Wrap Text
Unaudited group results For the six months ended 31 December 2013
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 2013
REVENUE 11,5% to R314,0 million
EBITDA 15,5% to R104,2 million
HEPS 20,0% to 14,4 cents per share
INTERIM DIVIDEND 55,6% to 7,0 cents per share
Summarised income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 Note 2013 2012 2013
Revenue 314 010 281 724 590 163
Earnings before interest, taxation,
depreciation and amortisation (EBITDA) 104 156 90 142 187 492
Depreciation (15 176) (13 095) (27 724)
Earnings before exceptional item and
finance costs (EBIT) 88 980 77 047 159 768
Exceptional item 1 15 529 - -
Operating profit before finance costs 104 509 77 047 159 768
Net finance costs (7 001) (8 696) (16 566)
Finance income 1 086 1 455 3 541
Finance costs (8 087) (10 161) (20 107)
Profit before taxation 97 508 68 351 143 202
Taxation (23 674) (17 245) (35 135)
Profit for the period 73 834 51 106 108 067
Attributable to:
Owners of the parent 73 238 50 353 106 753
Non-controlling interests 596 753 1 314
Profit for the period 73 834 51 106 108 067
Further information
Number of ordinary shares in issue (thousands) 423 240 420 253 420 253
Weighted average number of ordinary
shares in issue (thousands) 421 373 417 736 418 978
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 17,4 12,1 25,5
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 17,2 12,0 25,2
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 14,4 12,0 25,5
Dividend per ordinary share
Interim dividend per ordinary share -
proposed/paid (cents) 7,0 4,5 -
Final dividend per ordinary share - paid (cents) - - 6,5
Summarised statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 2013 2012 2013
Profit for the period 73 834 51 106 108 067
Other comprehensive income for the period
net of tax 2 585 1 030 1 334
Hedge accounting for fair value on interest
rate swaps 770 453 1 573
Currency movement on translation of foreign
subsidiary 1 815 577 (239)
Total comprehensive income for the period 76 419 52 136 109 401
Attributable to:
Owners of the parent 74 933 51 100 108 204
Non-controlling interests 1 486 1 036 1 197
Summarised statement of financial position
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
R'000 Notes 2013 2012 2013
ASSETS
Non-current assets 554 505 528 478 550 540
Property 209 619 190 126 207 451
Plant and equipment 171 832 165 266 170 405
Goodwill 171 666 171 666 171 666
Deferred tax asset 1 388 1 420 1 018
Current assets 204 172 150 462 144 710
Inventories 12 428 13 115 10 219
Trade receivables 101 336 82 487 99 768
Other receivables 2 55 203 9 610 8 514
Taxation - - 311
Bank balances 35 205 45 250 25 898
Total assets 758 677 678 940 695 250
EQUITY AND LIABILITIES
Equity and reserves 512 619 420 602 461 012
Equity attributable to owners of the parent 507 485 417 115 457 364
Non-controlling interests 5 134 3 487 3 648
Non-current liabilities 125 311 166 588 117 327
Interest-bearing liabilities 3 110 018 152 114 104 812
Deferred taxation liability 15 293 14 474 12 515
Current liabilities 120 747 91 750 116 911
Trade and other payables 53 084 47 385 61 956
Deferred revenue 13 093 10 991 10 601
Bank overdraft 471 - 576
Provisions 246 249 1 989
Taxation 5 276 1 572 5 720
Interest-bearing liabilities 3 48 577 31 553 36 069
Total equity and liabilities 758 677 678 940 695 250
Net asset value per ordinary share (cents) 119,9 99,3 108,8
Notes:
1 The exceptional item relates to the provisional profit in respect of property, plant and equipment destroyed in the
fire in KwaZulu-Natal; tax of R2,9 million has been applied to this profit.
2 Other receiveables include an amount of R42,6 million in respect of the insurance claim and R2,4 million in
respect of prepaid rent for premises in Nigeria.
3 Long-term interest-bearing liabilities include the Metrofile (Pty) Limited amortising and rotating loans which have
a remaining 27-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 group's total
borrowings are 38% hedged (30 June 2013: 75%). The Metrofile (Pty) Limited borrowings are JIBAR linked and are hedged by way
of interest rate swaps which expire on 30 September 2014, whilst the Cleardata (Pty) Limited borrowings are prime linked and unhedged.
4 The majority of the group's properties have been pledged as security for 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 2013 2012 2013
Profit attributable to owners of the parent 73 238 50 353 106 753
Profit on disposal of property (8 943) - -
Profit on disposal of plant and equipment (6 611) (87) (168)
Tax effect of above items 2 906 24 47
Headline earnings 60 589 50 290 106 632
Headline earning per ordinary share (cents) 14,4 12,0 25,5
Summarised 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 2013 2012 2013 2013 2012 2013
Metrofile Records
Management 250 336 231 788 476 657 69 565 61 757 132 540
CSX Customer
Services 34 402 31 211 71 362 1 491 68 2 426
Property
Companies 24 600 21 137 42 865 24 600 21 137 42 865
Other 34 713 24 149 53 081 8 500 7 180 9 661
Inter-group (30 041) (26 561) (53 802) - - -
Total 314 010 281 724 590 163 104 156 90 142 187 492
EBIT 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 2013 2012 2013 2013 2012 2013
Metrofile Records
Management 58 105 51 307 110 682 288 407 257 034 248 928
CSX Customer
Services 1 158 (235) 1 793 26 875 21 249 23 215
Property
Companies 24 600 21 137 42 865 209 619 190 126 207 771
Other 5 117 4 838 4 428 62 110 38 865 43 670
Total 88 980 77 047 159 768 587 011 507 274 523 583
"Metrofile Records Management" represents the Metrofile document storage and management and scanning
business units which are managed and operated geographically.
"Other" includes Metrofile Holdings Limited, Africa operations, the paper management business and Cleardata (Pty)
Limited.
Finance costs have not been reflected on the segmental report as the majority relates 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.
Summarised statement of cash flows
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R'000 2013 2012 2013
Cash generated from operations before net working
capital changes 109 668 96 337 194 216
Increase in net working capital (58 588) (7 175) (4 544)
Cash generated from operations 51 080 89 162 189 672
Net finance costs paid (7 001) (8 696) (16 566)
Dividends declared (27 144) (18 728) (37 639)
Normal taxation paid (22 020) (14 470) (27 032)
Net cash (outflow )/inflow from operating activities (5 085) 47 268 108 435
Net cash outflow from investing activities:
Investment in property: expansion (18 409) (13 726) (32 059)
Investment in plant and equipment: expansion (18 699) (14 754) (32 019)
Investment in plant and equipment: replacement (4 558) (4 834) (6 937)
Proceeds on disposal of property, plant and equipment 38 449 304 849
Net cash outflow from financing activities:
Loans repaid (18 286) (14 975) (92 870)
Loans drawn down 36 000 - 34 000
Net increase/(decrease) in cash and cash equivalents 9 412 (716) (20 602)
Cash and cash equivalents at the beginning
of the period 25 322 45 966 45 924
Cash and cash equivalents at the end of the period 34 734 45 250 25 322
Represented by:
Bank balances 35 205 45 250 25 898
Bank overdrafts (471) - (576)
Summarised statement of changes in equity
Total
equity
before
Accumu- minority Non-
Share Share lated Other apportion- controll-
R'000 capital premium losses reserves ment ing Total
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 - - (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
IFRS 2 Equity Reserve
relating to share
schemes - - - 2 056 2 056 - 2 056
Dividends declared - - (18 911) - (18 911) - (18 911)
Total comprehensive
income for the
period ended
30 June 2013 - - 56 400 704 57 104 161 57 265
Balance at
30 June 2013 2 583 555 885 (106 991) 5 887 457 364 3 648 461 012
Shares issued in terms
of share schemes 18 15 008 - - 15 026 - 15 026
IFRS 2 Equity Reserve
relating to share
schemes - - - 2 332 2 332 - 2 332
Share scheme settlement - - (12 763) (2 263) (15 026) - (15 026)
Dividends declared - - (27 144) - (27 144) - (27 144)
Total comprehensive
income for the
period ended
31 December 2013 - - 73 238 1 695 74 933 1 486 76 419
Balance at
31 December 2013 2 601 570 893 (73 660) 7 651 507 485 5 134 512 619
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, Nigeria and, through the CSX Customer
Services brand, has contracts in numerous other African countries. The Metrofile Records Management division
operates from 44 facilities, at 21 locations, covering more than 83 800 square metres of warehousing and office
space. In accordance with its owner/lessee model, 61,1% of these facilities are owned by the group. The rest of the
group's divisions lease their premises.
Services include Records Storage and Management, Image Processing, Backup Storage and Management,
Records Management Software and Records Management Consultancy, Business Continuity and IT Continuity,
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.
Metrofile has been listed on the JSE Limited ("JSE") since 1995 and its ordinary shares are quoted in the "Support
Services" sector of the JSE. Metrofile is a black owned company with black ownership amounting to 52,8% whilst
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 necessity for businesses to not only archive but manage
all types of records, whether they be in physical or digital format, positions the group well to assist companies with
their record-keeping requirements, thereby mitigating risk to the organisation.
Metrofile's expansion into Africa remains driven by the demand for the similar services to those provided by the
group in South Africa. With Metrofile now being established in Mozambique and Nigeria the expansion into other
African countries is being explored taking account potential target countries' business and political environment,
governance, market attractiveness, geographical proximity, language, infrastructure, logistics, education and labour
force, potential client industries and overall risk.
Metrofile has a long-term target of owning approximately 70% of the properties, from which the Metrofile Records
Management division operates, in order to optimise operational efficiency. The group amended its dividend cover to
2,25 times for the 2013 reporting year and is moving towards a cover of 2,0 times.
Financial review
Revenue increased by 11,5% to R314,0 million, EBITDA by 15,5% to R104,2 million and EBIT, before exceptional
items, by 15,5% to R89,0 million. The primary segment, Metrofile Records Management, had a solid period
translating a revenue growth of 8,0% to an EBITDA growth of 12,1%. The CSX Customer Services business unit,
despite the weakening of the Rand effecting inventory imports, traded well to recover from the comparative period
results. As expected, Rainbow Paper Management recovered from poor trading in the 2013 financial year with both
the improvement of pulp paper prices and volumes giving rise to growth in revenue and profits. Global Continuity has
stabilised and new structures are in place giving the foundation to contribute to the group in the future. Cleardata has
grown well and remains the market leader in confidential records destruction. From an African growth perspective,
Mozambique continues to grow and all the required infrastructure has been installed in Nigeria; the focus will now
be on the selling to prospective clients.
Basic earnings per share ("EPS") increased by 43,8% and headline earnings per share ("HEPS") increased by
20,0% to 17,4 cents and 14,4 cents respectively whilst the total dividend per share increased by 55,6% to 7,0 cents.
EPS have been impacted by the proceeds of the insurance claim related to the fire which occurred in KwaZulu-
Natal in October 2013; the details of which are reflected in the reconciliation to HEPS. Note 2 to the financial results
reflects the breakdown of other receivables inclusive of those related to the insurance claim.
Cash generated from operations before net working capital changes increased by 13,8% whilst the combination of
some significant trade receivables not being paid before 31 December 2013 and the increase in other receivables
in respect of the insurance claim resulted in a decrease in cash generated from operations of 42,7%. At the date
of this report the trade receivables have improved and interim payments on the proceeds of the insurance claim
have been received. The investment in property related to the acquisition of a Cape Town property which the group
previously rented.
Capital investments of R41,7 million were mainly for expansion and included the Cape Town premises which were
purchased for R16,0 million and racking of R12,5 million required for growth.
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr RM Buttle, CA (SA). The summarised financial
information has been prepared in accordance with the framework concepts and measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guidelines and
AC500 Standards as issued by the Accounting Practices Committee and Financial Reporting Pronouncements
as issued by the Financial Reporting Standards Council, 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 2013.
Certain accounting pronouncements became effective during the current financial year; however, these do not have
an impact on either transactions or disclosures.
Related parties
In terms of a consulting agreement, and as approved at the Annual General Meeting, the MIC fees of R0,63 million
(2013: R0,60 million) were paid during the period under review.
Directorate and corporate governance
The structure of the Board and sub-committees remains unchanged and comprises two executive and six non-
executive directors, of whom four are independent directors. Mr Nigel Matthews remains the lead independent director.
Refer to the SENS of 25 February 2014 relating to future changes.
Dividends
The Board has continued its strategy to continuously improve dividends whilst ensuring that they are sustainable
and reviews the cover periodically. Due to strong cash generation the target dividend cover has been reduced to
2,0 times.
Notice is hereby given that an interim gross cash dividend of 7,0 cents per share in respect of the period ended
31 December 2013 has been declared payable to the holders of ordinary shares recorded in the books of the
company on Friday, 11 April 2014. The last day to trade cum-dividend will therefore be Friday, 4 April 2014 and
Metrofile shares will trade ex-dividend from Monday, 7 April 2014. Payment of the dividend will be made on Monday,
14 April 2014. Share certificates may not be dematerialised or rematerialised between Monday, 7 April 2014 and
Friday, 11 April 2014, 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 5,950 cents per
share. No credits in terms of Secondary Taxation on Companies were available for utilisation. The company's issued
share capital is 423 239 994 shares and the company's tax number is 9375066710.
Commitments
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. Operating lease
commitments amount to R55,5 million for the next five years. Capital expansion plans for the full financial year
amount to R65,6 million including the Cleveland building purchase which is expected to be transferred in April 2014.
Events after the reporting date
There have been no material events after the reporting date.
Outlook
Metrofile remains optimistic of continued growth across all business units, inclusive of the rest of Africa, which will
see future growth in revenue, EBITDA, earnings and dividends.
This statement has not been reviewed or audited by Metrofile's auditors.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
26 February 2014
Senderwood
Gauteng
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")
Registered office:
41 Wordsworth Avenue
Senderwood, Bedfordview, 2007
www.metrofileholdings.com
Sponsor:
The Standard Bank of South Africa Limited
Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Directors:
CS Seabrooke^ (Chairman)
MS Bomela* (Deputy Chairperson)
GD Wackrill (CEO)
RM Buttle (CFO)
P Langeni^
IN Matthews†
CN Pongweni*
SV Zilwa^
†Lead independent
^Independent
*Non-executive
Company Secretary:
P Atkins
Date: 26/02/2014 01:30:00 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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