Wrap Text
Preliminary Audited Group Results for the Year Ended 30 June 2015
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")
PRELIMINARY AUDITED GROUP RESULTS
for the year ended 30 June 2015
Normalised
revenue
14,0%
Normalised HEPS
16,6%
Normalised EBITDA
11,6%
Dividends per share
FOR THE YEAR
40,0%
Summarised income statement
Normalised Normalised
Audited Audited unaudited unaudited
12 months 12 months 12 months 12 months
ended ended ended ended
30 June 30 June 30 June 30 June
R'000 Note 2015 2014 2015 2014
Revenue 701 898 675 260 720 873 632 498
Earnings before interest, taxation,
depreciation and amortisation
(EBITDA) 1 218 426 252 859 236 603 212 029
Depreciation (31 636) (30 459) (32 320) (29 015)
Operating profit before finance costs 186 790 222 400 204 283 183 014
Net finance costs (13 084) (12 630) (12 402) (12 630)
Finance income 7 492 1 380 7 492 1 380
Finance costs (20 576) (14 010) (19 894) (14 010)
Interest paid on loans (20 576) (12 374) (19 894) (12 374)
Interest paid relating to financial instruments – (1 636) – (1 636)
Profit before taxation 173 706 209 770 191 881 170 384
Taxation (46 244) (53 674) (51 333) (42 646)
Profit for the period 127 462 156 096 140 548 127 738
Attributable to:
Owners of the parent 124 620 154 808 137 706 126 450
Non-controlling interests 2 842 1 288 2 842 1 288
Profit for the period 127 462 156 096 140 548 127 738
Further information
Number of ordinary shares in issue (thousands) 427 084 423 240 427 084 423 240
Weighted average number of ordinary
shares in issue (thousands) 425 831 422 315 425 831 422 315
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 29,3 36,7 32,3 29,9
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 29,2 36,3 32,3 29,7
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 29,3 34,4 32,3 27,7
Dividend per ordinary share
Interim divided per ordinary share –
paid (cents) 9,0 7,0 9,0 7,0
Final dividend per ordinary share –
proposed/paid (cents) 12,0 8,0 12,0 8,0
Summarised statement of comprehensive income
Normalised Normalised
Audited Audited unaudited unaudited
12 months 12 months 12 months 12 months
ended ended ended ended
30 June 30 June 30 June 30 June
R'000 2015 2014 2015 2014
Profit for the period 127 462 156 096 140 548 127 738
Other comprehensive income for the
period net of tax (773) 3 087 (773) 3 087
Hedge accounting for fair value on interest
rate swaps 133 960 133 960
Currency movement on translation of foreign
subsidiaries (906) 2 127 (906) 2 127
Total comprehensive income for the period 126 689 159 183 139 775 130 825
Attributable to:
Owners of the parent 123 812 156 803 136 898 128 445
Non-controlling interests 2 877 2 380 2 877 2 380
Summarised statement of financial position
Audited Audited
as at as at
30 June 30 June
R'000 Notes 2015 2014
ASSETS
Non-current assets 660 262 593 583
Property 2 258 349 234 673
Plant and equipment 202 051 186 024
Goodwill 194 615 171 666
Long-term receivable 1 574 –
Deferred taxation assets 3 673 1 220
Current assets 281 405 216 583
Inventories 14 549 12 947
Trade receivables 121 245 92 798
Other receivables 25 094 75 073
Bank balances 120 517 35 765
Total assets 941 667 810 166
EQUITY AND LIABILITIES
Equity and reserves 630 407 567 822
Equity attributable to owners of the parent 617 520 561 794
Non-controlling interests 12 887 6 028
Non-current liabilities 175 160 107 886
Interest-bearing liabilities 3 156 125 92 696
Deferred taxation liabilities 19 035 15 190
Current liabilities 136 100 134 458
Trade and other payables 71 305 56 062
Deferred revenue 12 331 11 237
Bank overdraft 49 485
Provisions 2 436 2 216
Taxation 2 616 16 332
Interest-bearing liabilities 3 47 363 48 126
Total equity and liabilities 941 667 810 166
Net asset value per ordinary share (cents) 144,6 132,7
Notes:
1. The comparative prior year EBITDA includes the capital profit in respect of the disposal of
property, plant and equipment destroyed in the fire in KwaZulu-Natal.
2. The majority of the group's properties have been pledged as security against certain loans
to the group. Long-term interest-bearing liabilities represent the Metrofile (Pty) Ltd amortising
and revolving facilities.
3. Short-term interest-bearing liabilities include the portions of the Metrofile (Pty) Ltd
amortising loan facility and group company loan agreements payable within one year.
The Metrofile (Pty) Ltd borrowings are JIBAR linked, whilst the other borrowings are prime linked.
Reconciliation of headline earnings
Normalised Normalised
Audited Audited unaudited unaudited
12 months 12 months 12 months 12 months
ended ended ended ended
30 June 30 June 30 June 30 June
R'000 2015 2014 2015 2014
Profit attributable to owners of the parent 124 620 154 808 137 706 126 450
Profit on disposal of property – (13 203) – (13 203)
Profit on disposal of plant and equipment (231) – (231) –
Tax effect of above items 205 3 697 205 3 697
Headline earnings 124 594 145 302 137 680 116 944
Headline earning per ordinary share (cents) 29,3 34,4 32,3 27,7
Summarised 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 2015 2014 2015 2014
Records Management 545 217 553 310 145 224 186 804
CSX Customer Services 95 975 67 381 6 512 971
Property Companies 53 366 50 610 53 366 51 496
Other 70 992 65 623 13 324 13 588
Inter-group (63 652) (61 664) – –
Total 701 898 675 260 218 426 252 859
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 2015 2014 2015 2014
Records Management 121 423 163 135 405 372 315 224
CSX Customer Services 5 788 285 22 346 19 015
Property Companies 53 366 51 496 259 106 250 567
Other 6 213 7 484 56 555 52 474
Total 186 790 222 400 743 379 637 280
"Records Management" represents the global document storage & management and scanning business units
which are managed and operated geographically.
"Property Companies" represent properties occupied by the local Records Management business units.
"Other" includes Metrofile Holdings, Rainbow Paper Management, Global Continuity and Cleardata.
Summarised statement of cash flows
Audited Audited
12 months 12 months
ended ended
30 June 30 June
R'000 2015 2014
Cash generated from operations before
net working capital changes 222 315 252 044
Decrease (increase) in net working capital 38 211 (67 349)
Increase in normal net working capital (25 823) (3 315)
Decrease (increase) in net normal working capital due to insurance claim 64 034 (64 034)
Cash generated from operations 260 526 184 695
Net finance costs paid (13 084) (12 630)
Dividends declared (72 297) (56 943)
Normal taxation paid (58 568) (40 277)
Net cash inflow from operating activities 116 577 74 845
Net cash outflow from investing activities:
Investment in property: expansion (6 354) (43 712)
Investment in plant and equipment:
expansion (35 536) (33 958)
Investment in property:
replacement (17 322) –
Investment in plant and equipment:
replacement (7 952) (16 450)
Proceeds on disposal of property, plant and equipment 1 684 34 140
Increase in shareholding of subsidiary and acquisition of businesses (28 575) –
Net cash outflow from financing activities:
Loans repaid (35 253) (40 907)
Loans drawn down 97 919 36 000
Net increase in cash and cash equivalents 85 188 9 958
Cash and cash equivalents at the beginning of the period 35 280 25 322
Cash and cash equivalents at the end of the period 120 468 35 280
Represented by:
Bank balances 120 517 35 765
Bank overdrafts (49) (485)
Summarised statement of changes in equity
Total
Retained equity
earnings 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 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 – – – 4 570 4 570 – 4 570
Share scheme
settlement – – (12 763) (2 263) (15 026) – (15 026)
Dividends declared – – (56 943) (56 943) – (56 943)
Total comprehensive
income for the
year ended
30 June 2014 – – 154 808 1 995 156 803 2 380 159 183
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 24 18 043 – – 18 067 – 18 067
IFRS 2 Equity
reserve relating
to share schemes – – – 4 211 4 211 – 4 211
Share scheme
settlement – – (12 474) (5 593) (18 067) – (18 067)
Minority contribution
on acquisition of
subsidiary – – – – 3 982 3 982
Dividends declared – – (72 297) – (72 297) – (72 297)
Total comprehensive
income for the
year ended
30 June 2015 – – 124 620 (808) 123 812 2 877 126 689
Balance at
30 June 2015 2 625 588 936 17 960 7 999 617 520 12 887 630 407
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 87 100 square metres of warehousing and office space. In accordance with its owner/lessee
model, 68% 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 continues 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.
In order to optimise shareholder returns, the Group aims to maintain a Debt:EBITDA ratio above 1,5:1.
As the Group is highly cash generative the actual ratio has been below the target for some time
notwithstanding cash commitments for acquisitions and building program. Shareholders were accordingly
advised in June that the Board had resolved to reduce dividend cover to 1,5 times. In addition the Board
has now approved a share buyback program.
Financial review
Metrofile's earnings in the prior year were favourably impacted by the immediate accounting recognition
of the proceeds of a 36-month business interruption insurance claim. As a result, the Group continues to
present normalised earnings reflecting the insurance proceeds spread over the indemnity period.
Normalised revenue increased by 14,0% to R720,9 million, normalised EBITDA by 11,6% to R236,6 million
and normalised EBIT by 11,6% to R204,2 million.
Normalised headline earnings increased by 17,7% to R137,7 million.
Normalised basic earnings per share ("EPS") increased 8,0% and normalised headline earnings per share ("HEPS")
increased by 16,6% to 32,3 cents and 32,3 cents respectively.
Cash generated from operations before net working capital changes decreased by 11,8% 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 41,1%.
Due to continued strong cash generation, the Board announced the reduction of the target dividend cover
to 1,75 times in November 2014, and subsequently to 1,5 times on 19 June 2015. The total dividend per share
increased by 40,0% to 21,0 cents (2014: 14,9 cents).
Capital investments of R67,2 million were effected mainly for expansion and included the rebuild of
the KZN facility, the acquisition of property in Mbombela which is nearing completion of development,
and the purchase of racking and equipment of R30,4 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% interest in FlexiFile Limited (Zambia);
- A 60% interest in E-File Masters LLC (United Arab Emirates).
Basis of preparation and accounting policies
The directors take full responsibility for the preparation of these Preliminary Audited Group Results.
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
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.
Audit opinion
The independent auditors, Deloitte & Touche, have issued their unmodified audit opinion, on the Group's
financial statements for the 30 June 2015 year-end, in accordance with International Standards on Auditing.
These 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 the financial statements and the audit
report are available for inspection at the Company's registered office. The auditor's report does not
necessarily report on the information contained in this announcement. Shareholders are therefore advised
that in order to obtain a full understanding of the nature of the auditor's engagement, they should obtain
a full copy of the auditor's report, together with the accompanying financial information from the issuer'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 a consulting agreement, and as approved at the Annual General Meeting, the MIC fees of
R1,35 million (2014: R1,27 million) were paid during the year 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 continued improvements in the group's financial structure and cash flows have enabled the Board
to improve the dividend cover, for the full year, from 2,0 times in the comparative year to 1,5 times
for the current year. The cover is based on Normalised EPS.
Notice is hereby given that a final gross cash dividend of 12,0 cents per share in respect of the year
ended 30 June 2015 has been declared payable to the holders of ordinary shares recorded in the books
of the company on Friday, 2 October 2015. The last day to trade cum-dividend will therefore be Friday,
25 September 2015 and Metrofile shares will trade ex-dividend from Monday, 28 September 2015. Payment
of the dividend will be made on Monday, 5 October 2015. Share certificates may not be dematerialised
or rematerialised between Monday, 28 September 2015 and Friday, 2 October 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 10,2 cents per share.
The Company's issued share capital remains unchanged at 427 084 010 shares. 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 R79,9 million for the next five years. Capital
investment plans for the forthcoming financial year amount to R116,0 million.
Events after the reporting date
There have been no material events after the reporting.
Outlook
Metrofile anticipates continued growth notwithstanding the current challenging economic and business
environment, and will continue to seek opportunities across all business units, both locally
and internationally.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
24 August 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
Date: 24/08/2015 05:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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