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Audited Summarised Group Results for the 12 months ended 30 June 2017
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")
AUDITED SUMMARISED GROUP RESULTS
for the 12 months ended 30 June 2017
EBITDA
UP
5,2%
R247,3 MILLION
Headline EEarnings Per Share
UP
4,3%
31,8 CENTS PER SHARE
DIVIDENDS PER SHARE
FOR THE YEAR
30 CENTS
0,0%
CASH GENERATED
FROM OPERATIONS
UP
38,8%
R276,2 MILLION
REVENUE
DOWN
-1.0%
R769,2 MILLION
Summarised consolidated income statement
Audited Audited
12 months ended 12 months ended
R'000 Note 30 June 2017 30 June 2016
Revenue 769 239 777 577
Earnings before interest, taxation, depreciation and
amortisation (EBITDA) 1 247 329 235 024
Depreciation (34 917) (35 737)
Operating profit before finance costs 212 412 199 287
Net finance costs (18 056) (14 687)
Finance income 3 649 4 646
Finance costs (21 705) (19 333)
Profit before taxation 194 356 184 600
Taxation (54 979) (48 949)
Profit for the year 139 377 135 651
Attributable to:
Owners of the parent 135 019 130 129
Non-controlling interests 4 358 5 522
Profit for the year 139 377 135 651
Further information
Number of ordinary shares in issue (thousands) 421 103 425 084
Weighted average number of ordinary shares in issue (thousands) 424 554 425 944
Basic earnings per ordinary share
Basic earnings per ordinary share (cents) 31,8 30,6
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents) 31,8 30,6
Headline earnings per ordinary share
Headline earnings per ordinary share (cents) 31,8 30,5
Dividend per ordinary share
Interim dividend per ordinary share - paid (cents) 13,0 11,0
Final dividend per ordinary share - proposed/paid (cents) 17,0 19,0
Summarised consolidated
statement of comprehensive income
Audited Audited
12 months ended 12 months ended
R'000 30 June 2017 30 June 2016
Profit for the year 139 377 135 651
Other comprehensive (loss) income for the year net of tax*
Currency movement on translation of foreign subsidiary (5 064) 656
Total comprehensive income for the year 134 313 136 307
Attributable to:
Owners of the parent 132 206 130 551
Non-controlling interests 2 107 5 756
*All items will subsequently be reclassified to profit and loss.
Reconciliation of headline earnings
Audited Audited
12 months ended 12 months ended
R'000 30 June 2017 30 June 2016
Profit attributable to owners of the parent 135 019 130 129
Profit on disposal of plant and equipment (132) (294)
Tax effect of above items 314 179
Headline earnings 135 201 130 014
Headline earning per ordinary share (cents) 31,8 30,5
Summarised segmental information
Revenue EBITDA
Audited Audited Audited Audited
12 months 12 months 12 months 12 months
ended ended ended ended
R'000 30 June 2017 30 June 2016 30 June 2017 30 June 2016
Records Management 629 701 612 318 165 304 159 346
Property Companies (Occupied by
Records Management businesses) 66 964 59 901 66 964 59 901
CSX Customer Services 69 337 95 998 (2 362) (1 060)
Other 85 983 79 903 17 423 16 837
Intergroup (82 746) (70 543) - -
Total 769 239 777 577 247 329 235 024
South African operations 682 726 697 939 235 635 219 014
Non-South African operations 86 513 79 638 11 694 16 010
Operating profit Tangible Assets
Audited Audited Audited Audited
12 months 12 months 12 months 12 months
ended ended ended ended
R'000 30 June 2017 30 June 2016 30 June 2017 30 June 2016
Records Management 138 589 131 438 337 861 339 755
Property Companies (Occupied by
Records Management businesses) 66 964 59 901 318 151 294 785
CSX Customer Services (3 439) (1 647) 32 428 23 590
Other 10 298 9 595 62 046 67 088
Total 212 412 199 287 750 486 725 218
South African operations 205 407 189 052 674 039 658 773
Non-South African operations 7 005 10 235 76 447 66 445
"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
Audited Audited
as at as at
R'000 Notes 30 June 2017 30 June 2016
ASSETS
Non-current assets 769 061 722 858
Property 1 331 556 292 835
Plant and equipment 206 547 204 317
Goodwill 216 938 218 573
Intangible assets - 1 868
Investment 7 739 449
Long-term receivable 375 559
Deferred tax assets 5 906 4 257
Current assets 212 009 227 506
Inventories 19 068 19 443
Trade receivables 134 582 136 293
Other receivables 30 493 46 053
Bank balances 27 866 25 717
Total assets 981 070 950 364
EQUITY AND LIABILITIES
Equity and reserves 647 643 660 340
Equity attributable to owners
of the parent 624 007 643 397
Non-controlling interests 23 636 16 943
Non-current liabilities 181 978 144 943
Interest-bearing liabilities 2 156 904 123 297
Deferred taxation liability 25 074 21 646
Current liabilities 151 449 145 081
Trade and other payables 73 761 69 658
Deferred revenue 12 968 13 427
Bank overdraft 3 273 345
Provisions 2 351 2 678
Taxation 2 814 9 768
Interest-bearing liabilities 2 56 282 49 205
Total equity and liabilities 981 070 950 364
Notes:
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. The Metrofile (Pty) Ltd borrowings are JIBAR linked.
Summarised consolidated statement of cash flows
Restated
Audited Audited
12 months 12 months
ended ended
R'000 30 June 2017 30 June 2016
Cash generated from operations
before net working capital changes 251 620 238 743
Decrease/(increase) in net working capital 24 568 ( 39 769)
Cash generated from operations 276 188 198 974
Net finance costs paid (18 056) (14 687)
Normal taxation paid (60 191) (39 724)
Net cash inflow from operating activities 197 941 144 563
Net cash outflow from investing activities:
Investment in property: expansion (37 669) (21 786)
Investment in plant and equipment: expansion (36 398) (44 577)
Minority contribution on acquisition of subsidiary - (1 700)*
Investment in plant and equipment: replacement (5 832) (7 192)
Proceeds on disposal of property,
plant and equipment 1 326 1 506
Translation of foreign fixed assets 1 827 160*
Additions to intangible assets - (1 967)
Investment in associate and joint venture (7 259) (449)*
Increase in shareholding of subsidiary and
acquisition of business - (25 256)
Net cash outflow from financing activities:
Issue of shares 39 234 -
Purchase of treasury shares (58 732) (9 577)*
Dividends paid (135 900) (97 835)*
Loans repaid (34 317) (30 986)
Loans drawn down 75 000 -
Net decrease in cash and cash equivalents (779) (95 096)
Cash and cash equivalents
at the beginning of the year 25 372 120 468
Cash and cash equivalents
at the end of the year 24 593 25 372
* These amounts have been re-classified as identified in the JSE Pro Active monitoring of annual
financial statement review.
Summarised consolidated statement of changes in equity
Total equity
Share Share Accumulated Other before minority Non-
capital premium profits/(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 4 440 4 440 4 440
Share scheme settlement (1 494) (1 494) (1 494)
Minority contribution on acquisition of
subsidiary (1 700) (1 700)
Dividends declared (98 043) (98 043) (98 043)
Total comprehensive income for the year
ended 30 June 2016 130 129 422 130 551 5 756 136 307
Balance at 30 June 2016 2 625 579 359 50 046 11 367 643 397 16 943 660 340
Purchase of Treasury Shares (58 732) (58 732) (58 732)
Issue of Ordinary Shares 50 39 184 39 234 39 234
IFRS 2 Equity reserve relating to share
schemes 6 198 6 198 6 198
Share scheme settlement (2 797) (2 797) (2 797)
Minority contribution on acquisition of
subsidiary 2 886 2 886
Reversal of prior year non-controlling interest
and loss of joint venture 731 731 1 700 2 431
Dividends declared (136 230) (136 230) (136 230)
Total comprehensive income for the year
ended 30 June 2017 135 019 (2 813) 132 206 2 107 134 313
Balance at 30 June 2017 2 675 559 811 49 566 11 955 624 007 23 636 647 643
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 36,77% of Metrofile's equity.
Overview of full year financial 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 decreased by 1% to R769,2 million, whilst headline earnings
increased by 4,0% to R135,2 million. Basic earnings per share ("EPS")
and headline earnings per share ("HEPS") both increased to 31,8 cents
representing an increase of 3,9% and 4,3% respectively. EBITDA
increased by 5.2% to R247,3 million.
Cash generated from operations before net working capital changes
increased by 5,4% to R251.6 million. while cash generated from
operations increased by 38,8% to R276.2 million.
R79,9 million in capital expenditure was incurred of which R37,7 million
was allocated primarily to expanding facilities.
The Group's net interest-bearing debt amounted to R213,2 million at
the period end, which equates to an annualised Debt: EBITDA ratio of
approximately 0,9 times.
Business growth during the reporting period has been adversely
impacted by weak economic conditions in South Africa and the
continued delay in governmental and institutional spending decisions.
The Group continued its refocusing process initiated during the first half
of the year and expects to feel the positive effects of this process in
future financial periods.
Robust growth outside of South Africa
Despite increased socio-economic and political disruption in the GCC
States of the Middle East, 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.
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;
- Bringing in new or outsource partners in complementary niches; and
- Continuing its focus on acquiring relevant, complimentary businesses
in the technology and RIM sectors.
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 and are consistent with those applied in the consolidated
financial statements for the year ended 30 June 2016.
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 consolidated financial statements for
30 June 2017 year-end, in accordance with International Standards on
Auditing. These consolidated summarised financial statements have been derived
from the consolidated financial statements and are consistent in all
material respects, with the consolidated financial statements. A copy of
the audit report on the consolidated summarised financial statements, the audited
consolidated financial statements and the audit report thereon 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 consolidated 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, fees of R1,55 million (2016: R1,44 million) were paid
to MIC during the year under review.
Directorate and corporate governance
The Board currently comprises of two executive and eight non-executive
directors, of whom five are independent directors.
Mr IN Matthews remains the lead independent director.
Ms S Zilwa, a member of the Audit, Governance and Risk Committee,
was appointed as the Chairman of the Committee with effect from
1 July 2017, in place of Mr IN Matthews, who remains on the Committee
as a Committee member.
Ms L Mthimunye-Bakoro was appointed as an Independent Non-
Executive Director and a member of its Audit, Governance and Risk
Committee and Social, Ethics and Transformation Committee with effect
from 1 July 2017.
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 dividend for the full year of 30,0 cents per share represents dividend
cover of 1,06 times.
Notice is hereby given that a final gross cash dividend of 17,0 cents per
share in respect of the year ended 30 June 2017 has been declared
payable, from income reserves, to the holders of ordinary shares
recorded in the books of the Company on Friday, 6 October 2017.
The last day to trade cum-dividend will therefore be Tuesday, 3 October
2017 and Metrofile shares will trade ex-dividend from Wednesday,
4 October 2017. Payment of the dividend will be on Monday,
9 October 2017. Share certificates may not be dematerialised or rematerialised
from Wednesday, 4 October 2017 (which is ex-date) to Friday,
6 October 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 13,6 cents
per share. The Company's issued share capital at the period end is
435 140 268 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 R86,7 million for the next five years. Capital
investment plans for the full financial year amount to R108,6 million.
Events after the reporting date
- Acquisition of Tidy Files (SA) Proprietary Limited
In July 2017, the Group obtained Competition Commission approval
for the previously announced acquisition of a 100% interest in Tidy
Files (SA) Proprietary Limited, a company registered and operating in
South Africa for a consideration of R77,9 million from cash resources.
Tidy Files is a leading provider of end-to-end document management
and storage solutions in Southern Africa, renowned for the design,
supply and implementation of Paper-based and Electronic Document
and Records Management Solutions.
- Disposal of Rainbow Paper Management Proprietary Limited
Subsequent to the period end, in terms of the Group's strategy
to focus its attention on its core businesses and rationalise and
consolidate its operations, the Group disposed of its 100% interest
in Rainbow Paper Management Proprietary Limited, for a cash
consideration of approximately R20 million.
Alleged irregularities at a subsidiary company.
- Some alleged irregularities have been discovered in Cleardata which
is currently subject to a forensic audit. No negative future income
statement effects are expected.
There have been no other material events after the reporting date.
Share Issues and Buy-backs
During the year, 8 056 258 ordinary shares were issued to MIC at
a consideration of R4,87 per share, in terms of the Subscription
Agreement approved by Shareholders on 14 December 2016.
Under the share repurchase program sanctioned by the Board, a total
of 12 169 930 shares were acquired at a price range of R4,25 to R5,01
(average price R4,84).
There are accordingly 421 103 232 shares in issue, net of treasury
shares, at 30 June 2017.
Outlook and opportunities
Data and information management is growing in importance as
the world becomes increasingly digitally connected. 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. Metrofile remains well placed in
the forefront of an industry that is evolving rather than shrinking.
Christopher Seabrooke Pfungwa Serima
Non-executive Chairman Group Chief Executive Officer
Senderwood
Gauteng
8 September 2017
Corporate information
METROFILE HOLDINGS LIMITED Directors
Incorporated in the Republic of South Africa CS Seabrooke#* (Chairman)
(Registration number 1983/012697/06) MS Bomela* (Deputy Chairman)
Share code: MFL PG Serima (CEO)
ISIN: ZAE000061727 MC McGowan (CFO)
("Metrofile" or "the Company" or "the Group") P Langeni#*
CN Pongweni*
Registered office IN Matthews+*
41 Wordsworth Avenue GD Wackrill*
Senderwood SV Zilwa#*
Bedfordview LE Mthimunye - Bakoro#*
2007 + Lead independent
www.metrofileholdings.com # Independent
* Non-executive
Sponsor
The Standard Bank of South Africa Limited
Transfer secretaries
Computershare Investor Services (Pty) Ltd Company Secretary
Rosebank Towers, 15 Biermann Avenue P Atkins
Rosebank, 2196
Date: 08/09/2017 04:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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