METROFILE HOLDINGS LIMITED - Audited Summarised Group Results For The 12 Months Ended 30 June 2018

Release Date: 10/09/2018 16:55
Code(s): MFL
 
Wrap Text
Audited Summarised Group Results For The 12 Months Ended 30 June 2018

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 2018

REVENUE

Up R953.0m

EBIDTA

Up R270.2m

EPS

Down 31.0c

HEPS

Down 29.2c

NHEPS

Up 32.1c

DPS
FOR THE YEAR

Down 21.0c

THE GROUP IN CONTEXT
- 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 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 36.95%
  of Metrofile's equity.

STRATEGIC SYNOPSIS - EMBRACING THE FUTURE
The world is moving into an ever-digitised phase, presenting unique opportunities for the
Group. Our move into the digital realm, allows Metrofile to offer record and information
management solutions that bridge the divide between legacy storage and new data
management systems. Our records and information prowess spans more than 35 years
and as the world evolves, we are evolving with it, to bring relevant business solutions to our
diverse range of clients

We are well-positioned to bridge the gap between
legacy storage and new data platforms through
leveraging technology within our solutions and taking
it to a wider, agile marketplace.

RESTRUCTURING OUR OPERATING MODEL
We are shifting from a regional management structure towards
an integrated management framework through industry
categorisation and specialisation in both the private and public
sectors. This involves streamlining and increasing the efficiencies
of our operations.

ENHANCING OUR CLIENT RELATIONSHIPS
We are intensifying our client relationships through stepped up
visits and satisfaction surveys to gain insights into improving our
interactions with them.

STRATEGIC ACQUISITION AND EXPANSION
We continue to embark on strategic acquisitions and partnerships
with companies that are positioned to increase our innovation
pipeline and increase our geographical reach.

NIMBLE AND TAILOR-MADE SOLUTIONS
We are segmenting our targeted markets and developing detailed
go-to-market strategies for each. We are also reviewing our
solutions in terms of applicability to our new digital future and value
to clients.

EVOLUTION INTO THE DIGITAL SPACE
We are launching a new incubator developed for Metrofile's
products and services as part of our digital transformation.

OUR PERFORMANCE
- Revenue increased by 23.9% to R953.0 million (2017: R769.2 million)
- EBITDA increased by 9.3% to R270.2 million (2017: R247.3 million)
- EBIT increased by 4.4% to R221.8 million (2017: R212.4 million)
- R80,3 million in capital expenditure was incurred of which R64,5 million
  was expansionary capex.
- Metrofile recorded revenue growth of 28.0% from our operations
  outside of South Africa, which contributed 11.6% of the total revenue
  for the year.
- Acquired 100% interest in Tidy Files (SA) Proprietary Limited.
- Acquired 100% interest in G4S Secure Data (Kenya) Limited.
- Acquired the remaining 30% non-controlling interest in
  Cleardata Proprietary Limited.
- Disposed of Rainbow Management Proprietary Limited.
- Invested a 62.5% majority interest in Dexterity Digital Solutions, a
  start-up focusing on digital product development in the information and
  records management area.

Our acquisitions, disposals and investments form part of our growth
strategy and ensure we are constantly evolving, nimble and adaptive to change
and opportunity.

DIVIDENDS
The Group's net interest-bearing debt amounted to R614.8 million which equates to a Debt: EBITDA ratio of
2.28 times. While the Group was under borrowed, dividends were paid representing a cover ratio of 1,1:1 The
Group is now at the maximum debt capacity ratio acceptable to the Board. As a result, the Board has resolved
to increase the dividend cover for the 2018 financial year to the upper level of the previously announced target
range of 1,25 to 1,5 times. The Board has also resolved that an appropriate normalised cover ratio for future
years will be 2,0 times thereby facilitating capacity to fund new bolt-on acquisitions partially from future
retained earnings.

The dividend for the full year of 21.0 cents per share represents dividend cover of 1,52 times relative to
normalised HEPS (NHEPS).

Notice is given that a final gross cash dividend of 8.0 cents per share in respect of the year ended 30 June 2018
has been declared payable, from income reserves, to the holders of ordinary shares recorded in the books of
the Company on Friday, 5 October 2018. The last day to trade cum-dividend will therefore be Tuesday, 2 October
2018 and Metrofile shares will trade ex-dividend from Wednesday, 3 October 2018. Payment of the dividend
will be on Monday, 8 October 2018. Share certificates may not be dematerialised or re-materialised from
Wednesday, 3 October 2018 (which is ex-date) to Friday, 5 October 2018, 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 6.4 cents per share. The Company's issued share capital at the
period end is 416 164 210 shares and the Company's tax number is 9375/066/71/0.

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 2018.
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 2018 year-end, in accordance with International Standards on Auditing.
These summarised consolidated 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 unmodified audit report on the summarised consolidated financial statements, the audited consolidated
financial statements and the unmodified audit report thereon are available for inspection at the Company's
registered off ice. The auditor's report does not necessarily report on all 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.

CHANGES TO THE BOARD OF DIRECTORS
Ms Phumzile Langeni was appointed as Lead Independent Director with effect from 10 July 2018. As previously
announced, Mr Zaheer Abdulla, has been appointed as a Non-Executive Director of Metrofile Holdings with
effect from 15 September 2018 in place of Mrs Cynthia Pongweni who will resign from the Board, effective
15 September 2018.

SUMMARISED CONSOLIDATED INCOME STATEMENT
                                                                                            Audited       Audited
                                                                                          12 months     12 months
                                                                                              ended         ended
R'000                                                                                    30 June 18    30 June 17
Revenue                                                                                     952 988       769 239
Earnings before interest, taxation, depreciation and
amortisation (EBITDA)                                                                       270 175       247 329
Depreciation                                                                               (40 450)      (34 917)
Operating profit                                                                            229 725       212 412
Acquisition-related expenses                                                               (15 495)             -
Profit on disposal of business                                                                7 592             -
Earnings before net finance costs                                                           221 822       212 412
Net finance costs                                                                          (46 241)      (18 056)
Finance income                                                                                1 502         3 649
Finance costs                                                                              (47 743)      (21 705)

Profit before tax                                                                           175 581       194 356
Taxation                                                                                   (50 288)      (54 979)
Profit for the year                                                                         125 293       139 377
Attributable to:
Owners of the parent                                                                        129 052       135 019
Non-controlling interests                                                                   (3 759)         4 358
Profit for the year                                                                         125 293       139 377
Further information
Number of ordinary shares in issue (thousands)                                              416 164       421 103
Weighted average number of ordinary shares in issue (thousands)                             417 233       424 554
Basic earnings per ordinary share
Basic earnings per ordinary share (cents)                                                     31.0           31.8
Diluted earnings per ordinary share
Diluted earnings per ordinary share (cents)                                                   29.2           31.8
Headline earnings per ordinary share
Headline earnings per ordinary share (cents)                                                  29.2           31.8
Dividend per ordinary share
Interim dividend per ordinary share - paid (cents)                                            13.0           13.0
Final dividend per ordinary share - proposed/paid (cents)                                      8.0           17.0

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 18          30 June 17         30 June 18     30 June 17

Records Management                                  671 673             629 701            162 191        165 304
Property Companies (Occupied by
Records Management businesses)                       73 853              66 964             73 853         66 964
CSX Customer Services                                79 457              69 337            (1 514)        (2 362)
Tidy Files                                          158 928                   -             19 656              -
Other                                                55 014              85 983             15 989         17 423
Intergroup                                         (85 937)            (82 746)                 -               -
Total                                               952 988             769 239            270 175        247 329

South African operations                            842 238             682 726            254 931        235 635
Non-South African operations                        110 750              86 513             15 244         11 694

                                                    Operating profit                       Tangible assets
                                                   Audited              Audited            Audited        Audited
                                                 12 months            12 months          12 months      12 months
                                                     ended               ended               ended          ended
                                                     ended               ended               ended          ended
R'000                                           30 June 18          30 June 17          30 June 18     30 June 17

Records Management                                 134 194             138 589             411 637        337 861
Property Companies (Occupied by
Records Management businesses)                      73 853              66 964             343 971        318 151
CSX Customer Services                              (2 794)             (3 439)              37 453         32 428
Tidy Files                                          14 236                   -              41 984              -
Other                                               10 236              10 298              58 131         62 046
Total                                              229 725             212 412             893 176        750 486

South African operations                           220 464             205 407             772 960        674 039
Non-South African operations                         9 261               7 005             120 216         76 447
"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 CHANGES IN EQUITY

                                                                                                                                    Total equity
                                                                             Share       Share       Accumulated        Other    before minority
                                                                           capital     premium  profits/(losses)     reserves      apportionment    Non-controlling       Total

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)
Reversal of prior year non-controlling interest and loss of joint venture                                    731                             731              1 700        2 431
Minority contribution on acquisition of subsidiary                                                       (1 016)                         (1 016)            (7 724)      (8 740)
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
Purchase of Treasury Shares                                                           (19 937)                                          (19 937)                        (19 937)
IFRS 2 equity reserve relating to share schemes                                                                         5 076              5 076                           5 076
Share scheme settlement                                                                                               (6 498)            (6 498)                         (6 498)
Purchase of remaining non-controlling interest of subsidiary                                                                                                  2 886        2 886
Dividends declared                                                                                     (125 979)                       (125 979)                       (125 979)
Total comprehensive income for the year ended 30 June 2018                                               129 052        5 417            134 469            (2 742)      131 727
Balance at 30 June 2018                                                      2 675     539 874            51 623       15 950            610 122             13 170      623 292

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                                           Audited                Audited
                                                                                         12 months              12 months
                                                                                             ended                  ended
R'000                                                                                   30 June 18             30 June 17

Profit for the period                                                                      125 293                139 377
Other comprehensive income for the period net of tax*                                        6 434                (5 064)
Currency movement on translation of foreign subsidiary                                       6 434                (5 064)

Total comprehensive income for the period                                                  131 727                134 313
Attributable to:
Owners of the parent                                                                       134 469                132 206
Non-controlling interests                                                                  (2 742)                  2 107
* All items will subsequently be reclassified to profit and loss.

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                           Audited                Audited
                                                                                             as at                  as at
R'000                                                                   Note            30 June 18             30 June 17

ASSETS
Non-current assets                                                                       1 138 666                769 061
Property                                                                    1              359 213                331 556
Plant and equipment                                                                        230 605                206 547
Goodwill                                                                                   527 621                216 938
Investment                                                                                   9 353                  7 739
Long-term receivable                                                                         2 419                    375
Deferred tax asset                                                                           9 455                  5 906
Current assets                                                                             300 939                212 009
Inventories                                                                                 34 747                 19 068
Trade receivables                                                                          184 726                134 582
Other receivables                                                                           29 135                 30 493
Bank balances                                                                               52 331                 27 866

Total assets                                                                            1 439 605                 981 070

EQUITY AND LIABILITIES
Equity and reserves                                                                        623 292                647 643
Equity attributable to owners of the parent                                                610 122                624 007
Non-controlling interests                                                                   13 170                 23 636

Non-current liabilities                                                                    622 985                181 978
Interest-bearing liabilities                                                               597 118                156 904
Deferred taxation liability                                                                 25 867                 25 074
Current liabilities                                                                        193 328                151 449
Trade and other payables                                                                   101 765                 73 761
Deferred revenue                                                                            13 661                 12 968
Bank overdraft                                                                               3 288                  3 273
Provisions                                                                                   4 093                  2 351
Taxation                                                                                     3 787                  2 814
Interest-bearing liabilities                                                                66 734                 56 282

Total equity and liabilities                                                             1 439 605                981 070
Note:
1. The majority of the group's properties have been pledged as security against the group's debt facilities.

Christopher Seabrooke                                          Pfungwa Serima
Non-executive Chairman                                         Group Chief Executive Officer

Senderwood
10 September 2018

SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                           Audited                Audited
                                                                                         12 months              12 months
                                                                                             ended                  ended
R'000                                                                                   30 June 18             30 June 17

Cash generated from operations
before net working capital changes                                                         255 577                251 620
(Increase)/decrease in net working capital                                                (24 594)                 24 568

Cash generated from operations                                                             230 983                276 188
Net finance costs paid                                                                    (46 241)               (18 056)
Normal taxation paid                                                                      (51 361)               (60 191)
Net cash inflow from operating activities                                                  133 381                197 941
Net cash outflow from investing activities:
Investment in property: expansion                                                         (26 167)               (37 669)
Investment in plant and equipment: expansion                                              (38 356)               (36 398)
Investment in plant and equipment: replacement                                            (15 818)                (5 832)
Proceeds on disposal of property, plant and equipment                                       13 623                  1 326
Effects of foreign currency differences on fixed assets                                    (2 598)                  1 827
Acquisition of investment in unlisted associate and joint venture                                -                (7 259)
Increase in loans to associate company                                                     (1 500)                      -
Acquisition of subsidiaries                                                              (335 516)                      -
Proceeds on disposal of subsidiary                                                          12 235                      -
Net cash inflow/(outflow) from financing activities:
Issue of shares in terms of vendor placements                                                    -                 39 234
Purchase of Treasury Shares                                                               (19 937)               (58 732)
Dividends declared                                                                       (125 682)              (135 900)
Loans repaid                                                                              (14 147)               (34 317)
Loans drawn down                                                                           444 932                 75 000
Net increase (decrease) in cash and cash equivalents                                        24 450                  (779)
Cash and cash equivalents at the beginning of the year                                      24 593                 25 372
Cash and cash equivalents at the end of the year                                            49 043                 24 593

Represented by:
Bank balances                                                                               52 331                 27 866
Bank overdrafts                                                                            (3 288)                (3 273)

RECONCILIATION OF HEADLINE EARNINGS
                                                                                           Audited                Audited
                                                                                         12 months              12 months
                                                                                             ended                  ended
R'000                                                                                   30 June 18             30 June 17

Profit attributable to owners of the parent                                                129 052                135 019
Profit on disposal of subsidiary                                                           (7 592)                      -
Loss/(profit) on disposal of plant and equipment                                                48                  (132)
Tax effect of above items                                                                      194                    314
Headline earnings                                                                          121 702                135 201
Headline earning per ordinary share (cents)                                                   29.2                   31.8

RECONCILIATION OF NORMALISED EARNINGS
                                                                                           Audited                Audited
                                                                                         12 months              12 months
                                                                                             ended                  ended
R'000                                                                                   30 June 18             30 June 17

Headline earnings for purposes of headlines earnings per share                             121 702                135 201
Adjusted for after tax:
Acquisition-related costs                                                                   12 024                      -
Normalised headline earnings for purposes of normalised
  headline earnings per share                                                              133 726                135 201
Normalised headline earnings per share ("NHEPS") (cents)                                      32.1                   31.8

Sponsor: The Standard Bank of South Africa Limited

Transfer secretaries: Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196

Directors: CS Seabrooke^* (Chairman), MS Bomela* (Deputy Chairman), 
PG Serima (CEO), MC McGowan (CFO), P Langeni†*, CN Pongweni*,
L Mthimunye-Bakoro*, GD Wackrill*, SV Zilwa^*
Lead independent^Independent*Non-executive
†

Company Secretary: P Atkins

CORPORATE INFORMATION

Registered office: 41 Wordsworth Avenue Senderwood Bedfordview 2007
www.metrofileholdings.com



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