Wrap Text
Unaudited condensed consolidated interim results for the six months ended 30 November 2016
OneLogix Group Limited
(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 2016
Highlights
Revenue up 12%
Trading profit up 8% (up 13% excluding once-off retrenchment costs)
HEPS up 1% (up 8% excluding once-off retrenchment costs)
Diluted core HEPS up 7% (up 13% excluding once-off retrenchment costs)
Cash generated from operations before net finance costs, taxations and dividends up 47%
Dividend of 8 cents per share
Group companies maintain advantageous market positions
Commentary
Notwithstanding very difficult trading conditions, OneLogix continued its trading growth trajectory
with positive results for the six months to November 2016 ("the period").
During the period the group consolidated its value proposition while effectively assimilating a
number of recent acquisitions and property infrastructure developments. This process has now
been concluded.
Review of operations
Despite poor market conditions, the majority of the OneLogix businesses performed satisfactorily.
The strategy of mitigating earnings concentration risk, by more evenly spreading earnings reliance
across the group's logistics market segments, is now entrenched.
Abnormal Logistics
OneLogix Vehicle Delivery Services ("VDS") and OneLogix Commercial Vehicle Delivery Services
("CVDS") experienced mixed results. The businesses overall traded down in line with a contracting
and increasingly competitive market. Both businesses are recognised as industry leaders in quality
of service and retained their respective market shares.
OneLogix Projex managed to gain market share in a very challenging environment, which is
testament to the increasingly strong management team and service offering. The business's value
proposition was strengthened by the recent merger with Madison and relocation of the Gauteng
depot to the group's new Denne Road facility in Brakpan.
Primary Product Logistics
OneLogix United Bulk also secured market share wins in its various liquid bulk market segments.
This is attributable to continued investment in fleet on the back of secured business and a strong
management team which has taken full advantage of synergies from the acquisitions of Vision and
Cryogas Express (effective 1 October 2015).
OneLogix Linehaul started the year in a lethargic market, particularly in Zambia, compounded by
border bottlenecks and an appreciating Rand. Recent initiatives, which include further investment
in fleet and the relocation to more efficient premises at the group's Denne Road facility, together
with the improved copper price, bode well for future performance.
Jackson performed well and retained its market share despite the impact of the severe drought.
The business is a market leader in the top-end logistics of agricultural products in South and
southern Africa. By leveraging its reputation and niche service offering, Jackson successfully
expanded its customer base in the period. A large portion of cargo moved by Jackson is export
oriented.
Buffelshoek also performed satisfactorily. Lingering effects of the severe drought in its established
agricultural niche have been offset by a profitable and sustainable entry into the industrial mineral
market.
Other - Logistics Services
Atlas 360 produced a pleasing turnaround by refocusing on its market leadership position in truck
repairs.
OneLogix Cargo Solutions performed well. The recent foray into a project-related niche within the
clearing and forwarding market, has proven successful and provided synergies with the operation's
established core competency of import and export warehouse handling and storage.
Financial results
Revenue increased by 12% to over R1 billion, predominantly as a result of the contributions for
the full interim period of Vision and Cryogas Express. Organic revenue growth was marginal due
to the market conditions in which the group's significant businesses operate.
Trading profit was up 8% to R91,5 million and was adversely affected by a once-off charge of
R4,4 million relating to the retrenchment costs incurred by VDS in addressing the three-year
successive decline in the auto-logistics market. Excluding the retrenchment costs, trading profit
would have been R95,9 million and in line with top-line growth at 13%.
As in the prior reporting period, trading profit was further impacted by an R8,1 million charge
relating to our ongoing skills upliftment programme that was escalated in terms of the amended
B-BBEE Codes. The vast majority of this charge will be recovered by learnership allowances
afforded by SARS. This has contributed to the effective tax charge of 20,8% on profit for the period.
Trading margins, excluding the retrenchment costs, remained resilient and were consistent with
the previous reporting period at 9,5%.
Operating profit was impacted by an increased non-cash flow IFRS 2 share-based payment
charge of R7,6 million (2015: R6,7 million) relating to our employee participation schemes.
Operating profit increased 4% from R79,3 million to R82,7 million for the period.
Net finance costs increased by 42% to R29,1 million as a result of the group's recent considerable
investments in property infrastructure, acquisitions and fleet. Interest cover on trading profit of
3,3 times (November 2015: 4,2 times), excluding the once-off retrenchment costs, remains above
our targeted levels. However, we remain cognisant of gearing levels in the context of the prevailing
trading climate in making further investment decisions.
Earnings per share ("EPS") declined 4% while headline earnings per share ("HEPS") was 1%
higher for the period. EPS and HEPS, excluding the once-off retrenchment costs, would have
increased by 4% and 8%, respectively.
As previously communicated we aim to present stakeholders with the same information that
management utilises to evaluate the performance of the group's operations. Accordingly, we
present core headline earnings per share ("core HEPS"), which is headline earnings (as calculated
based on SAICA Circular 2/2015) adjusted for the amortisation charge of intangible assets
recognised on business combinations and charges relating to share-based payments. Core HEPS
and diluted core HEPS increased by 3% and 7%, respectively, to 20,9 cents per share. Core HEPS
and diluted core HEPS, excluding the once-off retrenchment costs, would have increased by 9%
and 13%, respectively. There was no dilutionary effect on core HEPS in the period as the volume
weighted average share price for the period is below the consideration due from the employee
participation schemes to which potential dilution in issued ordinary shares relates. A reconciliation
of headline earnings to core headline earnings is provided in the financial results.
Cash generated from operations before net finance costs, taxation and dividends increased 47%
to R166,4 million. This reflects the continuing ability of management to convert trading profits into
cash and the strong focus on working capital discipline.
The group invested R134 million in operational infrastructure as follows: R115,5 million in fleet (of
which R76,1 million relates to expansion), R14,4 million in property, R3 million in IT-related assets
and R1,1 million for other assets. Net proceeds of R12,9 million were received on the disposal of
fleet.
New interest-bearing borrowings of R120,6 million were raised to fund fleet financing, offset by
the repayment of interest-bearing borrowings of R104,9 million. Net cash resources at the
reporting date amounted to R117,8 million. Net debt of R529,1 million at 30 November 2016 was
slightly less than at 31 May 2016 at R531,1 million.
New investments in properties, acquisitions and fleet have substantially increased the size of
OneLogix's operations and constant evaluation of performance in market context is paramount to
determining future investments.
Dividend
Shareholders are advised that an interim gross dividend, No 6, of 8 cents per share in respect of
the six months ended 30 November 2016 was declared on Thursday, 2 February 2017.
This is a dividend as defined in the Income Tax Act, 1962, and is payable from income reserves.
The South African dividends tax ("DT") rate is 15%. The net dividend payable to shareholders who
are subject to DT is 6,8 cents per share, while it is 8 cents per share for those shareholders who
are exempt from dividends tax. The income tax reference number of the company is 9361229710.
At the declaration date, the issued share capital, excluding treasury shares held in relation to the
Employee and Management Share participation schemes, was 251 946 289 ordinary shares of no
par value.
The salient dates in respect of the interim dividend are as follows:
2017
Last day to trade cum dividend Tuesday, 28 March
Shares will trade ex dividend Wednesday, 29 March
Record date Friday, 31 March
Payment of dividend Monday, 3 April
Shareholders may not dematerialise or rematerialise their shares between Wednesday,
29 March 2017 and Friday, 31 March 2017, both dates inclusive.
The dividend will be transferred to dematerialised shareholders' CSDP accounts/broker accounts
on Monday, 3 April 2017. Certificated shareholders' dividend payments will be paid to certificated
shareholders' bank accounts on or about Monday, 3 April 2017.
The interim dividend, amounting to R20,2 million, has not been recognised as a liability in the
consolidated interim financial statements. It will be recognised in shareholders' equity for the year
ending 31 May 2017.
OneLogix will continue to assess the payment of interim and final dividends in light of the board's
ongoing review of earnings, after providing for long-term growth and cash/debt resources, the
amount of reserves available using a going concern assessment and the covenants of facility
providers.
People
We continue to place high priority on our people and therefore devote much effort to building
high-quality teams within an enabling culture that is aimed at achieving our strategic objectives.
Our recent repeat win of the international honour of "Top Employer" and best performer in the
Logistics Industry reflect this commitment. We therefore remain highly appreciative of our
management team and staff, who continue to perform at the highest levels of excellence.
We further thank all our business partners, customers, suppliers, business advisors and
shareholders for their invaluable support.
Prospects
Trading conditions will remain tough for all group companies for the foreseeable future. Given this
premise, we will focus on extracting maximum efficiencies from existing businesses and securing
market share growth. Each of the group companies is well placed in its respective market, has a
proven business model and is led by proficient management with quality staff. At the same time,
we are always mindful of start-up and acquisitive opportunities and will continue to assess these
as appropriate.
Basis of presentation
The unaudited condensed consolidated interim results for the six months ended 30 November
2016 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 the Financial
Reporting Standards Council, the JSE Listings Requirements and the requirements of the
Companies Act, No. 71 of 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 2016.
Accounting policies and computations are consistently applied as in the annual financial
statements.
During the current interim period the group adopted those standards and interpretations in issue
and effective for the interim period. The adopting of these new and amended standards and
interpretations has not had a significant impact on the group's adopted accounting policies.
The interim financial statements have been approved by the board of directors on 2 February
2017. These results have been compiled under the supervision of the Financial Director,
GM Glass CA(SA). The interim results have not been reviewed or reported on by the group
auditors, PricewaterhouseCoopers Inc.
The unaudited condensed consolidated interim financial statements are available on the
company's website www.onelogix.com.
By order of the board
2 February 2017
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2016 2015 2016
% R'000 R'000 R'000
Revenue 12 1 006 029 896 656 1 778 605
Operating and administration costs 12 (858 843) (765 432) (1 529 542)
Depreciation and amortisation 20 (63 288) (52 927) (113 214)
(Loss)/profit on sale of assets (1 233) 954 (7)
Operating profit 4 82 665 79 251 135 842
Share of profits from associate >100 5 712 2 663 6 313
Finance income (50) 685 1 359 3 238
Finance costs 37 (29 812) (21 812) (51 362)
Gain on acquisition - - 699
Profit before taxation (4) 59 250 61 461 94 730
Taxation (12 320) (13 170) (18 863)
Profit for the period (3) 46 930 48 291 75 867
Other comprehensive income
Movement in foreign currency
translation reserve* 420 338 510
Deferred tax increase on revaluation
reserve due to CGT inclusion rate increase* - - (1 291)
Total comprehensive income for the period (3) 47 350 48 629 75 086
* The component of other comprehensive
income may subsequently be reclassified
to profit and loss during future reporting
periods.
Profit attributable to:
- Non-controlling interest (6) 6 282 6 709 10 653
- Owners of the parent (2) 40 648 41 582 65 214
(3) 46 930 48 291 75 867
Other comprehensive income
attributable to:
- Non-controlling interest - - -
- Owners of the parent 420 338 (781)
420 338 (781)
Total comprehensive income
attributable to:
- Non-controlling interest (6) 6 282 6 709 10 653
- Owners of the parent (2) 41 068 41 920 64 433
(3) 47 350 48 629 75 086
Number of shares in issue ('000):
- Total issued less treasury shares 251 946 251 946 251 946
- Weighted 1 251 946 249 030 250 488
- Diluted 1 251 946 249 030 250 488
- Diluted measure for core
earnings purposes (2) 251 946 257 887 253 646
Basic and headline earnings per
share (cents)
Basic earnings per share (cents) (4) 16,1 16,7 26,0
Diluted basic earnings per share (cents) (4) 16,1 16,7 26,0
Headline earnings per share (cents) 1 16,5 16,4 25,7
Diluted headline earnings per share (cents) 1 16,5 16,4 25,7
Core headline earnings per share (cents) 3 20,9 20,3 34,6
Diluted core headline earnings per
share (cents) 7 20,9 19,6 34,1
Reconciliation of headline earnings
and core headline earnings
Profit attributable to owners of the parent (2) 40 648 41 582 65 214
Loss/(profit) on disposal of property,
plant and equipment less taxation
and non-controlling interests 858 (625) (81)
Gain on acquisition - - (699)
Headline earnings 1 41 506 40 957 64 434
Share-based payments 7 589 6 712 15 177
Amortisation of intangible assets acquired
as part of a business combination less
taxation and non-controlling interests 3 512 2 792 6 993
Core headline earnings 4 52 607 50 461 86 604
Segmental split of amortisation of
intangible assets acquired in a business
combination less taxation and
non-controlling interests
Abnormal Logistics 66 66 131
Primary Products Logistics 2 354 1 634 4 677
Other 268 268 537
Share in associate 824 824 1 648
26 3 512 2 792 6 993
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
at at at
30 November 30 November 31 May
2016 2015 2016
% R'000 R'000 R'000
Assets
Non-current assets 15 1 406 183 1 227 157 1 346 150
Property, plant and equipment 1 197 847 1 008 829 1 136 474
Intangible assets 158 422 163 724 163 724
Investment in associate 42 498 46 627 36 785
Loans and receivables 6 068 6 731 7 118
Deferred taxation 1 348 1 246 2 049
Current assets 9 437 111 399 191 384 983
Inventories 23 515 22 635 24 122
Trade and other receivables 293 672 287 018 259 127
Taxation 2 186 1 695 1 722
Cash resources 117 738 87 843 100 012
Non-current assets held-for-sale - 12 340 -
Total assets 12 1 843 294 1 638 688 1 731 133
Equity and liabilities
Equity 11 811 166 728 714 758 584
Ordinary shareholders' funds 770 366 688 308 722 075
Non-controlling interests 40 800 40 406 36 509
Liabilities
Non-current liabilities 17 598 273 510 819 589 883
Interest-bearing borrowings 476 910 391 211 466 463
Deferred tax 121 363 119 608 123 420
Current liabilities 9 433 855 399 155 382 666
Trade and other payables 260 901 218 596 215 793
Interest-bearing borrowings 169 794 172 500 164 655
Taxation 3 160 6 664 2 218
Bank overdraft - 1 395 -
Total equity and liabilities 12 1 843 294 1 638 688 1 731 133
Net asset value per share (cents) 12 305,8 273,2 286,6
Net tangible asset value per share (cents) 17 242,9 208,2 221,6
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2016 2015 2016
% R'000 R'000 R'000
Net cash generated from operating
activities 100 121 709 60 704 173 195
Cash generated from operations 47 166 393 112 940 262 914
Finance income 685 1 359 3 238
Finance costs (29 812) (21 812) (51 362)
Taxation paid (13 200) (14 644) (24 456)
Dividend paid to non-controlling interests (2 357) (2 022) (2 022)
Dividend paid to shareholders - (15 117) (15 117)
Net cash flows from investing activities (86) (14 238) (104 314) (102 207)
Purchase of property, plant and equipment (26 937) (37 921) (63 637)
Purchase of intangible assets (1 286) (1 390) (2 926)
Proceeds on disposal of property,
plant and equipment 12 935 23 564 39 818
Acquisitions of subsidiaries - (89 984) (89 984)
Decrease in non-current receivables 1 050 1 417 1 030
Dividend received from associate - - 13 492
Net cash flows from financing activities >100 (90 184) (29 736) (130 912)
Increase in borrowings 14 719 37 547 64 858
Repayment of borrowings (104 903) (67 251) (190 638)
Acquisition of non-controlling interests - (32) (5 132)
Net movement in cash resources 17 287 (73 346) (59 924)
Cash resources at beginning of the period 100 012 159 470 159 470
Exchange gain on cash resources 439 324 466
Cash resources at end of the period 117 738 86 448 100 012
Segmental analysis
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2016 2015 2016
% R'000 R'000 R'000
Revenue
Abnormal Logistics (1) 452 768 457 436 881 761
Primary Products Logistics 25 461 992 370 073 767 017
Reportable segments 11 914 760 827 509 1 648 778
Other 32 91 269 69 147 129 827
12 1 006 029 896 656 1 778 605
Segment results
Abnormal Logistics 1 53 337 52 704 96 018
Primary Products Logistics 10 61 662 55 813 106 250
Reportable segments 6 114 999 108 517 202 268
Other >100 5 905 2 482 (1 787)
Corporate items (4) (24 973) (25 990) (49 455)
Trading profit (excluding
retrenchment costs) 13 95 931 85 009 151 026
Retrenchment costs in
Abnormal Logistics segment (4 444) - -
Trading profit 8 91 487 85 009 151 026
Unallocated: Share-based payments
- employees 13 (7 589) (6 712) (15 177)
(Loss)/profit on sale of assets >100 (1 233) 954 (7)
Operating profit 82 665 79 251 135 842
Share of profits from associate >100 5 712 2 663 6 313
Finance Income (50) 685 1 359 3 238
Finance costs 37 (29 812) (21 812) (51 362)
Gain on acquisition - - 699
Profit before taxation (4) 59 250 61 461 94 730
Total assets
Abnormal Logistics 12 834 164 743 513 821 003
Primary Products Logistics 8 835 343 770 592 761 654
Reportable segments 10 1 669 507 1 514 105 1 582 657
Other 24 75 634 61 195 57 221
Corporate items >100 52 121 13 820 50 699
Investment in associate (9) 42 498 46 627 36 785
Unallocated: Taxation and
deferred taxation 20 3 534 2 941 3 771
12 1 843 294 1 638 688 1 731 133
Total liabilities
Abnormal Logistics 9 443 593 405 122 445 601
Primary Products Logistics 17 398 160 341 719 346 762
Reportable segments 13 841 753 746 841 792 363
Other 65 46 032 27 931 37 106
Corporate items >100 19 820 8 930 17 442
Unallocated: Taxation and
deferred taxation (1) 124 523 126 272 125 638
13 1 032 128 909 974 972 549
The group has authorised capital
expenditure over the next six months
of R152,3 million. R68,9 million is
already committed.
Commitments
Operating lease commitments
(not exceeding seven years) 133 580 96 948 90 560
Condensed consolidated statement of changes in equity
Reva-
Stated Treasury Retained luation
capital shares income reserve
R'000 R'000 R'000 R'000
At 1 June 2015 - audited 395 425 (143 430) 406 368 28 040
Dividends declared to non-
controlling interests - - - -
Dividend paid to OneLogix
shareholders - - (15 117) -
Non-controlling interest acquired
as a result of a business
combination - - - -
Transactions with non-
controlling interests 30 450 - - -
Share-based payment
reserve movement - - - -
Profit for the year - - 65 214 -
Other comprehensive income - - - (1 291)
At 31 May 2016 - audited 425 875 (143 430) 456 465 26 749
Dividends declared to
non-controlling interests - - - -
Share-based payment
reserve movement - - - -
Transactions with non-
controlling interests - - - -
Profit for the year - - 40 648 -
Other comprehensive income - - - -
At 30 November 2016 - unaudited 425 875 (143 430) 497 113 26 749
Share- Foreign
based currency
Other payment translation
reserves reserve reserve
R'000 R'000 R'000
At 1 June 2015 - audited 153 4 474 508
Dividends declared to non-controlling interests - - -
Dividend paid to OneLogix shareholders - - -
Non-controlling interest acquired
as a result of a business combination - - -
Transactions with non-controlling interests - - -
Share-based payment reserve movement - 15 177 -
Profit for the year - - -
Other comprehensive income - - 510
At 31 May 2016 - audited 153 19 651 1 018
Dividends declared to
non-controlling interests - - -
Share-based payment reserve movement - 7 589 -
Transactions with non-controlling interests - - -
Profit for the year - - -
Other comprehensive income - - 420
At 30 November 2016 - unaudited 153 27 240 1 438
Transactions
with non- Non-
controlling controlling
interests interests Total
R'000 R'000 R'000
At 1 June 2015 - audited (47 550) 44 430 688 418
Dividends declared to non-controlling interests - (2 022) (2 022)
Dividend paid to OneLogix shareholders - - (15 117)
Non-controlling interest acquired
as a result of a business combination - 2 174 2 174
Transactions with non-controlling interests (16 856) (18 726) (5 132)
Share-based payment reserve movement - - 15 177
Profit for the year - 10 653 75 867
Other comprehensive income - - (781)
At 31 May 2016 - audited (64 406) 36 509 758 584
Dividends declared to
non-controlling interests - (2 357) (2 357)
Share-based payment reserve movement - - 7 589
Transactions with non-controlling interests (366) 366 -
Profit for the year - 6 282 46 930
Other comprehensive income - - 420
At 30 November 2016 - unaudited (64 772) 40 800 811 166
Corporate information
Directors
SM Pityana (Chairman)*#
NJ Bester
GM Glass (FD)
AJ Grant*#
IK Lourens (CEO)
B Mathews*#
CV McCulloch (COO)
K Schoeman*
LJ Sennelo*#
* Non-executive
# Independent
There were no changes to the board during the period.
Registered office
46 Tulbagh Road
Pomona
Kempton Park
PostNet Suite 10
Private Bag X27
Kempton Park
1620
Company secretary
CIS Company Secretaries (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank
2195
PO Box 61673
Marshalltown
2107
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank
2195
PO Box 61051
Marshalltown
2107
Sponsor
Java Capital
www.onelogix.com
Date: 02/02/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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