and leased premises 38 900 square metres at year-end.
Operating lease commitments amount to R52 million for the next five years. Capital expansions for the 2013 financial year are
budgeted to be R34 million excluding any building development.
Events after the reporting date
There have been no material events after the reporting date.
Outlook
Being a trusted brand with expanding services and a stable, non-cyclical, business model Metrofile is well-positioned to
continue its growth in revenue, EBITDA, earnings and dividends in the year ahead.
This forecast has not been reviewed or audited by Metrofile's auditors.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
30 August 2012
Cleveland
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*, IN Matthews#
N Medupe#, CP Coutts-Trotter**
Registered office:
3 Gowie Road, The Gables, Cleveland Lead independent
Johannesburg, 2094 #Independent
www.metrofileholdings.com *Non-executive
**Alternate to CS Seabrooke
Sponsor: Company Secretary:
The Standard Bank of South Africa Limited P Atkins
Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Date: 30/08/2012 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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