Wrap Text
Summary of the audited consolidated results for the year ended 31 May 2017
OneLogix Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/004519/06)
JSE share code: OLG
ISIN: ZAE000026399
("OneLogix" or "the company" or "the group")
Provisional report
Summary of the audited consolidated results for the year ended 31 May 2017 ("the year")
Highlights
Final dividend of 5 cents per share - total dividend of 13 cents per share
Trading profit# up 7% (excluding VDS retrenchment costs*, up 10%)
HEPS up 15% (excluding VDS retrenchment costs*, up 20%)
Diluted core HEPS up 8% (excluding VDS retrenchment costs*, up 12%)
Cash generated from operations pre net finance costs, tax and dividends up 16%
Agreement reached for DriveRisk disposal
Sale and leaseback of Umlaas Road nearing completion
* Once-off.
# Trading profit is operating profit excluding the loss on sale of capital assets and share-based
payment charges.
Commentary
OneLogix has sustained its continuing growth trajectory with a further year of continued improvement,
despite coming off the high base of FY 2016 and a still unfavourable trading environment.
For the past ten-year period OneLogix has achieved compound annual growth in revenue of 22%, 17%
in trading profit, 14% in core and diluted core headline earnings per share and a 24% increase in net
tangible asset value to 255,60 cents per share.
Our business growth strategy has continually proven its mettle in a protracted, tough economic
environment. Our acquisitions to date have successfully diversified the group away from our former
reliance on the auto-logistics industry and continued to perform well in the year, and our four in-house
start-ups have steadily increased their contribution to group earnings.
Earnings growth for the year was almost entirely organic in nature, reflecting the resilient business
models of the majority of our group businesses and their strong management teams.
We have always stated that "our people are our success". Our genuine commitment to our
management and staff across the group was reflected in an international Top Employer award in 2017
for the third consecutive year. Almost all new positions in the group are filled from within and our
minimal staff churn and insignificant absenteeism rates bear testament to our enabling and empowering
culture, which is a key driver of our long-term sustainability.
In the year, a recorded fourth consecutive year of contraction in the auto-logistics market necessitated
a retrenchment exercise in OneLogix Vehicle Delivery Services ("VDS"). Excluding the once-off costs
associated therewith, double-digit growth would have been achieved in all key group financial indicators.
Two post year-end strategic initiatives (see "post year-end events") will significantly strengthen our
balance sheet going forward, reducing gearing and generating a reasonable cash pile for prudent
future growth initiatives.
Review of operations
Abnormal Logistics
Overall the segment returned a stable performance on a par with last year. VDS and CVDS faced down
increasingly competitive and still-contracting local and cross-border auto-logistics markets. In order
to position for continued long-term sustainability against this backdrop, VDS undertook a once-off
retrenchment exercise in the year. To this end VDS also seized an attractive market rationalisation
opportunity towards year-end and acquired the complementary fleet of a niche cross-border operator.
Prior years' expansion of the services offering in OneLogix Projex helped the business to maintain its
market share notwithstanding the ongoing macro challenges.
Primary Product Logistics
Our acquisition trail to date in this segment has proven successful. Movers of top-end and niched
agricultural product which were acquired in late 2015 - Jackson and Buffelshoek - countered the
recessionary economy and lingering drought by leveraging their established reputations and innovating
entry in new markets. OneLogix United Bulk effectively capitalised on the operating synergies derived
from the 2016 Vision and Cryogas Express acquisitions and investment in fleet.
Other - Logistics Services
Our logistics support services delivered a strong performance, continuing the prior year turnaround
of Atlas360 and reaping the benefits of OneLogix Cargo Solutions' successful foray into project-based
clearing and forwarding activities.
Financial results
Revenue increased by 12% to just under R2 billion.
Trading profit was up 7% to R161,3 million. Growth was constrained by a once-off charge of R4,4 million
relating to the retrenchment costs incurred by VDS. Excluding the retrenchment costs, trading profit
would have been R165,7 million, which 10% year-on-year growth more closely mirrors top-line growth.
As in the prior reporting period, trading profit was also impacted by a R15,7 million charge relating
to our ongoing skills upliftment programme. The vast majority of this charge will be recovered by
learnership allowances afforded by SARS. This has contributed to the effective tax charge of 23,7% on
profit for the year.
Trading margins, excluding the retrenchment costs, remained resilient and were slightly down at 8,3%
relative to the previous year at 8,5%.
Current year profit was impacted positively by a reduced non-cash flow, IFRS 2 share-based payment
charge of R10,6 million (2016: R15,2 million) for our management and employee participation schemes.
Changes to assumptions around the core HEPS performance condition decreased the management
participation scheme charge.
Operating profit increased by 9% from R135,8 million to R148,1 million.
Net finance costs increased by 20% to R57,6 million as a result of the group's recent considerable
investments in property infrastructure, acquisitions and fleet. Interest cover on trading profit of
2,9 times (May 2016: 3,1 times), excluding the once-off retrenchment costs, remains within our targeted
levels. However, we remain mindful of gearing levels in the context of the prevailing trading climate
when making further investment decisions.
The sales of the Umlaas Road properties and our DriveRisk investment (see "post year-end events")
are regarded as "decidedly probable" in terms of the accounting standards.
On the statement of financial position, the respective carrying values of our investment in DriveRisk
and the Umlaas Road properties, are included under "non-current assets held-for-sale" and liabilities
directly related to the Umlaas Road properties are included under "non-current liabilities held-for-sale".
Of the balance of R256,4 million relating to non-current assets held-for-sale, R223,3 million relates to
the Umlaas Road properties and R33,2 million to DriveRisk.
During the year owner-occupied properties were revalued by independent valuers in line with the
group's accounting policy to revalue properties on a triennial basis. The fair values as determined
resulted in an increase in the carrying value of properties by R18,0 million, with an after tax impact
of R14,0 million recognised in other comprehensive income.
Earnings per share ("EPS") increased 12% while headline earnings per share ("HEPS") was 15% higher
for the year. EPS and HEPS, excluding the once-off retrenchment costs, would have increased by 16%
and 20%, respectively.
Core HEPS and diluted core HEPS increased by 7% and 8%, respectively, to 36,9 cents per share.
Core HEPS and diluted core HEPS, excluding the once-off retrenchment costs, would have increased
by 10% and 12%, respectively.
A reconciliation of headline earnings to core headline earnings is provided in the financial results.
There was no dilutionary effect on core HEPS for the year as the volume weighted average share price
was below the consideration due from the employee participation schemes, to which potential dilution in
issued ordinary shares relates. There was no dilutionary effect on EPS and HEPS for the year as there
are no dilutionary instruments in issue.
Cash generated from operations pre net finance costs, tax and dividends increased 16% to
R303,9 million. This reflects the continuing ability of the organisation to translate profits into cash
and the continued strong focus on working capital management.
The group invested R230,5 million in operational infrastructure as follows: R188,3 million in fleet (of
which R131,5 million relates to expansion), R27,4 million in property, R11,8 million for other assets and
R3 million in IT-related assets. Net proceeds of R20,3 million were received on the disposal of fleet.
New interest-bearing borrowings of R160,9 million were raised to fund fleet financing, offset by the
repayment of interest-bearing borrowings of R195,4 million. Net cash resources at the reporting date
amounted to R95 million. Net debt of R522,3 million at 31 May 2017 (including debt related to the
disposal of Umlaas Road properties) was slightly less than the R531,1 million at 31 May 2016. Net debt,
excluding debt relating to the disposal of Umlaas Road properties, amounts to R365,9 million.
Net debt (excluding debt related to the disposal of Umlaas Road properties) to ordinary shareholders'
equity has reduced significantly to 46% from 74%.
Recent 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 a final gross dividend, No. 7, of 5 cents per share in respect of the year
ended 31 May 2017, was declared on Thursday, 24 August 2017. This results in an annual dividend of
13 cents per share, comprising an interim dividend of 8 cents per share together with the final dividend.
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 20%. The net dividend payable to shareholders who are
subject to DT is 4 cents per share, while it is 5 cents per share for those shareholders who are exempt
from DT. 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 final dividend are as follows:
2017
Last day to trade cum dividend Tuesday, 3 October
Shares will trade ex dividend Wednesday, 4 October
Record date Friday, 6 October
Payment of dividend Monday, 9 October
Shareholders may not dematerialise or rematerialise their shares between Wednesday, 4 October 2017
and Friday, 6 October 2017, both dates inclusive.
The dividend will be transferred to dematerialised shareholders' CSDP accounts/broker accounts on
Monday, 9 October 2017. Certificated shareholders' dividend payments will be paid to certificated
shareholders' bank accounts on or about Monday, 9 October 2017.
The final dividend, amounting to R12,6 million, has not been recognised as a liability in the consolidated
financial statements. It will be recognised in shareholders' equity for the year ending 31 May 2018.
It is the group's preference to continue declaring a dividend. However, future dividends will continue to
be evaluated in the context of prevailing trading, infrastructural and related business demands facing
the company.
Post year-end events
Further to previous SENS announcements, we have now reached an agreement for the disposal of our
49% shareholding in DriveRisk to a 51% black-owned consortium. We will realise R65 million from this
particularly successful investment.
As also previously announced, we have restructured our position with respect to the Umlaas Road
properties in KwaZulu-Natal (subject to regulatory approvals), and will shortly realise its sale to and
leaseback from a 51% black-owned consortium. The consideration payable for the property is
R240 million in cash. This initiative has made available capital to be deployed into higher returning
investments in line with our proven conservative investment strategy and significantly deleveraged our
statement of financial position. The disposal proceeds will be applied first to reduce debt with the
balance being used to fund future growth opportunities and investments. It is anticipated that the
effective date will be 15 September 2017.
People
The group continues to prioritise building high-quality, high-performance teams within an enabling
culture. The re-awarded international honour of "Top Employer" by the Top Employer Institute and
rating of OneLogix as "Best performer - Logistics Industry" reflect our success in this regard.
We remain deeply appreciative of our management team and staff who continue to perform at the
highest levels of excellence. We bid a fond farewell to Dick van de Zee, co-founder and MD of
OneLogix CVDS, who will be retiring shortly after a distinguished 10 years at the helm of the business.
We further thank all our business partners, customers, suppliers, business advisors and shareholders
for their continued invaluable support.
Prospects
Trading conditions for all group companies will remain difficult for the foreseeable future. OneLogix
will continue to focus on extracting maximum efficiencies from existing businesses in order to protect
and grow their individual market shares in their respective niche markets.
We are confident that the experienced, stable management teams with their proven entrepreneurial
skills will continue to guide our businesses to ongoing growth. Our tested business models have
ensured that each is well-placed within its respective market and well-equipped to withstand
economic buffeting.
The group remains mindful of start-up and acquisitive opportunities and will continue to assess these
appropriately. Our strengthened balance sheet following the two post year-end initiatives above
provides an appropriate springboard for this.
Basis of presentation
The summary consolidated financial statements for the year ended 31 May 2017 have been prepared
in accordance with the requirements of the JSE Listings Requirements for provisional reports, and the
requirements of the Companies Act applicable to summary financial statements. The JSE Listings
Requirements require provisional reports to be prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards
("IFRS") and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
containing, as a minimum, the information required by IAS 34: Interim Financial Reporting. The
accounting policies applied in the preparation of the consolidated financial statements from which the
summary consolidated financial statements were derived are in terms of International Financial
Reporting Standards and are consistent with those accounting policies applied in the preparation of the
previous consolidated financial statements. These results have been compiled under the supervision
of the Financial Director, GM Glass CA(SA).
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 ("core HEPS"),
which are headline earnings (as calculated based on SAICA Circular 2/2015) adjusted for the
amortisation charge of intangibles recognised on business combinations and charges relating to
share-based payments. Please note that core headline earnings is not an IFRS defined measure.
The group adopted all new and amended accounting pronouncements that were effective for OneLogix
during the current year. None of these had a material impact on the results.
This summarised report is extracted from audited information, but is not itself audited. The auditor,
Mazars Gauteng, has expressed an unmodified opinion on the consolidated financial statements from
which these summary consolidated financial statements were derived. A copy of the auditor's report
on the annual financial statements is available at the company's registered office, together with the
financial statements identified in the auditor's reports.
The directors take full responsibility for the preparation of these provisional condensed consolidated
financial statements and for ensuring that the financial information has been correctly extracted from
the underlying audited annual financial statements.
The auditor's report does not necessarily report on all of the information contained in this provisional
report. Shareholders are therefore advised that in order to obtain a full understanding of the nature of
the auditor's engagement they should obtain a copy of their report together with the accompanying
financial information form the company's registered office.
These summary consolidated financial statements were approved by the board of directors on
24 August 2017. The audited summary consolidated financial statements are available on the
company's website www.onelogix.com.
By order of the board
24 August 2017
Summarised consolidated statement of comprehensive income
Audited Audited
year ended year ended
31 May 31 May
2017 2016
% R'000 R'000
Continuing operations
Revenue 12 1 995 888 1 778 605
Operating and administration costs 12 (1 712 294) (1 529 542)
Depreciation and amortisation 17 (132 875) (113 214)
Loss on sale of assets (2 573) (7)
Operating profit 9 148 146 135 842
Share of profits from associate
(non-current asset held-for sale) 14 213 6 313
Finance income (49) 1 664 3 238
Finance costs 15 (59 289) (51 362)
Gain on acquisition - 699
Profit before taxation 11 104 734 94 730
Taxation (20 958) (18 863)
Profit for the year 10 83 776 75 867
Other comprehensive income
Movement in foreign currency translation reserve* 700 510
Deferred tax increase on revaluation reserve due
to CGT inclusion rate increase* - (1 291)
Revaluation of land and buildings 13 968 -
Total comprehensive income for the year 31 98 444 75 086
Profit attributable to:
- Non-controlling interest 1 10 808 10 653
- Owners of the parent 12 72 968 65 214
10 83 776 75 867
Total comprehensive income attributable to:
- Non-controlling interest 1 10 808 10 653
- Owners of the parent 36 87 636 64 433
31 98 444 75 086
Basic and diluted basic earnings per share (cents) 12 29,0 26,0
Notes to statement of comprehensive income
Number of shares in issue ('000):
- Total issued less treasury shares - 251 946 251 946
- Weighted 1 251 946 250 488
- Diluted 1 251 946 250 488
- Diluted measure for core earnings purposes (1) 251 946 253 646
Earnings per share measures (cents)
Headline and diluted headline earnings
per share (cents) 15 29,6 25,7
Core headline earnings per share (cents) 7 36,9 34,6
Diluted core headline earnings per share (cents) 8 36,9 34,1
Reconciliation of headline earnings and core
headline earnings
Profit attributable to owners of the parent 12 72 968 65 214
Loss/(profit) on disposal of property, plant and
equipment less taxation and non-controlling interests 1 649 (81)
Gain on acquisition - (699)
Headline earnings 16 74 617 64 434
Share based payments 10 555 15 177
Amortisation of intangible assets acquired as part
of a business combination less taxation and
non-controlling interests 7 826 6 993
Core headline earnings 7 92 998 86 604
* The component of other comprehensive income may subsequently be reclassified to profit
and loss during future reporting years.
Analysis of reconciling amounts between earnings, headline earnings and core headline earnings
Non-
Gross Income controlling Net
amount tax interest amount
R'000 R'000 R'000 R'000
Loss on disposal of property,
plant and equipment 2 573 (719) (205) 1 649
Share based payments 10 555 - - 10 555
Amortisation of intangible assets
acquired as part of a business
combination 11 353 (2 717) (810) 7 826
Summarised consolidated statement of financial position
Audited at Audited at
31 May 31 May
2017 2016
% R'000 R'000
ASSETS
Non-current assets (12) 1 182 371 1 346 150
Property, plant and equipment 1 018 770 1 136 474
Intangible assets 155 868 163 724
Investment in associate - 36 785
Loans and receivables 6 425 7 118
Deferred taxation 1 308 2 049
Current assets 7 412 201 384 983
Inventories 22 914 24 122
Trade and other receivables 292 016 259 127
Taxation 2 255 1 722
Cash resources 95 016 100 012
Non-current assets held-for-sale 256 380 -
Total assets 7 1 850 952 1 731 133
EQUITY AND LIABILITIES
Equity 11 845 070 758 584
Ordinary shareholders' funds 799 775 722 075
Non-controlling Interests 45 295 36 509
Liabilities
Non-current liabilities (26) 438 519 589 883
Interest-bearing borrowings 309 997 466 463
Deferred tax 128 522 123 420
Current liabilities 7 410 947 382 666
Trade and other payables 256 797 215 793
Interest-bearing borrowings 150 878 164 655
Taxation 3 272 2 218
Non-current liabilities held-for-sale 156 416 -
Total equity and liabilities 7 1 850 952 1 731 133
Notes to statement of financial position
Net asset value per share (cents) 11 317,4 286,6
Net tangible asset value per share (cents) 15 255,6 221,6
Summarised consolidated statement of cash flows
Audited Audited
year ended year ended
31 May 31 May
2017 2016
% R'000 R'000
Net cash generated from operating activities 18 205 099 173 195
Cash generated from operations 16 303 863 262 914
Finance income 1 664 3 238
Finance costs (59 289) (51 362)
Taxation paid (18 626) (24 456)
Dividend paid to shareholders (22 513) (17 139)
Net cash flows from investing activities (65) (36 068) (102 207)
Purchase of property, plant and equipment (69 547) (63 637)
Purchase of intangible assets (5 303) (2 926)
Proceeds on disposal of property,
plant and equipment 20 266 39 818
Acquisitions of subsidiaries - (89 984)
Decrease in non-current receivables 693 1 030
Cash flows from associate
(non-current asset held-for-sale) 17 823 13 492
Net cash flows from financing activities 33 (174 752) (130 912)
Increase in borrowings 20 677 64 858
Repayment of borrowings (195 429) (190 638)
Acquisition of non-controlling interests - (5 132)
Net movement in cash resources (5 721) (59 924)
Cash resources at the beginning of the year 100 012 159 470
Exchange gain on cash resources 725 466
Cash resources at the end of the year 95 016 100 012
Summarised consolidated statement of changes in equity
Trans-
actions
with non-
Stated Treasury Retained controlling
capital shares income interests
R'000 R'000 R'000 R'000
At 1 June 2015 - audited 395 425 (143 430) 406 368 (47 550)
Dividends paid to shareholders - - (15 117) -
Non-controlling interest acquired
as a result of a business combination - - - -
Transactions with non-controlling
interests 30 450 - - (16 856)
Share-based payment reserve
movement - - - -
Profit for the year - - 65 214 -
Other comprehensive income - - - -
At 31 May 2016 - audited 425 875 (143 430) 456 465 (64 406)
Dividends paid to shareholders - - (20 156) -
Share-based payment reserve
movement - - - -
Non-controlling interest acquired
as a result of a business combination - - - (335)
Profit for the year - - 72 968 -
Other comprehensive income - - - -
At 31 May 2017 - audited 425 875 (143 430) 509 277 (64 741)
Share-
based
Revaluation Other payment
reserve reserves reserve
R'000 R'000 R'000
At 1 June 2015 - audited 28 040 153 4 474
Dividends paid to 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 (1 291) - -
At 31 May 2016 - audited 26 749 153 19 651
Dividends paid to shareholders - - -
Share-based payment reserve
movement - - 10 555
Non-controlling interest acquired
as a result of a business combination - - -
Profit for the year - - -
Other comprehensive income 13 968 - -
At 31 May 2017 - audited 40 717 153 30 206
Foreign
currency Non-
translation controlling
reserve interests Total
R'000 R'000 R'000
At 1 June 2015 - audited 508 44 430 688 418
Dividends paid to shareholders - (2 022) (17 139)
Non-controlling interest acquired
as a result of a business combination - 2 174 2 174
Transactions with non-controlling
interests - (18 726) (5 132)
Share-based payment reserve
movement - - 15 177
Profit for the year - 10 653 75 867
Other comprehensive income 510 - (781)
At 31 May 2016 - audited 1 018 36 509 758 584
Dividends paid to shareholders - (2 357) (22 513)
Share-based payment reserve
movement - - 10 555
Non-controlling interest acquired
as a result of a business combination - 335 -
Profit for the year - 10 808 83 776
Other comprehensive income 700 - 14 668
At 31 May 2017 - audited 1 718 45 295 845 070
Segmental analysis
Audited Audited
year ended year ended
31 May 31 May
2017 2016
% R'000 R'000
Revenue
Abnormal logistics 6 933 245 881 761
Primary products logistics 18 907 394 767 017
Reportable segments 12 1 840 639 1 648 778
Other 20 155 249 129 827
12 1 995 888 1 778 605
Segment results
Abnormal logistics 5 100 963 96 018
Primary products logistics (5) 100 739 106 250
Reportable segments (0) 201 702 202 268
Other >100 12 882 (1 787)
Corporate items (1) (48 866) (49 455)
Trading profit (excluding restructuring costs) 10 165 718 151 026
Restructuring costs at VDS (4 444) -
Trading profit 7 161 274 151 026
Unallocated:
Share-based payments - employees (30) (10 555) (15 177)
Loss on sale of assets >100 (2 573) (7)
Operating profit 148 146 135 842
Total assets
Abnormal logistics (21) 645 763 821 003
Primary products logistics 9 827 158 761 654
Reportable segments (7) 1 472 921 1 582 657
Non-current assets held-for-sale 256 380 -
Other 16 66 291 57 221
Corporate items 2 51 797 50 699
Investment in associate - 36 785
Taxation and deferred taxation (6) 3 563 3 771
7 1 850 952 1 731 133
Total liabilities
Abnormal logistics (42) 258 159 445 601
Primary products logistics 13 391 389 346 762
Reportable segments (18) 649 548 792 363
Non-current liabilities held-for-sale 156 416 -
Other 30 48 136 37 106
Corporate items 15 19 988 17 442
Taxation and deferred taxation 5 131 794 125 638
3 1 005 882 972 549
The Group has authorised capital expenditure
over the next year of R80,6 million.
Commitments
Operating lease commitments
(not exceeding seven years) 163 165 90 560
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 year.
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
Johannesburg
2196
PO Box 61673
Marshalltown
2107
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank
Johannesburg
2196
PO Box 61051
Marshalltown
2107
Sponsor
Java Capital
www.onelogix.com
Date: 24/08/2017 07:30:00 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
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