Wrap Text
Unaudited interim group results
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 UNAUDITED
INTERIM GROUP RESULTS
for the six months ended 31 December 2016
REVENUE
R380,6 million
1,6% increase
EBITDA
R127,5 million
4,7% increase
HEPS
16,7 cents per share
3,7% increase
DIVIDENDS PER SHARE FOR THE PERIOD
13 cents per share
18,2% increase
Summarised consolidated
income statement
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
R'000 Note 2016 2015 2016
Revenue 380 651 374 687 777 577
Earnings before interest, taxation, depreciation and
amortisation (EBITDA) 1 127 456 121 687 235 024
Depreciation (17 556) (18 726) (35 737)
Operating profit before finance costs 109 900 102 961 199 287
Net finance costs (8 882) (7 194) (14 687)
Finance income 1 791 2 887 4 646
Finance costs (10 673) (10 081) (19 333)
Profit before taxation 101 018 95 767 184 600
Taxation (27 610) (25 823) (48 949)
Profit for the period 73 408 69 944 135 651
Attributable to:
Owners of the parent 70 777 68 608 130 129
Non-controlling interests 2 631 1 336 5 522
Profit for the period 73 408 69 944 135 651
Further information
Number of ordinary shares in issue (thousands) 422 846 427 084 425 084
Weighted average number of ordinary shares in issue (thousands) 424 994 426 800 425 944
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 16,7 16,1 30,6
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 16,7 16,1 30,6
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 16,7 16,1 30,5
Dividend per ordinary share
Interim dividend per ordinary share - proposed/paid (cents) 13,0 11,0 11,0
Final dividend per ordinary share - proposed/paid (cents) 19,0
Summarised consolidated
statement of comprehensive income
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
R'000 2016 2015 2016
Profit for the period 73 408 69 944 135 651
Other comprehensive income for the period net of tax*
Currency movement on translation of foreign subsidiary (3 889) 696 656
Total comprehensive income for the period 69 519 70 640 136 307
Attributable to:
Owners of the parent 68 433 68 532 130 551
Non-controlling interests 1 086 2 108 5 756
*All items will subsequently be reclassified to profit and loss
Reconciliation of headline earnings
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
R'000 2016 2015 2016
Profit attributable to owners of the parent 70 777 68 608 130 129
Profit on disposal of plant and equipment (71) (191) (294)
Tax effect of above items 65 112 179
Headline earnings 70 771 68 529 130 014
Headline earning per ordinary share (cents) 16,7 16,1 30,6
Summarised segmental information
Revenue EBITDA
Unaudited Unaudited Audited Unaudited Unaudited Audited
six months six months 12 months six months six months 12 months
ended ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec 30 June
R'000 2016 2015 2016 2016 2015 2016
Records Management 313 867 295 330 612 318 91 623 80 825 159 346
Property Companies
(Occupied by Records
Management businesses) 33 082 29 755 59 901 33 082 29 755 59 901
CSX Customer Services 31 400 42 566 95 997 (2 541) (477) (1 060)
Other 41 335 42 495 79 904 5 292 11 584 16 837
Intergroup (39 033) (35 459) (70 543) - - -
Total 380 651 374 687 777 577 127 456 121 687 235 024
Operating profit Tangible assets
Unaudited Unaudited Audited Unaudited Unaudited Audited
six months six months 12 months six months six months 12 months
ended ended ended ended ended ended
31 Dec 31 Dec 30 June 31 Dec 31 Dec 30 June
R'000 2016 2015 2016 2016 2015 2016
Records Management 77 984 65 900 131 438 327 686 339 333 339 755
Property Companies
(Occupied by Records
Management businesses) 33 082 29 755 59 901 305 742 272 850 294 785
CSX Customer Services (2 723) (772) (1 647) 24 589 26 724 23 590
Other 1 557 8 078 9 595 97 799 95 932 67 088
Total 109 900 102 961 199 287 755 816 734 839 725 218
"Records Management" represents the global document storage and management and scanning business units which are managed
and operated geographically.
Other" includes Metrofile Holdings, Rainbow Paper Management, Global Continuity and Cleardata.
Summarised consolidated
statement of financial position
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
R'000 Notes 2016 2015 2016
ASSETS
Non-current assets 743 913 688 925 722 858
Property 1 304 439 272 222 280 134
Plant and equipment 214 727 216 953 217 018
Goodwill 217 177 194 615 218 573
Intangible assets 1 770 - 1 868
Investment 449 - 449
Long-term receivable 525 730 559
Deferred tax asset 4 826 4 405 4 257
Current assets 236 125 244 933 227 506
Inventories 18 805 17 333 19 443
Trade receivables 126 702 123 958 136 293
Other receivables 42 448 36 289 46 053
Bank balances 48 170 67 353 25 717
Total assets 980 038 933 858 950 364
EQUITY AND LIABILITIES
Equity and reserves 641 594 639 960 660 341
Equity attributable to owners
of the parent 620 679 624 965 643 398
Non-controlling interests 20 915 14 995 16 943
Non-current liabilities 199 850 165 386 144 942
Interest-bearing liabilities 2 174 263 140 552 123 297
Deferred taxation liability 25 587 24 834 21 645
Current liabilities 138 594 128 512 145 081
Trade and other payables 66 856 67 374 69 658
Deferred revenue 13 413 12 517 13 427
Bank overdraft 917 - 345
Provisions 137 414 2 678
Taxation 764 884 9 768
Interest-bearing liabilities 2 56 507 47 323 49 205
Total equity and liabilities 980 038 933 858 950 364
Net asset value
per ordinary share (cents) 146,8 146,3 151,4
1 The majority of the Group's properties have been pledged as security against certain loans to the Group.
2 Long-term interest-bearing liabilities represent the Metrofile (Pty) Ltd amortising and revolving
facilities. 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.
Summarised consolidated statement of cash flows
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 June
R'000 2016 2015 2016
Cash generated from operations before
net working capital changes 118 985 126 978 229 066
Decrease/(increase) in net working capital 8 477 (22 458) (41 208)
Cash generated from operations 127 462 104 520 187 858
Net finance costs paid (8 882) (7 194) (14 687)
Dividends declared (80 823) (51 166) (97 835)
Normal taxation paid (33 231) (22 479) (39 724)
Net cash inflow from operating activities 4 526 23 681 35 612
Net cash outflow from investing
activities:
Investment in property: expansion (24 305) (12 965) (21 786)
Investment in plant and equipment:
expansion (15 252) (43 847) (44 578)
Investment in property: replacement - (907) -
Investment in plant and equipment:
replacement (1 707) (4 222) (7 192)
Proceeds on disposal of property,
plant and equipment 352 759 1 506
Additions to intangible assets - - (1 967)
Investment in associate company - - (449)
Increase in shareholding of subsidiary
and acquisition of business - - (25 256)
Net cash inflow/(outflow) from financing
activities:
Loans repaid (16 733) (15 614) (30 986)
Loans drawn down 75 000 - -
Net increase/(decrease) in cash
and cash equivalents 21 881 (53 115) (95 096)
Cash and cash equivalents
at the beginning of the period 25 372 120 468 120 468
Cash and cash equivalents
at the end of the period 47 253 67 353 25 372
Summarised consolidated statement of changes in equity
Total equity
Accumulated before
Share Share profits/ Other minority Non-
R'000 capital premium (losses) reserves apportionment controlling Total
Balance at 30 June 2015 2 625 588 936 17 960 7 999 617 520 12 887 630 407
Purchase of Treasury Shares (9 577) (9 577) (9 577)
IFRS 2 Equity reserve relating to share schemes 4483 (2 910) 1 573 1 573
Share scheme settlement (1 833) (1 833) (1 833)
Dividends declared (51 250) (51 250) (51 250)
Total comprehensive income for the period
ended 31 December 2015 68 608 (76) 68 532 2 108 70 640
Balance at 31 December 2015 2 625 579 359 37 968 5 013 624 965 14 995 639 960
IFRS 2 Equity reserve relating to share schemes (2 650) 5 856 3 206 3 206
Minority contribution on acquisition of subsidiary (1 700) (1 700)
Dividends declared (46 792) (46 792) (46 792)
Total comprehensive income for the period
ended 30 June 2016 61 521 498 62 019 3 648 65 667
Balance at 30 June 2016 2 625 579 359 50 047 11 367 643 398 16 943 660 341
Purchase of Treasury Shares (11 009) (11 009) (11 009)
IFRS 2 Equity reserve relating to share schemes 3 477 3 477 3 477
Minority contribution on acquisition of subsidiary 2 886 2 886
Share scheme settlement (2 797) (2 797) (2 797)
Dividends declared (80 823) (80 823) (80 823)
Total comprehensive income for the period
ended 31 December 2016 70 777 (2 344) 68 433 1 086 69 519
Balance at 31 December 2016 2 625 568 350 40 001 9 703 620 679 20 915 641 594
Commentary on the results
Profile
Metrofile is Africa's market leader in records and information
management, offering a range of physical storage and digital
services, as well as the confidential destruction and recycling of
records. Founded and listed in South Africa, the Group is growing
steadily in the Middle East and other African countries.
The Records Management division operates from 52 facilities,
at 27 locations, covering 101 309 square metres of warehousing and
office space.
Metrofile is a 57,4% black-owned company. Its empowerment partner
and shareholder of reference, Mineworkers Investment Company
("MIC"), owns 36,6% of Metrofile's equity.
Overview of interim results
After three years of reporting normalised results following an
insurance payment for a fire at a Metrofile facility, our reporting
reverts to actual results in the 2016/17 financial year.
Revenue increased by 1,6% to R380,7 million, whilst headline
earnings increased by 3,3% to R70,8 million. Basic earnings per
share ("EPS") and headline earnings per share ("HEPS") both
increased by 3,7% to 16,7 cents.
Cash generated from operations before net working capital changes
decreased by 6,3% while cash generated from operations increased
by 21,9%.
R41,3 million in capital expenditure was incurred of which
R39,6 million was allocated primarily to expanding facilities.
The Group's net interest bearing debt amounted to R230,7 million at
the period end, which equates to an annualised Debt: EBITDA ratio of
approximately 0,9 times.
Business growth has been adversely impacted in this reporting
period by weak economic conditions in South Africa and a refocusing
process initiated in the Group.
Robust growth outside of South Africa
Despite a certain degree of socio-economic disruption in the Arabian
Gulf region, Metrofile recorded double-digit revenue contributions
from our operations outside of South Africa. These markets offer
significant growth opportunities and Metrofile continues to seek
strategic acquisitions in targeted geographies.
In order to maximise the opportunities on the African continent, we
have appointed an executive reporting directly to the CEO to oversee
Metrofile's operations in Africa, beyond South Africa's borders.
Value creation strategy
Metrofile intends to enhance its growth prospects and expansion by:
- Targeting more direct growth organically aimed at widening its
customer base in South Africa;
- Broadening its offering of products and services, particularly in
the digital space;
- Expanding in Africa, the Middle East and other emerging markets
through acquisition and partnerships; and
- Evolving into a technology company grounded on record storage.
More specifically, Metrofile is:
- Rolling out best practices from each business unit across the
group;
- Re-inventing and enhancing our services based on shifting
customer needs; and
- Bringing in new or outsource partners in complementary niches.
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 AC 500 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. These interim results were prepared using accounting policies
that comply with IFRS, and are consistent with those applied in the
financial statements for the year ended 30 June 2016.
Related parties
In terms of a consulting agreement, and as approved at the Annual
General Meeting, the MIC fees of R0,77 million (2016: R0,72 million)
were paid during the period under review.
Directorate and corporate governance
The Board currently comprises of two executive and seven
non-executive directors, of whom four are independent directors.
There have been no changes to the composition of the Board
during the period under review. Mr IN Matthews remains the lead
independent director.
Dividends
The board has targeted maintaining debt levels at least at 1,5 times
EBITDA. However, continued strong cash generation has resulted in
leverage remaining below this level. At the end of the previous financial
year, the Board resolved to reduce dividend cover from a target of
1,5 times to a target range of 1,25 to 1,5 times and until the minimum
debt levels were achieved, the Board resolved to pay dividends with
cover below the target range.
The interim dividend cover for the period has accordingly been
increased by 18,2% to 13,0 cents per share representing cover of
1,3 times.
Notice is hereby given that an interim gross cash dividend of
13,0 cents per share in respect of the period ended 31 December
2016 has been declared payable, from income reserves, to the
holders of ordinary shares recorded in the books of the Company on
Friday, 7 April 2017. The last day to trade cum-dividend will therefore
be Tuesday, 4 April 2017 and Metrofile shares will trade ex-dividend
from Wednesday, 5 April 2017. Payment of the dividend will be on
Monday, 10 April 2017. Share certificates may not be dematerialised
or rematerialised from Wednesday, 5 April 2017 (which is ex-date) to
Friday, 7 April 2017, 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 20% which will result in a final net cash
dividend of 10,4 cents per share. The Company's issued share capital
at the period end is 422 846 064 shares and the Company's tax
number is 9375/066/71/0.
Commitments
Metrofile owns or leases premises based on the prevailing economic
realities in each country where we operate. Operating lease
commitments amount to R98,0 million for the next five years. Capital
investment plans for the full financial year amount to R130,5 million.
Events after the reporting date
- Subscription of additional shares by MIC Investment Holdings
("MICIH")
On 4 January 2017, MICIH, a subsidiary of MIC, acquired an
additional 8 056 258 Metrofile shares to raise its stake in Metrofile
by 2,0% to 36,6% in total, net of Treasury Shares, as approved by
shareholders in December 2016.
- Closed period share buy-back programme
Subsequent to the period end, the Company initiated a closed
period share buy-back program, the details of which are reflected
below.
There have been no other material events after the reporting date.
Share buy-backs
The Company has acquired shares through the market as follows:
15 December 2016 to 31 December 2016
2 370 840 shares at a price range of R4,80 to R5,01
1 January 2017 to 3 March 2017
6 915 366 shares at a price range of R4,81 to R5,21 (through a closed
period buying programme.)
There are accordingly 423 986 956 shares in issue, net of treasury
shares, at 6 March 2017.
Outlook and opportunities
Data and information management is growing in importance as the
world becomes increasingly digitally connected. Metrofile is placed in
the forefront of an industry that is evolving rather than shrinking. As the
value of transforming raw data into usable information is recognised
and becomes widespread, the wealth of data that Metrofile stores or
digitises is increasingly a sought after resource.
Growth in our industry will also be driven by incoming legislation
in South Africa and our targeted economies. This will compel
organisations to prioritise the effective storage and recording of their
customer information.
We expect a reasonable year despite trading conditions, and further
progress in implementing our growth strategies.
This statement has not been reviewed or audited by Metrofile's
auditors.
Christopher Seabrooke Pfungwa Serima
Non-executive Chairman Chief Executive Officer
6 March 2017
Senderwood
Gauteng
Corporate information
Directors
CS Seabrooke@* (Chairman)
MS Bomela* (Deputy Chairman)
PG Serima (CEO)
MC McGowan (CFO)
P Langeni@*
Registered office
41 Wordsworth Avenue CN Pongweni*
Senderwood IN Matthews†*
Bedfordview GD Wackrill*
2007 SV Zilwa@*
www.metrofileholdings.com
† Lead independent
Sponsor
@ Independent
The Standard Bank of South Africa Limited
* Non-executive
Transfer secretaries
Computershare Investor Services (Pty) Ltd Company Secretary
Rosebank Towers, 15 Biermann Avenue, P Atkins
Rosebank 2196
6 March 2017
Date: 06/03/2017 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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