Wrap Text
Unaudited Group Results for the six months ended 31 December 2014
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 2014
NORMALISED REVENUE
UP 10,8%
NORMALISED HEPS
UP 8,8%
DIVIDENDS PER SHARE
UP 28,6 %
Summarised income statement
A
Normalised Normalised
Unaudited Unaudited Audited Unaudited Unaudited
6 months 6 months 12 months 6 months 12 months
ended ended ended ended ended
31 December 31 December 30 June 31 December 30 June
R'000 2014 2013 2014 2014 2014
Revenue 338 274 314 010 675 260 347 918 632 498
Earnings before interest, taxation, depreciation
and amortisation (EBITDA) 103 179 119 685 252 859 112 457 212 029
Depreciation (15 073) (15 176) (30 459) (15 422) (29 015)
Operating profit before finance costs 88 106 104 509 222 400 97 035 183 014
Net finance costs (5 759) (7 001) (12 630) (5 569) (12 630)
Finance income 2 558 1 086 1 380 2 558 1 380
Finance costs (8 317) (8 087) (14 010) (8 127) (14 010)
Interest paid on loans (8 317) (7 077) (12 374) (8 127) (12 374)
Interest paid relating to financial instruments – (1 010) (1 636) – (1 636)
Profit before taxation 82 347 97 508 209 770 91 466 170 384
Taxation (20 825) (23 674) (53 674) (23 272) (42 646)
Profit for the period 61 522 73 834 156 096 68 194 127 738
Attributable to:
Owners of the parent 60 111 73 238 154 808 66 783 126 450
Non-controlling interests 1 411 596 1 288 1 411 1 288
Profit for the period 61 522 73 834 156 096 68 194 127 738
Further information
Number of ordinary shares in issue (thousands) 427 084 423 240 423 240 427 084 423 240
Weighted average number of ordinary shares
in issue (thousands) 425 831 421 373 422 315 425 831 422 315
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 14,1 17,4 36,7 15,7 29,9
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 14,1 17,2 36,3 15,6 29,7
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 14,1 14,4 34,4 15,7 27,7
Dividend per ordinary share
Interim dividend per ordinary share –
proposed/paid (cents) 9,0 7,0 7,0 9,0 7,0
Final dividend per ordinary share – paid (cents) – – 8,0 – 8,0
Summarised statement of comprehensive income Normalised Normalised
Unaudited Unaudited Audited Unaudited Unaudited
6 months 6 months 12 months 6 months 12 months
ended ended ended ended ended
31 December 31 December 30 June 31 December 30 June
R’000 2014 2013 2014 2014 2014
Profit for the period 61 522 73 834 156 096 68 194 127 738
Other comprehensive income for the period net of tax (130) 2 585 3 087 130) 3 087
Hedge accounting for fair value on interest rate swaps (133) 770 960 (133) 960
Currency movement on translation of foreign subsidiary 3 1 815 2 127 3 2 127
Total comprehensive income for the period 61 392 76 419 159 183 68 064 130 825
Attributable to:
Owners of the parent 60 199 74 933 156 803 66 871 128 445
Non-controlling interests 1 193 1 486 2 380 1 193 2 380
Summarised statement of financial position
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
R'000 2014 2013 2014
ASSETS
Non-current assets 640 299 554 505 593 583
Property 244 616 209 619 234 673
Plant and equipment 196 015 171 832 186 024
Goodwill 193 727 171 666 171 666
Long-term receivable 2 814 – –
Deferred tax asset 3 127 1 388 1 220
Current assets 278 446 204 172 216 583
Inventories 17 258 12 428 12 947
Trade receivables 104 408 101 336 92 798
Other receivables 27 174 55 203 75 073
Taxation 3 509 – –
Bank balances 126 097 35 205 35 765
Total assets 918 745 758 677 810 166
EQUITY AND LIABILITIES
Equity and reserves 601 535 512 619 567 822
Equity attributable to owners of the parent 590 332 507 485 561 794
Non-controlling interests 11 203 5 134 6 028
Non-current liabilities 187 836 125 311 107 886
Interest-bearing liabilities 169 081 110 018 92 696
Deferred taxation liability 18 755 15 293 15 190
Current liabilities 129 374 120 747 134 458
Trade and other payables 61 935 53 084 56 062
Deferred revenue 11 987 13 093 11 237
Bank overdraft 589 471 485
Provisions 785 246 2 216
Taxation – 5 276 16 332
Interest-bearing liabilities 54 078 48 577 48 126
Total equity and liabilities 918 745 758 677 810 166
Net asset value per ordinary share (cents) 138,2 119,9 132,7
Note A: Accounting requirements necessitated the recognition of the full 36 months' business interruption insurance
proceeds in the year ended 30 June 2014, 27 months of which related to future periods. Normalised results include
the recognition of six months' business interruption insurance proceeds in the current period.
Reconciliation of headline earnings
Normalised Normalised
Unaudited Unaudited Audited Unaudited Unaudited
6 months 6 months 12 months 6 months 12 months
ended ended ended ended ended
31 December 31 December 30 June 31 December 30 June
R'000 2014 2013 2014 2014 2014
Profit attributable to owners
of the parent 60 111 73 238 154 808 66 783 126 450
Profit on disposal of property – (8 943) (13 203) – (13 203)
Profit on disposal of
plant and equipment (96) (6 611) – (96) –
Tax effect of above items 27 2 906 3 697 27 3 697
Headline earnings 60 042 60 590 145 302 66 714 116 944
Headline earning per ordinary
share (cents) 14,1 14,4 34,4 15,7 27,7
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 2014 2013 2014 2014 2013 2014
Metrofile Records Management 253 217 250 336 549 274 65 568 85 094 190 114
CSX Customer Services 43 619 34 402 67 381 1 943 1 491 971
Property Companies 26 683 24 600 50 610 26 683 24 600 50 610
Other 44 576 34 713 69 659 8 985 8 500 11 164
Intergroup (29 821) (30 041) (61 664) – – –
Total 338 274 314 010 675 260 103 179 119 685 252 859
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 2014 2013 2014 2014 2013 2014
Metrofile Records Management 54 188 73 634 166 226 366 173 287 486 313 368
CSX Customer Services 1 597 1 158 285 22 832 26 875 20 703
Property Companies 26 683 24 600 50 610 244 616 209 619 234 673
Other 5 638 5 117 5 279 88 270 61 643 68 536
Total 88 106 104 509 222 400 721 891 585 623 637 280
"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 to Metrofile (Pty) Limited
which encompasses the "Metrofile Records Management " division; 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 2014 2013 2014
Cash generated from operations before net working capital changes 98 824 109 668 252 044
Increase in net working capital 37 171 (58 588) (67 349)
Increase in normal net working capital (26 863) (58 588) (3 315)
Decrease/(increase) in net normal working capital due to insurance claim 64 034 – (64 034)
Cash generated from operations 135 995 51 080 184 695
Net finance costs paid (5 759) (7 001) (12 630)
Dividends declared (33 859) (27 144) (56 943)
Normal taxation paid (31 991) (22 020) (40 277)
Net cash inflow from operating activities 64 386 (5 085) 74 845
Net cash outflow from investing activities:
Investment in property: expansion (9 945) (18 409) (43 712)
Investment in plant and equipment: expansion (17 334) (18 699) (33 958)
Investment in property: replacement (8 161) (4 558) (16 450)
Investment in plant and equipment: replacement
Proceeds on disposal of property, plant and equipment 1 006 38 449 34 140
Increase in shareholding of subsidiary and acquisition of business (22 061) – –
Net cash outflow from financing activities:
Issue of shares in terms of vendor placements – – –
Loans repaid (15 582) (18 286) (40 907)
Loans drawn down 97 919 36 000 36 000
Net (decrease)/increase in cash and cash equivalents 90 228 9 412 9 958
Cash and cash equivalents at the beginning of the period 35 280 25 322 25 322
Cash and cash equivalents at the end of the period 125 508 34 734 35 280
Represented by:
Bank balances 126 097 35 205 35 765
Bank overdrafts (589) (471) (485)
Summarised statement of changes in equity
Total
equity
before
Accumu- minority Non-
Share Share lated Other apportion- controlling
capital premium losses reserves ment interest Total
Audited R'000 R'000 R'000 R'000 R'000 R'000 R'000
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
Shares issued in terms of share schemes – –
IFRS 2 Equity reserve relating to share schemes 2 238 2 238 2 238
Dividends declared (29 799) (29 799) (29 799)
Total comprehensive income
for the period ended 30 June 2014 81 570 300 81 870 894 82 764
Balance at 30 June 2014 2 601 570 893 (21 889) 10 189 561 794 6 028 567 822
Shares issued in terms of share schemes 23 18 043 18 066 18 066
IFRS 2 Equity reserv relating to share schemes 2 151 2 151 2 151
Share scheme settlement (12 474) (5 593) (18 067) (18 067)
Minority contribution on acquisition of subsidiary 3 982 3 982
Dividends declared (33 859) (33 859) (33 859)
Total comprehensive
income for the period ended 31 December 2014 60 111 136 60 247 1 193 61 440
Balance at 31 December 2014 2 624 588 936 (8 111) 6 883 590 332 11 203 601 535
Commentary on results
Profile
Metrofile is the market leader in both physical and digital information and records management in Africa. The group is
represented in the six major provinces of South Africa, Mozambique, Nigeria, Zambia, the United Arab Emirates and,
through subsidiary CSX Customer Services, undertakes contracts in various 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, 66,5% of these facilities are owned by the
group. The rest of the group's divisions lease their premises. 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.
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 as 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 56,17% whilst
its largest shareholder is its empowerment partner, Mineworkers Investment Company ("MIC") which owns 34,41% 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 and the Middle East remains driven by the demand for the similar services to those
provided by the group in South Africa. With Metrofile now established in Mozambique, Nigeria, Zambia and the United
Arab Emirates, the group's expansion strategy continues to take cognisance of potential target countries' business
and political environment, governance, market attractiveness, language, infrastructure, logistics, education and labour
force, potential client industries and overall risk.
The group amended its dividend cover to 1,75 times for the 2015 reporting year and continually reviews this position.
Financial review
IFRS required that 36 months' business interruption insurance proceeds relating to the KwaZulu-Natal fire in 2013 be
recognised in full in the 2014 financial year. Normalised results are accordingly presented again, recognising this receipt
over 36 months in order to present more representative results for each affected reporting period.
Normalised revenue increased by 10,8% to R347,9 million. Normalised headline earnings increased by 10.1% to
R66,7 million.
Normalised headline earnings per share ("HEPS") increased by 8,8% to 15,7 cents.
Cash generated from operations before net working capital changes decreased by 9,9% whilst the receipt of some
significant prior period trade receivables, together with the settlement proceeds of the previously mentioned insurance
claim resulted in an increase in cash generated from operations of 166,2%.
Capital investments of R35,4 million were effected mainly for expansion and included the rebuild of the KZN facility
destroyed in the prior period, the acquisition of property in Mbombela which is currently being developed, and the
purchase of racking and equipment of R14,9 million required for growth.
Acquisitions
In line with its bolt-on geographical acquisition strategy, the group acquired interests in the following subsidiaries
during the period:
- A 60% shareholding in FlexiFile Limited (Zambia); and
- A 60% shareholding in E-File Masters LLC (United Arab Emirates).
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr MC McGowan, 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 2014.
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 R0,67 million
(2014: R0,63 million) were paid during the period under review.
Directorate and corporate governance
The Board comprises two executive and six non-executive directors, of whom four are independent directors.
Mr IN Matthews remains the lead independent director. During the period under review, Mr RM Buttle resigned as CFO,
and Mr MC McGowan was appointed in his stead, effective 1 August 2014. Ms P Langeni was appointed as a member
of the Nomination and Remuneration Committees with effect from 1 July 2014.
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 1,75 times,
as announced by the Board on SENS on 19 November 2014.
Notice is hereby given that an interim gross cash dividend of 9,0 cents per share in respect of the period ended
31 December 2014 has been declared payable, from income reserves, to the holders of ordinary shares recorded in
the books of the company on Friday, 10 April 2015. The last day to trade cum-dividend will therefore be Wednesday,
1 April 2015 and Metrofile shares will trade ex-dividend from Thursday, 2 April 2015. Payment of the dividend will be
made on Monday, 13 April 2015. Share certificates may not be dematerialised or rematerialised between Thursday,
2 April 2015 and Friday, 10 April 2015, 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 7.650 cents per share. The company's issued share capital is
427 084 010 shares and the company's tax number is 9375/066/71/0.
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 R80,6 million for the next five years. Capital investment plans for the full financial year
amount to R85,2 million.
Events after the reporting date
There have been no material events after the reporting date.
Outlook
Metrofile remains confident that it will maintain its position in a challenging economic and business environment,
and will continue to seek growth opportunities across all business units, both locally and in the MEA region.
This statement has not been reviewed or audited by Metrofile's auditors.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
5 March 2015
Senderwood
Gauteng
Directors:
CS Seabrooke#*(Chairman)
MS Bomela*(Deputy Chairperson)
GD Wackrill(CEO)
MC McGowan(CFO)
P Langeni#*
IN Matthews†*
CN Pongweni*
SV Zilwa#*
†Lead independent
#Independent
*Non-executive
Company Secretary:
P Atkins
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
To download a copy of the unaudited group results announcement for the six months ended 31 December 2014,
please visit www.metrofileholdings.com
Date: 05/03/2015 05:30:00 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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