Wrap Text
Unaudited condensed consolidated interim results for the six months ended 30 November 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")
Unaudited condensed consolidated interim results
for the six months ended 30 November 2017
HIGHLIGHTS
B-BBEE accreditation improved to Level 2
Revenue up 14%
Trading profit up 11%
EPS up 143% (continuing operations up 78%)
HEPS and diluted HEPS up 21% (continuing operations up 41%)
NTAV up 20%
Core HEPS and diluted core HEPS up 11% (continuing operations up 27%)
DriveRisk disposal and sale and leasback of Umlaas Road successfully completed
COMMENTARY
The group has seamlessly maintained its trading growth trajectory despite a protracted tough
economic environment, with positive results for the six months to November 2017 ("the period").
Earnings growth for the year was entirely organic in nature, affirming the strength of the
group's business growth strategy and the resilient business models of the group businesses,
guided by strong management teams.
For the past ten-year period OneLogix has realised compound annual growth in revenue of 17%, in
trading profit and in core and diluted core headline earnings per share of 12% apiece, and in net
asset value of 20% to 353,4 cents per share.
Operationally, during the period, the group finalised the successful sale and leaseback of the
Umlaas Road properties in KwaZulu-Natal ("Umlaas Road transaction") and the sale of its 49%
minority shareholding in DriveRisk Proprietary Limited ("DriveRisk disposal"), which will further
enable OneLogix to trigger growth opportunities.
The group also boosted its B-BBEE accreditation, now at Level 2, which will enhance growth
prospects. The greater than 50% black owned, and greater than 30% black women-owned components are
a strategic advantage.
Review of operations
Abnormal logistics
Overall this segment performed well on the back of a moderate upturn in the local and cross-border
vehicle markets.
OneLogix Vehicle Delivery Services ("VDS") and OneLogix Commercial Vehicle Delivery Services
("CVDS") benefited from a marginally improved market especially in the last quarter, despite an
earlier unfortunate industry wide strike.
OneLogix Projex experienced relatively tougher trading conditions with resultant margin pressure.
Fortunately the business successfully counteracted this with strong financial controls and
initial success in the pursuit of new markets and customers.
Primary product logistics
Listless markets and attendant margin pressure were more pervasive within this segment,
particularly affecting OneLogix United Bulk and OneLogix Linehaul. However, movers of top-end
niche agricultural products, OneLogix Jackson and OneLogix Buffelshoek, performed well as their
specific market benefited from the recovery from the prolonged drought.
Other - logistics services
This smaller non-reportable segment delivered a strong performance. Atlas 360 has consolidated
its prior year turnaround and OneLogix Cargo Solutions produced a pleasing performance in the
warehousing and project-based clearing and forwarding markets.
Discontinued operations
In accordance with IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations) the
effects of the DriveRisk disposal on the group's results have been presented as a discontinued
operation.
Financial results
Revenue increased by 14% to R1,15 billion mainly due to the improved performance from the
Abnormal Logistics businesses.
Trading profit was up 11% to R101,5 million. Trading margins declined slightly to 8,9% from
9,1%, largely attributable to increased staff costs at corporate Head Office to facilitate the
next phase of growth in the group.
Consistent with the prior period, trading profit was further impacted by a R8 million
(November 2016: R8,1 million) charge relating to the group's 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 21,6% on profit for the period.
Operating profit increased 36% from R82,7 million to R112,3 million. It was boosted by a
R16,8 million profit realised on the Umlaas Road transaction and by a reduced non-cash flow
IFRS 2 share-based payment charge of R5,3 million (2016: R7,6 million) relating to employee
participation schemes.
Net finance costs decreased by 14% to R25 million as debt related to the Umlaas Road properties
was settled, and due to the enhanced cash flow position post the DriveRisk disposal and the
Umlaas Road transaction.
Earnings per share ("EPS") increased 143% to 39,2 cents per share due to the once-off post tax
profits from the DriveRisk disposal and the Umlaas Road transaction of R36,5 million and
R12,7 million, respectively.
Headline earnings and diluted headline earnings per share ("HEPS") of 20 cents were 21% higher
on the back of an enhanced overall trading result, reduced net finance costs and the reduced
IFRS 2 charge. HEPS from continuing operations increased 41% as DriveRisk's contribution of
2,3 cents per share in the prior year has been disclosed as a discontinued operation.
Core HEPS and diluted core HEPS ("Core HEPS") increased by 11% to 23,3 cents per share. Core
HEPS and diluted core HEPS from continuing operations increased by 27%. There was no dilutionary
effect on core HEPS in the period as the volume weighted average share price for the period is
below the consideration due from the employee participation schemes (to which potential dilution
in issued ordinary shares relates). A reconciliation of headline earnings to core headline
earnings is provided in the financial results.
Cash generated from operations before working capital changes, net finance costs, taxation and
dividends remains strong and increased by 8% to R167,9 million, mainly in line with trading
profit growth. Increased investment in net working capital of R28,6 million was in line with
increased trading activity in the months leading up to November 2017.
The group invested R76,4 million in operational infrastructure as follows: R60,5 million in
fleet (of which R43,3 million relates to expansion), R10,2 million in property, R3,2 million in
IT-related assets and R2,5 million for other assets.
Net proceeds of R106,3 million, R69,7 million and R10,2 million were received on the Umlaas
Road transaction, DriveRisk disposal and sale of fleet, respectively. R133,7 million of proceeds
from the Umlaas Road transaction were paid directly to the finance provider by the purchaser.
New interest-bearing borrowings of R62,1 million were raised to fund fleet financing, offset by
the repayment of interest-bearing borrowings of R111,6 million.
Dividends paid in the period amounted to R21,0 million and a further R7,7 million was outlaid on
acquiring stakes in various subsidiaries from non-controlling parties. In addition, R14,7 million
was expended on the general share repurchase of OneLogix shares (see "Corporate transactions").
Net cash resources at the reporting date amounted to R213,7 million.
Net debt of R220,4 million at 30 November 2017 is significantly less than at 31 May 2017
(R365,9 million) mainly due to cash receipts from the DriveRisk disposal and Umlaas Road
transaction.
The group's financial position at period-end, funding structure for assets utilised by the
operations and the resources available to the group have successfully reinforced a solid platform
for the next phase of growth.
Corporate transactions
As announced on 1 September 2017, the group disposed of its 49% minority stake in DriveRisk by
way of a repurchase and a subscription and loan agreement for an amount of R65,4 million, which
was settled in cash via a share repurchase and final cash dividend on the effective date of
29 August 2017. The DriveRisk disposal was necessary given the increasing complexity as a result
of the group being a natural competitor to the expanding DriveRisk customer base.
As announced on 10 October 2017, the group concluded the Umlaas Road transaction for a cash
consideration of R240 million, utilised to extinguish property-related debt, which in turn
strengthened the group's financial position and ability to harness future growth opportunities.
Effective 1 June 2017, OneLogix acquired a further 5,16% stake in OneLogix Projex for
R4,7 million and an additional 8% of OneLogix Buffelshoek for R2,8 million effective
1 October 2017, setting its shareholding at 92,06% and 82%, respectively.
As at end-November 2017, the group had repurchased 4,8 million OneLogix Group Limited shares on
the open market for a cash consideration of R14,7 million.
Post interim period events
OneLogix has purchased an adjoining property to its OneLogix VDS Pomona facility for
R16,5 million in order to increase vehicle storage capacity and facilitate further value-add
customer service offerings. The transfer of the property is expected to be completed during
February 2018 with a further R10 million expenditure allocated to develop the facility to the
required operational standards.
New board member
We officially extend a warm welcome to Lebogang Mosiane as an alternate director to
Kgotso Schoeman. This appointment was effective 23 November 2017 and is subject to approval by
shareholders at the Annual General Meeting expected to be held on 22 November 2018.
Dividend
Shareholders are advised that an interim gross dividend, No 8 of 6 cents per share in respect of
the six months ended 30 November 2017, was declared on Thursday, 8 February 2018. 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 4,8 cents per share, while it is 6 cents per share for those shareholders who
are exempt from dividends tax. The income tax reference number of the company is 9361229710.
At the declaration date, the issued share capital, excluding treasury shares held in relation to
the Employee and Management Share participation schemes, was 246 740 749 ordinary shares of no
par value.
The salient dates in respect of the interim dividend are as follows:
2018
Last day to trade cum dividend Tuesday, 3 April
Shares will trade ex dividend Wednesday, 4 April
Record date Friday, 6 April
Payment of dividend Monday, 9 April
Shareholders may not dematerialise or rematerialise their shares between Wednesday, 4 April 2018
and Friday, 6 April 2018, both dates inclusive.
The dividend will be transferred to dematerialised shareholders' CSDP accounts/broker accounts on
Monday, 9 April 2018. Certificated shareholders' dividend payments will be paid to certificated
shareholders' bank accounts on or about Monday, 9 April 2018.
The interim dividend, amounting to R14,8 million, has not been recognised as a liability in the
consolidated interim financial statements. It will be recognised in shareholders' equity for the
year ending 31 May 2018.
OneLogix will continue to assess the payment of interim and final dividends in light of the board's
ongoing review of earnings, after providing for long-term growth and cash/debt resources, the
amount of reserves available and the covenants of facility providers.
Prospects
Trading conditions for all group companies are expected to remain consistently challenging for the
foreseeable future, notwithstanding minor upticks experienced in certain markets in the year.
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.
The executive management team maintains full confidence in our experienced, stable management teams
with their proven entrepreneurial skills and fully expects them to continue guiding our businesses
to ongoing growth. Our tested business models have ensured that each group business is well-placed
within its respective market and is well-equipped to both withstand economic headwinds and to
exploit emerging opportunities.
As always OneLogix remains mindful of start-up and acquisitive opportunities and will continue to
assess these appropriately. Our strengthened financial position and improved B-BBEE accreditation
provide an ideal springboard for this pursuit of growth.
People
The group continues to prioritise building high-quality and high-performance teams within an
enabling culture. The re-award to OneLogix of the international honour of "Top Employer" for 2018
by the Top Employer Institute is testament to 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 further thank all our business partners, customers, suppliers, business advisors and
shareholders for their continued invaluable support.
Basis of presentation
The unaudited condensed consolidated interim results for the six months ended 30 November 2017
have been prepared in accordance with, and contain the information as set out in International
Accounting Standards ("IAS") 34, as well as the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial
Reporting Standards Council, the JSE Listings Requirements and the requirements of the Companies
Act, No 71 of 2008. The unaudited condensed consolidated interim financial information should be
read in conjunction with the most recent audited annual financial statements for the year ended
31 May 2017. Accounting policies and computations are consistently applied as in the annual
financial statements.
As previously communicated we aim to present stakeholders with the same information that
management utilises to evaluate the performance of the group's operations. Accordingly, we
present core headline earnings per share ("core HEPS"), which is headline earnings (as calculated
based on SAICA Circular 2/2015) adjusted for the amortisation charge of intangible assets
recognised on business combinations and charges relating to share-based payments.
The interim financial statements were approved by the board of directors on 8 February 2018.
These results have been compiled under the supervision of the Financial Director, GM Glass CA(SA).
The interim results have not been reviewed or reported on by the group auditors, Mazars Gauteng.
The unaudited condensed consolidated interim financial statements are available on the company's
website www.onelogix.com.
By order of the board
8 February 2018
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2017 2016 2017
% R'000 R'000 R'000
Revenue 14 1 147 052 1 006 029 1 995 888
Operating and administration costs 15 (984 437) (858 843) (1 712 294)
Depreciation and amortisation 5 (66 366) (63 288) (132 875)
(Profit)/loss on disposal of property, plant
and equipment 16 040 (1 233) (2 573)
Operating profit 36 112 289 82 665 148 146
Net finance costs (14) (25 012) (29 127) (57 625)
Profit before taxation 63 87 277 53 538 90 521
Taxation (18 797) (12 320) (20 958)
Profit from continuing operations 66 68 480 41 218 69 563
Profit from discontinued operation - 5 712 14 213
Profit on disposal of discontinued operation 36 526 - -
Profit for the period 105 006 46 930 83 776
Other comprehensive income
Movement in foreign currency translation reserve* 9 420 700
Revaluation of land and buildings - - 13 968
Total comprehensive income for the period 122 105 015 47 350 98 444
Profit attributable to:
- Non-controlling interest 6 6 658 6 282 10 808
- Owners of the parent 142 98 348 40 648 72 968
124 105 006 46 930 83 776
Total comprehensive income attributable to:
- Non-controlling interest 6 6 658 6 282 10 808
- Owners of the parent 139 98 357 41 068 87 636
122 105 015 47 350 98 444
Basic and diluted basic earnings per share (cents) 143 39,2 16,1 29,0
Continuing operations 78 24,6 13,8 23,4
Discontinued operations 14,6 2,3 5,6
* The component of other comprehensive income may subsequently be reclassified to profit and loss
during future reporting years.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2017 2016 2017
% R'000 R'000 R'000
Notes to statement of comprehensive income
- Total issued less treasury shares (2) 247 110 251 946 251 946
- Weighted - 251 015 251 946 251 946
- Diluted - 251 015 251 946 251 946
- Diluted measure for core earnings purposes - 251 015 251 946 251 946
Earnings per share measures (cents)
Headline and diluted headline earnings per
share (cents) 21 20,0 16,5 29,6
Continuing operations 41 20,0 14,2 24,0
Discontinued operations - 2,3 5,6
Core and diluted core headline earnings per
share (cents) 11 23,3 20,9 36,9
Continuing operations 27 23,3 18,3 30,6
Discontinued operations - 2,6 6,3
Reconciliation of headline earnings and
core headline earnings
Profit attributable to owners of the parent 142 98 348 40 648 72 968
(Profit)/loss on disposal of property, plant and
equipment less taxation and non-controlling
interests (11 579) 858 1 649
Profit on disposal of discontinued operation (36 526) - -
Headline earnings 21 50 243 41 506 74 617
Share based payments 5 278 7 589 10 555
Amortisation of intangible assets acquired as part
of a business combination less taxation and
non-controlling interests 3 015 3 512 7 826
Core headline earnings 11 58 536 52 607 92 998
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
(Profit)/loss on disposal of property, plant
and equipment (16 040) 4 497 (36) (11 579)
Share-based payments 5 278 - - 5 278
Amortisation of intangible assets acquired
as part of a business combination 4 741 (1 327) (399) 3 015
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
at at at
30 November 30 November 31 May
2017 2016 2017
% R'000 R'000 R'000
ASSETS
Non-current assets (16) 1 182 439 1 406 183 1 182 371
Property, plant and equipment 1 022 362 1 197 847 1 018 770
Intangible assets 151 369 158 422 155 868
Investment in associate - 42 498 -
Loans and receivables 7 834 6 068 6 425
Deferred tax 874 1 348 1 308
Current assets 41 615 420 437 111 412 201
Inventories 25 515 23 515 22 914
Trade and other receivables 374 315 293 672 292 016
Taxation 1 896 2 186 2 255
Cash resources 213 694 117 738 95 016
Non-current assets held-for-sale - - 256 380
Total assets (2) 1 797 859 1 843 294 1 850 952
EQUITY AND LIABILITIES
Equity 12 911 960 811 166 845 070
Ordinary shareholders' funds 873 318 770 366 799 775
Non-controlling interests 38 642 40 800 45 295
Liabilities
Non-current liabilities (32) 409 716 598 273 438 519
Interest-bearing borrowings 271 685 476 910 309 997
Deferred tax 138 031 121 363 128 522
Current liabilities 10 476 183 433 855 410 947
Trade and other payables 313 142 260 901 256 797
Interest-bearing borrowings 162 419 169 794 150 878
Taxation 622 3 160 3 272
Non-current liabilities held-for-sale - - 156 416
Total equity and liabilities (2) 1 797 859 1 843 294 1 850 952
Notes to statement of financial position
Net asset value per share (cents) 16 353,4 305,8 323,7
Net tangible asset value per share (cents) 20 292,2 242,9 260,6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2017 2016 2017
% R'000 R'000 R'000
Net cash generated from operating activities (32) 82 205 121 709 205 099
Cash generated from operations before changes
in working capital 8 167 892 154 836 294 149
Changes in working capital (28 531) 11 557 9 714
Net finance costs (25 012) (29 127) (57 625)
Taxation paid (11 146) (13 200) (18 626)
Dividends paid to shareholders (20 998) (2 357) (22 513)
Net cash flows from investing activities >100 162 989 (14 238) (36 068)
Purchase of property, plant and equipment (19 772) (26 937) (69 547)
Purchase of intangible assets (2 016) (1 286) (5 303)
Proceeds on disposal of property, plant
and equipment 10 159 12 935 20 266
Movement in non-current receivables (1 409) 1 050 693
Proceeds from disposal of Umlaas Road properties
(non-current asset held for sale) 106 322 - -
Cash flows from associate (non-current asset held
for sale) 69 705 - 17 823
Net cash flows from financing activities 40 (126 504) (90 184) (174 752)
Increase in borrowings 7 505 14 719 20 677
Repayment of borrowings (111 623) (104 903) (195 429)
Acquisition of non-controlling interests (7 702) - -
Share buy back (14 684) - -
Net movement in cash resources 118 690 17 287 (5 721)
Cash resources at beginning of the period 95 016 100 012 100 012
Exchange gain on cash resources (12) 439 725
Cash resources at end of the period 81 213 694 117 738 95 016
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Stated
capital net Non-
of treasury Retained controlling
shares income Reserves interests Total
R'000 R'000 R'000 R'000 R'000
At 1 June 2016 - audited 251 995 456 465 13 615 36 509 758 584
Dividends paid to shareholders - (20 156) - (2 357) (22 513)
Non-controlling interest acquired
as a result of a business combination - - (335) 335 -
Share-based payment reserve
movement - - 10 555 - 10 555
Profit for the period - 72 968 - 10 808 83 776
Other comprehensive income - - 14 668 - 14 668
At 31 May 2017 - audited 251 995 509 277 38 503 45 295 845 070
Dividends paid to shareholders - (12 597) - (8 401) (20 998)
Share-based payment reserve
movement - - 5 278 - 5 278
Transactions with non-controlling
interests - - (2 793) (4 910) (7 703)
Shares repurchased (14 684) - - - (14 684)
Profit for the period - 98 348 - 6 658 105 006
Other comprehensive income - - (9) - (9)
At 30 November 2017 - unaudited 237 311 595 028 40 979 38 642 911 960
SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 November 30 November 31 May
2017 2016 2017
% R'000 R'000 R'000
Revenue
Abnormal logistics 20 544 655 452 768 933 245
Primary product logistics 13 521 448 461 992 907 394
Reportable segments 17 1 066 103 914 760 1 840 639
Other (11) 80 949 91 269 155 249
14 1 147 052 1 006 029 1 995 888
Segment results
Abnormal logistics 29 68 896 53 337 100 963
Primary product logistics (4) 59 483 61 662 100 739
Reportable segments 12 128 379 114 999 201 702
Other 7 6 301 5 905 12 882
Corporate items 33 (33 153) (24 973) (48 866)
Trading profit (excluding restructuring costs) 6 101 527 95 931 165 718
Restructuring costs at VDS - (4 444) (4 444)
Trading profit 11 101 527 91 487 161 274
Unallocated:
Share-based payments - employees (30) (5 278) (7 589) (10 555)
(Profit)/loss on disposal of property, plant
and equipment >100 16 040 (1 233) (2 573)
Operating profit 112 289 82 665 148 146
Total assets
Abnormal logistics (20) 668 446 834 164 645 763
Primary product logistics 10 916 636 835 343 827 158
Reportable segments (5) 1 585 082 1 669 507 1 472 921
Non-current assets held-for-sale - - 256 380
Other 8 81 328 75 634 66 291
Corporate items 147 128 679 52 121 51 797
Investment in associate (100) - 42 498 -
Taxation and deferred taxation (22) 2 770 3 534 3 563
(2) 1 797 859 1 843 294 1 850 952
Total liabilities
Abnormal logistics (40) 264 677 443 593 258 159
Primary product logistics 3 411 775 398 160 391 389
Reportable segments (20) 676 452 841 753 649 548
Non-current liabilities held-for-sale - - 156 416
Other 2 46 997 46 032 48 136
Corporate items 20 23 797 19 820 19 988
Taxation and deferred taxation 11 138 653 124 523 131 794
(14) 885 899 1 032 128 1 005 882
The group has authorised capital expenditure
over the next six months of R41,5 million.
Commitments
Operating lease commitments (not exceeding
ten years) 379 831 133 580 163 165
Directors
SM Pityana (Chairman)*#
NJ Bester
GM Glass (FD)
AJ Grant*#
IK Lourens (CEO)
B Mathews*#
CV McCulloch (COO)
K Schoeman* (alternate: L Mosiane)
LJ Sennelo*#
* Non-executive
# Independent
Registered office
46 Tulbagh Road
Pomona
Kempton Park
PostNet Suite 10
Private Bag X27
Kempton Park
1620
Company secretary
CIS Company Secretaries (Pty) Limited
Rosebank Towers
15 Biermann Avenue
Rosebank
2191
PO Box 61673
Marshalltown
2107
Transfer secretaries
Computershare Investor Services (Pty) Limited
Rosebank Towers
15 Biermann Avenue
Rosebank
2191
PO Box 61051
Marshalltown
2107
Sponsor
Java Capital
www.onelogix.com
Date: 08/02/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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