Wrap Text
Unaudited condensed consolidated interim results for the six months ended 30 November 2013
OneLogix Group Limited
Incorporated in the Republic of South Africa
(Registration number 1998/004519/06)
JSE share code: OLG
ISIN: ZAE000026399
('OneLogix' or 'the company' or 'the group')
Unaudited Condensed Consolidated Interim Results for the six months ended 30 November 2013
Highlights
Five consecutive periods of strong growth since market recovery
Revenue up 33%
Operating profit up 34%
HEPS up 29%
Core HEPS up 35%
Cash flows generated from operations up 93%
Specific share repurchase successfully concluded December 2013
Previous acquisitions successfully integrated
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 November 30 November 31 May
2013 2012 2013
% R'000 R'000 R'000
Continuing operations
Revenue 33 664 956 498 983 1 040 301
Operating and administration costs 34 (568 335) (423 342) (896 711)
Depreciation and amortisation 16 (28 867) (24 913) (51 054)
Operating profit 34 67 754 50 728 92 536
Share of profits from associate >100 2 633 - 4 814
Finance income (66) 750 2 230 2 423
Finance costs 21 (8 973) (7 402) (15 494)
Profit before taxation 36 62 164 45 556 84 279
Taxation 29 (16 793) (13 027) (22 237)
Profit from continuing operations 39 45 371 32 529 62 042
Profit from discontinued operations - 8 791 8 762
Profit for the period 10 45 371 41 320 70 804
Other comprehensive income
Movement in foreign currency translation reserve 27 31 161
Total comprehensive income for the period 10 45 398 41 351 70 965
Profit attributable to:
- Non-controlling interest 129 5 508 2 410 5 316
- Owners of the parent 2 39 863 38 910 65 488
10 45 371 41 320 70 804
Other comprehensive income attributable to:
- Non-controlling interest - - -
- Owners of the parent 27 31 161
27 31 161
Total comprehensive income attributable to:
- Non-controlling interest 129 5 508 2 410 5 316
- Owners of the parent 2 39 890 38 941 65 649
10 45 398 41 351 70 965
Total comprehensive income attributable to owners
of the parent arises from:
- Continuing operations 32 39 890 30 233 56 941
- Discontinued operations - 8 708 8 708
2 39 890 38 941 65 649
Number of shares in issue ('000):
- Total issued less treasury shares 231 595 225 658 225 658
- Weighted 225 858 225 658 225 658
- Diluted 231 595 230 681 231 258
Basic and headline earnings per share (cents)
Basic earnings per share (cents) 2 17,6 17,2 29,0
Continuing operations 32 17,6 13,3 25,1
Discontinued operations 0,0 3,9 3,9
Diluted basic earnings per share (cents) 2 17,2 16,9 28,3
Continuing operations 31 17,2 13,1 24,5
Discontinued operations 0,0 3,8 3,8
Headline earnings per share (cents) 29 17,6 13,6 25,1
Continuing operations 30 17,6 13,5 25,0
Discontinued operations 0,0 0,1 0,1
Diluted headline earnings per share (cents) 29 17,2 13,3 24,5
Continuing operations 30 17,2 13,2 24,4
Discontinued operations 0,0 0,1 0,1
Core headline earnings per share (cents) 35 18,5 13,7 25,6
Continuing operations 36 18,5 13,6 25,5
Discontinued operations 0,0 0,1 0,1
Diluted core headline earnings per share (cents) 34 18,0 13,4 25,0
Continuing operations 35 18,0 13,3 24,9
Discontinued operations 0,0 0,1 0,1
Calculation of headline earnings and
core headline earnings
Profit attributable to owners of the parent 2 39 863 38 910 65 488
(Profit)/loss on disposal of property, plant and
equipment less taxation and non-controlling interests (57) 206 22
Insurance proceeds less taxation and
non-controlling interests - - (438)
Profit on disposal of discontinued
operation less taxation - (8 523) (8 495)
Headline earnings 30 39 806 30 593 56 577
Amortisation of intangible assets acquired
as part of a business combination less taxation
and non-controlling interests 1 905 355 1 209
Core headline earnings 35 41 711 30 948 57 786
Segmental split of amortisation of intangible assets
acquired in a business combination less taxation
and non-controlling interests
Specialised transport >100 891 355 1 048
Retail - - -
Reportable segments 891 355 1 048
Other >100 1 014 - 161
>100 1 905 355 1 209
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 November 30 November 31 May
2013 2012 2013
% R'000 R'000 R'000
Net cash generated from operations 93 63 292 32 734 97 431
Continuing operations 63 292 32 792 97 489
Discontinued operations - (58) (58)
Net cash flows from investing activities 123 (15 236) (6 840) (88 544)
Continuing operations (15 236) (5 715) (88 482)
Discontinued operations - (1 125) (62)
Net cash flows from financing activities (1) (32 971) (33 145) (63 592)
Continuing operations (32 971) (33 070) (63 517)
Discontinued operations - (75) (75)
Net increase/(decrease) in cash resources 15 085 (7 251) (54 705)
Cash resources at beginning of period 47 899 102 494 102 494
Exchange gain/(loss) on cash resources 18 17 110
Cash resources at end of period (34) 63 002 95 260 47 899
Condensed Consolidated Statement of Financial Position
Unaudited at Unaudited at Audited at
30 November 30 November 31 May
2013 2012 2013
% R'000 R'000 R'000
ASSETS
Non-current assets 629 784 389 671 555 335
Property, plant and equipment 505 490 350 887 446 418
Intangible assets 71 417 31 178 66 289
Investment in associate 36 567 - 33 935
Loans and receivables 14 836 6 229 7 219
Deferred taxation 1 474 1 377 1 474
Current assets 269 037 262 371 219 345
Inventories 10 975 10 194 10 090
Trade and other receivables 189 333 154 976 148 994
Taxation 5 727 1 941 5 512
Cash resources 63 002 95 260 54 749
Total assets 898 821 652 042 774 680
EQUITY AND LIABILITIES
Equity 359 813 299 920 309 456
Ordinary shareholders' funds 327 279 293 806 292 272
Non-controlling Interests 32 534 6 114 17 184
Liabilities
Non-current liabilities 227 898 156 460 201 327
Interest-bearing borrowings 172 008 129 773 149 722
Deferred tax 55 890 26 687 51 605
Current liabilities 311 110 195 662 263 897
Trade and other payables 191 023 137 012 156 088
Interest-bearing borrowings 87 488 54 867 74 137
Vendor liability 9 000 - 9 000
Non-controlling interest put option 16 206 - 16 206
Taxation 7 393 3 783 1 616
Bank overdrafts - - 6 850
Total equity and liabilities 898 821 652 042 774 680
Net asset value per share (cents) 9 141,3 130,2 129,5
Net tangible asset value per share (cents) (5) 110,5 116,4 100,1
SEGMENTAL ANALYSIS
Revenue
Specialised transport 35 600 896 444 567 936 967
Retail 9 17 115 15 695 30 188
Reportable segments 34 618 011 460 262 967 155
Other 21 46 945 38 721 73 146
33 664 956 498 983 1 040 301
Segment results
Specialised transport 34 73 033 54 581 99 458
Retail 25 7 054 5 662 12 148
Reportable segments 33 80 087 60 243 111 606
Other >100 4 148 953 4 599
Corporate items 57 (16 481) (10 468) (23 669)
34 67 754 50 728 92 536
Unallocated:
Share of profits from associate >100 2 633 - 4 814
Finance Income (66) 750 2 230 2 423
Finance costs 21 (8 973) (7 402) (15 494)
36 62 164 45 556 84 279
Total assets
Specialised transport 37 768 814 561 263 686 539
Retail 19 26 683 22 359 26 261
Reportable segments 36 795 497 583 622 712 800
Other 11 26 101 23 457 17 146
Corporate items (20) 33 455 41 645 3 813
Investment in associate >100 36 567 - 33 935
Unallocated: taxation and deferred taxation 117 7 201 3 318 6 986
38 898 821 652 042 774 680
Total liabilities
Specialised transport 37 404 292 294 628 339 856
Retail 84 18 200 9 876 15 857
Reportable segments 39 422 492 304 504 355 713
Other 27 12 013 9 495 10 032
Corporate items 439 41 220 7 653 46 258
Unallocated: taxation and deferred taxation 108 63 283 30 470 53 221
539 008 352 122 465 224
The group has authorised capital expenditure over
the next six months of R52,3 million. R46,8 million is
already committed.
Commitments
Operating lease commitments
(not exceeding five years) 64 437 53 347 67 840
Restatement of cash flows
Net cash flows from investing activities and net cash flows from financing activities for the period ended
30 November 2012 have been restated.
Property, plant and equipment additions previously included acquisitions of assets that were financed by
instalment sale agreements and mortgage bonds.
In terms of IAS 7, Statement of cash flows, only cash payments for assets acquired should be included and
not those financed by way of finance lease or acquired on credit.
Additions financed by way of instalment sale agreements and mortgage bonds have been excluded from the
restated net cash flows from investing activities line item.
Accordingly, borrowings raised included the gross amounts of new instalment sales agreements and mortgage
bonds entered into during the year and these have been excluded from the restated cash flow from financing
activities line item.
The previously reported and restated line items are shown in the table below:
As previously
reported Adjustment As restated
R'000 R'000 R'000
2013
Net cash flows from investing activities (42 030) 35 190 (6 840)
Net cash flows from financing activities 2 045 (35 190) (33 145)
The restatement had no impact on net movement in cash
resources, nor the balance thereof at period-end.
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 2012 - audited 2 316 45 797 (8 431) 216 713
Dividends declared to non-controlling interests - - - -
Capital distribution paid to OneLogix shareholders - (10 422) - -
Non-controlling interest acquired - - - -
Share-based compensation reserve movement - - - -
Comprehensive income - - - 38 910
At 30 November 2012 - unaudited 2 316 35 375 (8 431) 255 623
Dividends declared to non-controlling interests - - - -
Dividend paid to OneLogix shareholders - - - (10 422)
Non-controlling interest acquired - - - -
Share-based compensation reserve movement - - - -
Transactions with non-controlling interests - - - -
Comprehensive income - - - 26 578
At 31 May 2013 - audited 2 316 35 375 (8 431) 271 779
Dividends declared to non-controlling interests - - - -
Dividend paid to OneLogix shareholders - - - (11 580)
Non-controlling interest acquired - - - -
Share-based compensation reserve movement - - - -
Transactions with non-controlling interests - - - -
Treasury shares becoming unrestricted on vesting
to BEE share scheme participants - - 8 431 -
Share-based payment scheme completed - - - 8 075
Comprehensive income - - - 39 863
At 30 November 2013 - unaudited 2 316 35 375 - 308 137
Foreign
Share-based currency
Revaluation Other compensation translation
reserve reserves reserve reserve
R'000 R'000 R'000 R'000
At 1 June 2012 - audited 13 258 153 5 709 127
Dividends declared to non-controlling interests - - - -
Capital distribution paid to OneLogix shareholders - - - -
Non-controlling interest acquired - - - -
Share-based compensation reserve movement - - 789 -
Comprehensive income - - - 31
At 30 November 2012 - unaudited 13 258 153 6 498 158
Dividends declared to non-controlling interests - - - -
Dividend paid to OneLogix shareholders - - - -
Non-controlling interest acquired - - - -
Share-based compensation reserve movement - - 788 -
Transactions with non-controlling interests - - - -
Comprehensive income - - - 130
At 31 May 2013 - audited 13 258 153 7 286 288
Dividends declared to non-controlling interests - - - -
Dividend paid to OneLogix shareholders - - - -
Non-controlling interest acquired - - - -
Share-based compensation reserve movement - - 789 -
Transactions with non-controlling interests - - - -
Treasury shares becoming unrestricted on vesting
to BEE share scheme participants - - - -
Share-based payment scheme completed - - (8 075) -
Comprehensive income - - - 27
At 30 November 2013 - unaudited 13 258 153 - 315
Transactions
with non- Non-
controlling controlling
interests interests Total
R'000 R'000 R'000
At 1 June 2012 - audited (11 144) 5 892 270 390
Dividends declared to non-controlling interests - (2 089) (2 089)
Capital distribution paid to OneLogix shareholders - - (10 422)
Non-controlling interest acquired - (99) (99)
Share-based compensation reserve movement - - 789
Comprehensive income - 2 410 41 351
At 30 November 2012 - unaudited (11 144) 6 114 299 920
Dividends declared to non-controlling interests - (1 700) (1 700)
Dividend paid to OneLogix shareholders - - (10 422)
Non-controlling interest acquired - 7 462 7 462
Share-based compensation reserve movement - - 788
Transactions with non-controlling interests (18 608) 2 402 (16 206)
Comprehensive income - 2 906 29 614
At 31 May 2013 - audited (29 752) 17 184 309 456
Dividends declared to non-controlling interests - (1 250) (1 250)
Dividend paid to OneLogix shareholders - - (11 580)
Non-controlling interest acquired - 8 015 8 015
Share-based compensation reserve movement - - 789
Transactions with non-controlling interests 5 908 3 077 8 985
Treasury shares becoming unrestricted on vesting
to BEE share scheme participants (8 431) - -
Share-based payment scheme completed - - -
Comprehensive income - 5 508 45 398
At 30 November 2013 - unaudited (32 275) 32 534 359 813
Commentary
The interim period, while marked by significant trading challenges, saw the group continue to grow and expand.
Our strong existing businesses continued to perform well despite adverse market conditions, and recent
acquisitions contributed a gratifying performance for the full six months. The group further continued
on the acquisition and business development path with a focus on the Specialised Transport reportable segment.
Basis of presentation
The unaudited condensed consolidated interim financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') and are presented in terms of the disclosure requirements
set out in International Accounting Standards ('IAS') 34, as well the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial
Reporting Standards Council, the JSE Limited Listings Requirements and the requirements of the Companies Act,
2008. 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 2013.
Accounting policies and computations are consistently applied as in the annual financial statements. These
results have been compiled under the supervision of the Chief Financial Officer, GM Glass (CA(SA)). The
interim results have not been audited or reviewed by the group auditors, PricewaterhouseCoopers Inc.
The unaudited condensed consolidated interim financial statements are available to be viewed on the
company's website www.onelogix.com.
Review of operations
In the interim period the group successfully overcame trading difficulties including protracted
industrial unrest in the vehicle manufacturing, component supply and delivery markets.
Acquisition and business expansion
During the latter part of the interim period the group acquired a 51% stake in Madison Freight
Lines SA (Pty) Ltd, trading as Madison, a niche Gauteng-based operation specialising in the
delivery of heavy and abnormal equipment. The business specifically strengthens the growing
OneLogix Projex business by extending its foothold in Gauteng. Intangible assets of R4,8 million
and goodwill of R2 million have been recognised on the preliminary allocation of the purchase
price. The final allocation will be completed before year-end. Had the Madison acquisition been
effective from 1 June 2013 the effect on the statement of comprehensive income would not have
been significant.
Further, OneLogix established its third start-up business through a 75% stake in OneLogix Linehaul
(Pty) Ltd, a company specialising in the cross-border movement of commodities and general freight.
The group's two previous start-ups - OneLogix Projex (Pty) Ltd ('Projex') and Commercial Vehicle
Delivery Services (Pty) Ltd ('CVDS') - are today highly successful businesses within the group.
Both new investments are part of the Specialised Transport reportable segment.
Disposal
With effect from 1 October 2013 the group disposed of a 10% shareholding in Projex to Projex
management for R9 million through vendor financing. This transaction better aligns the interests
of management and shareholders. OneLogix remains the majority shareholder with an 80% interest
in Projex. The difference between the consideration payable and the net asset value disposed of,
is R5,9 million and has been credited directly to the transactions with non-controlling interests
reserve.
Specialised Transport reportable segment
Vehicle Delivery Services ('VDS'), a mature business, remains the group's largest business.
It continues to deliver solid growth and maintain its market leading position despite a
difficult market, which exhibits below-average inflation. In the interim period, growth within
the market was further inhibited by lower consumer demand and industry-wide labour disruptions.
Fortunately healthy labour relations in VDS mitigated the full effect of the latter. VDS continues
to investigate new opportunities on the back of ongoing investment in optimising fleet,
IT infrastructure and people.
CVDS faced down the same industry challenges as VDS and entrenched its significant market
share while continuing to expand its customer base.
Projex is now a significant player in the Durban harbour freight logistics market with a
well-established customer base. The business is focussing on expanding its business by
concentrating on larger established customers. The newly acquired Madison has worked closely
with Projex over the years and is expected to maximise customer, fleet and infrastructure
synergies between the two companies.
United Bulk contributed a pleasing performance in its first full six-month of earnings within
the group. A fleet expansion programme should facilitate market share growth to complement the
strong existing customer base.
The newly established OneLogix Linehaul contributed one month's trading to the group, and is
expected to be a solid performer in the future.
Retail reportable segment
PostNet, another of the group's mature businesses, continues to deliver reliably high operating
margins and regular annuity income. The process of evaluating new opportunities for growth and
diversification continues unabated.
Other - Logistics Services
The remaining businesses in the group are involved in providing support services to the logistics
industry. These businesses do not meet the recognition criteria of a separately reportable segment
and include:
Atlas Panelbeaters which exceeded expectations during the period. It has responded very well to
earlier remedial action and is presently evaluating market expansion opportunities.
QSA, which owns transport-specific accounting software critical to the group's operations, is in
the development phase but is nonetheless a small contributor to earnings.
Drive Report (our 40% owned associate) is also a first time contributor for a full six-month period,
and also performed well. It occupies a well-defined and high-growth niche as a driver behaviour
management company that seeks to address cost optimisation and road safety, two key factors in the
logistics and transport industries. The results of Drive Report have been equity accounted.
Financial results
Revenue increased by 33% to R665 million on the back of strong organic growth across the group as
well as the maiden contribution of United Bulk.
The combined operating margin was maintained at 10,2%. This is encouraging as it supports the
business processes that are in place to manage cost creep in line with top-line growth. This
resulted in operating profit increasing 34% to R67,8 million compared to the 33% jump in revenue.
The group has extended the estimated useful lives of a portion of the fleet based on past experience
of fleet replacement resulting in a once off reduction in the depreciation charge of approximately
R4 million during the interim period.
Net finance costs increased by 59% from R5,2 million to R8,2 million, as a result of the group's
increased investment in fleet as well as the reduced cash on hand due to the funding of the
United Bulk and Drive Report acquisitions in December 2012. Interest cover of 8,2 times (
November 2012: 9,8 times) remains healthy.
Headline earnings per share ('HEPS') rose 29% from 13,6 cents to 17,6 cents. Earnings per
share ('EPS') grew 2% from 17,2 cents to 17,6 cents given that the prior period's earnings
were boosted by the capital profit realised on the disposal of Magscene (Pty) Ltd for R8,5 million.
We aim to present the stakeholders with similar information to that which management uses to
evaluate the performance of the group's operations. Accordingly we present core headline earnings,
which are headline earnings (as calculated based on SAICA Circular 2/2013) adjusted for the
amortisation charge of intangibles recognised on acquisitions. Core HEPS increased 35% and diluted
core HEPS increased 34% to 18,5 cents and 18 cents, respectively. A reconciliation between headline
earnings and core headline earnings is provided.
Diluted HEPS and EPS are marginally lower than their respective undiluted measures, due to the dilutive
effect of the shares held by the employee BEE Trust as treasury shares. As of 25 November 2013 these
shares are no longer treated as treasury shares as they have become unrestricted.
Cash flows from operations increased 93% to R63,2 million due to continued focus on working capital
management and the proven ability of the group to convert our profits into cash. Dividend number 3,
totalling R11,6 million, was paid during the interim period and is included in operating cash flows.
During the interim period, the group invested R76,6 million in operational infrastructure as follows:
R70 million in fleet (of which R49,2 million relates to expansionary spend), R2,0 million in IT-related
assets, R3,9 million for other assets (mainly at Atlas Panelbeaters) and R0,7 million in property.
Net proceeds of R3,2 million were received on the disposal of tangible assets. The investment of
R10,3 million in Madison was paid in cash during the period.
New interest-bearing borrowings of R40,1 million were raised, offset by the repayment of interest-bearing
borrowings of R27,6 million. Cash resources at the reporting date were R63,0 million, of which R60,8 million
was utilised subsequent to period-end to settle the outstanding purchase price of the share repurchase
from Izingwe Holdings (Pty) Ltd in December 2013 (see 'Post-interim period events').
Post-interim period events
As announced on 25 September 2013, Izingwe Holdings (Pty) Ltd ('Izingwe') expressed the desire to exit its
10,25% investment in OneLogix and the company capitalised on the opportunity by repurchasing, cancelling
and delisting these shares ('the Izingwe share buy-back'). As announced on 12 December 2013 shareholders
in general meeting unanimously approved this transaction, and the purchase consideration of R60,8 million,
being an amount of 250 cents per share together with interest thereon at a rate of 8,5% from 3 September
2013 until the repurchase date, was paid out of the available cash resources and short-term revolving
credit facilities of the company.
Dividend
Persuant to the extraordinary, although temporary, impact of the Izingwe share buy-back on the group's
cash reserves (see 'Post-interim period events'), the OneLogix board has decided not to pay an interim
dividend. A dividend declaration will be reassessed at year-end.
Prospects
OneLogix's strategy is working well - acquiring small entrepreneurial businesses, offering them the
benefit of a management platform which allows them to expand and realise their potential, together
with a focus on expanding existing businesses with continually refined business systems and processes.
It has been tested during difficult trading conditions and is expected to prevail in the medium term.
Despite the depletion of cash resources with the Izingwe share buy-back, OneLogix remains strongly
cash generative, which will undoubtedly continue proving a strong building block going forward.
People
We go to great lengths to ensure that high-quality people find their home in the group. Much energy
is also spent on ensuring a healthy and enabling cultural environment at work, all of which goes a
long way in the realisation of the company's strategy. We therefore remain highly appreciative of
our quality management and employees who continue to perform at the highest levels of excellence.
We further thank our business partners, customers, suppliers, business advisors and shareholders
for their ongoing invaluable support.
By order of the board
Ian Lourens
CEO
Geoff Glass
FD
6 February 2014
Directors
SM Pityana (Chairman)*#, AB Ally*# (Alternate: DA Hirschowitz), NJ Bester, AC Brooking*, GM Glass (FD),
AJ Grant*#, IK Lourens (CEO), CV McCulloch (COO), LJ Sennelo*#
* Non-executive
# Independent
There was no change to the board of directors during the period.
Registered office
46 Tulbagh Road, Pomona, Kempton Park (PostNet Suite 10, Private Bag X27, Kempton Park, 1620)
Company Secretary
Probity Business Services (Pty) Ltd, Third Floor, The Mall Offices, 11 Cradock Avenue, Rosebank, 2196
Transfer secretaries
Computershare Investor Services (Pty) Ltd, Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor
JavaCapital
2 Arnold Road, Rosebank, 2196
Date: 06/02/2014 07:31:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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