Wrap Text
Unaudited Group results for the six months ended 31 December 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")
UNAUDITED GROUP RESULTS
for the six months ended 31 December 2012
- Revenue up 11,5% - HEPS up 18,8%
- Interim dividend up 50,0% - Cash generated from operations up 42,9%
Condensed income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 Note 2012 2011 2012
Revenue 281 724 252 593 523 731
Earnings before interest, taxation,
depreciation and amortisation
(EBITDA) 90 142 81 621 171 085
Depreciation (13 095) (10 879) (23 184)
Operating profit before finance costs 77 047 70 742 147 901
Net finance costs (8 696) (11 305) (21 026)
Finance income 1 455 706 2 301
Finance costs (10 151) (12 011) (23 327)
Profit before taxation 68 351 59 437 126 875
Taxation 1 (17 245) (17 032) (35 729)
Profit for the period 51 106 42 405 91 146
Attributable to:
Owners of the parent 50 353 41 564 89 471
Non-controlling interests 753 841 1 675
Profit for the period 51 106 42 405 91 146
Further information
Number of ordinary shares in issue
(thousands) 420 253 412 168 416 170
Weighted average number of
ordinary shares in issue
(thousands) 417 736 409 741 411 731
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 12,1 10,1 21,7
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 12,0 10,1 21,5
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 12,0 10,1 21,7
Dividend per ordinary share
Interim dividend per ordinary share
proposed/paid (cents) 4,5 3,0
Final dividend per ordinary share
paid (cents) 4,5
Condensed statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 2012 2011 2012
Profit for the period 51 106 42 405 91 146
Other comprehensive income
for the period net of tax 1 030 (864) (621)
Hedge accounting for fair value
on interest rate swaps 453 (990) (751)
Currency movement on translation
of foreign subsidiary 577 126 130
Total comprehensive income
for the period 52 136 41 541 90 525
Attributable to:
Owners of the parent 51 100 40 638 88 786
Non-controlling interests 1 036 903 1 739
Condensed statement of financial position
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
R'000 Note 2012 2011 2012
ASSETS
Non-current assets 528 478 500 998 508 744
Property, plant and equipment 355 392 329 139 335 699
Goodwill 171 666 169 943 171 666
Deferred tax asset 1 420 1 916 1 379
Current assets 150 462 122 503 149 087
Inventories 13 115 14 802 15 556
Trade receivables 82 487 74 408 79 526
Other receivables 9 610 8 484 6 515
Taxation 1 524
Bank balances 45 250 24 809 45 966
Total assets 678 940 623 501 657 831
EQUITY AND LIABILITIES
Equity and reserves 420 602 343 169 385 254
Equity attributable to owners of the parent 417 115 340 623 382 803
Non-controlling interests 3 487 2 546 2 451
Non-current liabilities 166 588 197 689 180 191
Interest-bearing liabilities 2 152 114 186 150 168 485
Deferred taxation liability 14 474 11 539 11 706
Current liabilities 91 750 82 643 92 386
Trade and other payables 47 385 46 702 48 562
Deferred revenue 10 991 9 600 11 686
Bank overdraft 42
Provisions 249 56 1 939
Taxation 1 572 101
Interest-bearing liabilities 2 31 553 26 184 30 157
Total equity and liabilities 678 940 623 501 657 831
Net asset value per ordinary share (cents) 99,3 82,6 91,8
Notes:
1 The taxation charge, in the current period, includes no Secondary Taxation on Companies due to the change to
Withholding tax (30 June 2012: R2,3 million and 31 December 2011: R1,0 million).
2 Long-term interest-bearing liabilities include the Metrofile (Pty) Limited amortising and bullet loans which have
a remaining 39-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 (Pty) Limited loan agreements payable within one year. The Metrofile
(Pty) Limited borrowings are JIBAR linked and were 59% hedged by way of the interest rate swaps at the
period-end (30 June 2012: 74%), whilst the Cleardata (Pty) Limited borrowings are prime linked and uncovered.
3 The majority of the group's assets have been pledged as security against certain loans to the group.
Reconciliation of headline earnings
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 2012 2011 2012
Profit attributable to owners of the parent 50 353 41 564 89 471
Profit on sale of plant and equipment (87) (47) (24)
Tax effect of above item 24 13 7
Headline earnings 50 290 41 530 89 454
Headline earning per ordinary share (cents) 12,0 10,1 21,7
Condensed 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 December 31 December 30 June 31 December 31 December 30 June
R'000 2012 2011 2012 2012 2011 2012
Metrofile Records
Management 231 788 199 702 416 212 65 249 54 109 115 568
CSX Customer
Services 31 211 35 166 72 156 68 4 306 8 420
Property Companies 21 137 19 573 39 145 21 137 19 573 39 145
Other 24 149 21 980 45 627 3 688 3 633 7 952
Inter-group (26 561) (23 828) (49 409)
Total 281 724 252 593 523 731 90 142 81 621 171 085
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 December 31 December 30 June 31 December 31 December 30 June
R'000 2012 2011 2012 2012 2011 2012
Metrofile Records
Management 54 799 45 503 97 059 255 100 207 010 240 228
CSX Customer
Services (235) 4 043 7 870 21 249 24 697 26 887
Property Companies 21 137 19 573 39 145 190 126 179 348 179 442
Other 1 346 1 623 3 827 40 799 42 502 39 608
Total 77 047 70 742 147 901 507 274 453 557 486 165
"Metrofile Records Management" represents the Metrofile records 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 R9,5 million of the total R10,2 million charge
relates to Metrofile (Pty) Limited which encompasses the "Metrofile Records Management" and "CSX Customer
Services" divisions; the balance of the finance costs relate to Cleardata (Pty) Limited.
Condensed statement of cash flows
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 2012 2011 2012
Cash generated from operations before
net working capital changes 96 337 80 374 172 914
Increase in net working capital (7 175) (17 978) (17 775)
Cash generated from operations 89 162 62 396 155 139
Net finance costs paid (8 696) (11 305) (21 026)
Dividends declared (18 728) (10 203) (22 608)
Normal taxation paid (14 470) (14 708) (34 325)
Net cash inflow from operating activities 47 268 26 180 77 180
Net cash outflow from investing activities:
Investment in property, plant and
equipment: expansion (29 480) (23 745) (35 201)
Investment in property, plant and
equipment: replacement (3 833) (3 817) (8 517)
Proceeds on disposal of property,
plant and equipment 304 685 945
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 (14 975) (12 075) (26 064)
Loans raised
Net (decrease)/increase in cash and cash equivalents (716) (12 772) 8 343
Cash and cash equivalents at the beginning
of the period 45 966 37 581 37 581
Cash and cash equivalents at the end of the period 45 250 24 809 45 924
Represented by:
Bank balances 45 250 24 809 45 966
Bank overdrafts (42)
Condensed statement of changes in equity
Total
equity
before
Accumu- minority Non-
Share Share lated Other apportion- controlling
R'000 capital premium losses reserves ment interest Total
Balance at 30 June 2011 2 508 518 817 (215 144) 2 619 308 800 1 643 310 443
Shares issued in terms
of share schemes 25 9 774 9 799 9 799
IFRS 2 Equity Reserve
relating to share schemes 1 388 1 388 1 388
Share scheme settlement (7 593) (2 206) (9 799) (9 799)
Dividends declared
and paid (10 203) (10 203) (10 203)
Total comprehensive
income for the period
ended 31 December 2011 41 564 (926) 40 638 903 41 541
Balance at
31 December 2011 2 533 528 591 (191 376) 875 340 623 2 546 343 169
Shares issued in terms
of vendor placements
for acquisitions 25 11 275 11 300 11 300
Increase in shareholding
of Cleardata in Cleardata
to 70% (6 569) (6 569) (931) (7 500)
IFRS 2 Equity Reserve
relating to share schemes 1 706 1 706 1 706
Dividends declared
and paid (12 405) (12 405) (12 405)
Total comprehensive
income for the period
ended 30 June 2012 47 907 241 48 148 836 48 984
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 1 940 1 940 1 940
Share scheme settlement (13 662) (2 382) (16 044) (16 044)
Dividends declared
and paid (18 728) (18 728) (18 728)
Total comprehensive
income for the period
ended 31 December 2012 50 353 747 51 100 1 036 52 136
Balance at
31 December 2012 2 583 555 885 (144 480) 3 127 417 115 3 487 420 602
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 and through the CSX Customer Services brand
has contracts in numerous other African countries. Metrofile operates from 30 facilities covering 93 500 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, 53,5% of its facilities are owned by the group.
Services include Active Records Management, Image Processing, Hosting, Data backup (both vault and online),
Archive Storage & 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 Global Continuity the group also can now
offer its customers business and IT continuity services which complement its existing Data Protection offerings.
Metrofile has been listed on the JSE Limited ("JSE") since 1995 and its ordinary shares are quoted in the "Support
Services" sector. Its largest shareholder is its empowerment partner, Mineworkers Investment Company ("MIC"),
which owns 34,3% of Metrofile's equity.
Strategy
Metrofile remains focused on cross-selling the group's diverse range of solutions and services to both new and
existing customers. The group is well positioned to partner with its customers with regard to good record keeping,
legal compliance and risk mitigation. Acquisitions and innovation remain components of the group's growth strategy.
Metrofile Mozambique has continued to expand and has recently moved into additional premises to facilitate future
growth. Metrofile has amended its strategy with regards to Nigeria due to differing strategic plans of Metrofile and
G4S and, as such, the joint venture has by mutual agreement been terminated. Metrofile remains committed to its
African expansion.
Financial review
Revenue increased by 11,5% to R281,7 million and EBITDA by 10,4% to R90,1 million. Cash generation from
operations of R89,2 million represents a 42,9% growth on the comparative period and reflects the strong cash
generation of the group's business model. The CSX Customer Services division had a poor six months' trading which
is reflected in the segmental report; the Board is confident that the division will recover its shortfall over the balance of
the financial year. Global Continuity has bedded down and, despite a lower than expected initial growth, which had a
minor impact on the group's results, is expected to add value in the future.
Net finance costs reduced by 23,1% in line with the further reduction in debt and the taxation rate was lower than
previous periods due to the changeover to withholding tax from Secondary Taxation on Companies relating to the
dividends paid.
Diluted earnings per share ("EPS") and headline earnings per share ("HEPS") increased by 18,8% to 12,0 cents
(2011: 10,1 cents) whilst the interim dividend per share was increased by 50,0% to 4,5 cents (2011: 3,0 cents).
The increase in capital expenditure is in line with expectations and is due to the planned accelerated programme
whereby, in addition to the routine replacement and expansion items, R10,1 million has been spent on building
expansions which are currently taking place in Johannesburg and Cape Town. Despite the higher capital expenditure,
the overall gearing has continued to improve leading to a net debt/equity ratio of 33,1% (2011: 55,1%).
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr RM Buttle, CA(SA), in accordance with the
recognition and measurement principles of International Financial Reporting Standards (IFRS), including the
information required by IAS 34: Interim Financial Reporting, the AC 500 standards issued by the Accounting Practices
Board or its successor, and the Listings Requirements of the JSE. The same accounting policies and methods of
computation were applied as in the prior year annual financial statements.
Certain accounting pronouncements became effective during the current financial period. However these do not have
an impact on either transactions or disclosures.
Related parties
In terms of the consulting agreement with the MIC, fees of R0,6 million (2011: R0,5 million) were paid during the
period under review.
Directorate and corporate governance
The structure of the Board and sub-committees remains unchanged whilst the membership has changed with the
resignation of Mrs Ndumi Medupe and the appointment of Mrs Sindi Zilwa. Mrs Zilwa replaced Mrs Medupe as
a member of the Board and the Audit, Governance and Risk Committee. The Board comprises two executive and
six non-executive directors, of whom four are independent directors.
Dividends
The reduction of the group's debt and continued strong cash flows have enabled the Board to improve the dividend
cover from 3,4 times in the comparative period to 2,7 times for the current period which is within the targeted range
of between 2,5 and 2,75 times cover.
Notice is hereby given that an interim gross cash dividend of 4,5 cents per share in respect of the period ended
31 December 2012 has been declared payable to the holders of ordinary shares recorded in the books of the
Company on Friday, 12 April 2013. The last day to trade cum-dividend will therefore be Friday, 5 April 2013 and
Metrofile shares will trade ex-dividend from Monday, 8 April 2013. Payment of the dividend will be made on Monday,
15 April 2013. Share certificates may not be dematerialised or rematerialised between Monday, 8 April 2013 and
Friday, 12 April 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 3,825 cents per
share. The Company's issued share capital remains unchanged between the period end and the date of the dividend
declaration. The Company's tax number is 9375066710.
Commitments and expansion
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. Owned premises
comprised 50 000 square metres and leased premises 43 500 square metres at period-end. External lease
commitments over the next five years amount to R84,0 million. Capex for 2013 financial year is planned as
R33,9 million of which R23,8 million is for new capacity; this excludes the amount of R29,5 million being spent on
additional warehousing (2011 comparative spend: R27,6 million of which R23,7 million was for new capacity).
Events after the reporting date
There have been no material events after the reporting date.
Outlook
Despite both local and global economic challenges impacting the business environment, the group's widening range
of records management and data protection related services gives rise to the optimism of continued future growth in
earnings, cash flows and dividends.
This interim statement has not been reviewed or audited by Metrofile's auditors.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
27 February 2013
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 Pongweni*
Registered office: IN Matthews+^
3 Gowie Road, The Gables, Cleveland CP Coutts-Trotter#
Johannesburg, 2094 SV Zilwa^
www.metrofileholdings.com
+ Lead independent
^ Independent
Sponsor: * Non-executive
The Standard Bank of South Africa Limited # Alternate to CS Seabrooke
Transfer secretaries: Company Secretary:
Computershare Investor Services (Pty) Limited P Atkins
70 Marshall Street, Johannesburg, 2001
Date: 27/02/2013 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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